Epic Games, the company behind the massively popular Fortnite, is turning to the courts in California to stop Apple from barring the video game developer from iOS and Mac development tools, according to Epic’s tweet on August 18. If Apple has its way, future versions of Unreal Engine, a game engine that was developed by Epic and is an industry standard, will not be developed for any Apple devices, potentially causing massive disruption in the global video game industry.
Epic is suing Apple and Google in two separate antitrust lawsuits, after the shooter-survival game Fortnite, which has more than 350 million registered players around the world, was wiped from Apple and Google’s respective app stores last Thursday. The two app store operators claimed that Epic’s new payment system for in-game purchases violated their rules by bypassing the 30% cut charged from developers for transactions within apps.
Apple then said it will terminate Epic’s developer accounts and sever the game developer’s access to Apple’s development tools by August 28. “Apple’s actions will irreparably damage Epic’s reputation among Fortnite users and be catastrophic for the future of the separate Unreal Engine business,” the gaming company said in a court filing on Monday, adding that Apple has never claimed the software violated its own policy.
Removing Unreal Engine from the package would put the current and future projects of China’s game development studios in jeopardy. For example, Tencent’s own PUBG Mobile and Zloong’s Dragon Raja, which was published by Tencent, are both powered by Unreal Engine 4.0. Chinese entertainment and social giant Tencent owns a share of 40% of Epic.
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PUBG Mobile’s lifetime revenue (including revenue from its Chinese version, Game For Peace) hit USD 3 billion in just seven months, app industry research firm Sensor Tower showed. In particular, Chinese iPhone users spent USD 1.6 billion on the game, accounting for 52% of the total turnover. Notably, nearly 80% of all player spending for PUBG Mobile (and Game For Peace) was channeled through Apple’s App Store.
Curbing Epic’s access to provide patches and updates to Unreal Engine’s users that create video games, TV shows, and films on Apple devices creates new hurdles for studios with media projects that are in the pipeline. For example, The Mandalorian, a web TV series set in the Star Wars universe, was made using Unreal Engine.
“The cost of shifting to another game engine is enormous,” said a game developer working for ByteDance, who declined to be named for this report. “It could mean that the entire project needs infrastructure reconstruction. Industry-wide, small studios that rely heavily on Unreal Engine could be screwed,” he said.
Game developers in China and around the world are now caught between the legal altercation involving Epic, Apple, and Google. “At stake is the battle between platforms and content providers. In the end, it depends on whether the platform is more important or the content is more important—which is more unique,” said Huang Yimeng, CEO of Chinese gaming company Xindong Network.
Huang takes a different view from Epic regarding the fees charged by app store providers. “I don’t really mind the 30% cut charged by Apple and Google. The premise is that you need to allow a free marketplace to exist, with App Store, Google Play, as well as Epic Store and TapTap [a game review site owned by Xindong], instead of monopolizing based on the advantage of the hardware and operating systems,” the CEO said.
Epic’s lawsuits and Apple’s response come down to one thing—cold cash—and plenty of it. Per Sensor Tower stats, in the first six months of 2020, global revenue from mobile games crossed USD 35 billion. The App Store racked up USD 42 billion in 12 months ended June 30.
