Epic taunts the end of the App Stores
Unless a huge turnaround comes as a surprise
Imagine a world where you turn on your PlayStation 5 and open the xCloud app to play Halo Infinite. Then receiving a call in your Samsung Galaxy and handing-off the call to your iPad with the Samsung Flow app.
This currently is not possible. You would never see an Xbox app in PlayStation, nor a Samsung app in the App Store, but Epic Games may open up the way for this open ecosystem if everything goes according to plan.
Epic Games played their cards well yesterday. Being big and owners of a big product — Fortnite in case it’s your first time on the Internet — they had the necessary leverage to actually fight one of the “given” things in today’s world: App Stores. Namely, Apple’s App Store and Google Play Store.
Basically: the only way to have an App in the iOS ecosystem (iPhone, iPad) is by using the App Store, which cut fees for every app transaction (sales and subscriptions). Fortnite circumvented this and was spelled from the App Store stating a violation of their App Store guidelines, and the owner Epic Games is going to take them into Court because these guidelines are not fairly applied to everyone, like Amazon. Google allows third-party stores and apps from outside, but with a big “warning”, but on Google Play the payment exclusivity apply.
The excuse for Apple has always been reliability. They can “review” and “control” the quality of applications in their store, thus the whole ecosystem. They have a point: this allows for tighter security, privacy and quality of the app themselves. And since you are using in-app purchases through their platform, you can check them and talk to Apple if there is a problem on the purchase itself, instead of dealing with the developer directly and hoping they resolve it, if they do.
Everything started with a sparkle on Microsoft over their “xCloud” app, their own cloud gaming service. The app was cut off from the App Store. Apple said it was because they can’t review every game xCloud have access, but if you read between the lines you can see that xCloud subscription can be bought outside the App Store itself, thus violating their exclusivity rules. Google allowed it, however.
Next days, Epic Games decided to go one step further. They added their own payment gateway for buying V-bucks within Fortnite without having Apple or Google to notice. It even passed the “savings” to the end user, clearly depicting the Apple App Store transaction as the worst option.
Apple didn’t like that bypass of their services, let alone that presentation, so they took it down. Epic knew what would happen beforehand, the only explanation has to why the court papers are already done and on their way to the Court [PDF Warning].
Google followed suit and deleted the app, and of course Epic decided to also sue them [PDF Warning]. The rabbit hole goes deep, though, as the plaintiff shows that Google prevented and Epic Games deal with LG and OnePlus. The Antitrust committee is gonna have a field day with this data.
What better way to announce their offensive with mocking their old “1984” ad, an homage to George Orwell’s totalitarian dystopian novel of the same name. The original targeted the dominance that IBM had that period on the computing hardware. The new version depicts the same root problem: monopoly.
Again, let me remark this is the perfect timing to go with a bold strategy an stating that they’re not the bad guys. They had this under the rugs and both stores danced at Epic tune. This comes right out the bat the big tech hearing committee the past week which put some light in the shadows on how big corporations handle data and competition themselves. Among these, Apple and Google. And this friday is gonna push the news to the weekend, talking about great timing.
Not only that, Epic is basically gathering people against Apple using social media. In other words, let the enraged mass be their marketing department.
What better thing to do that inspire fear: if Apple doesn’t change right now, Fortnite players will simply miss the next season in their iPhone and iPads, making their season passes unusable.
A parallel with the MacBook ARM
I’m very convinced that Apple is including their Mac App Store as the only way to install software in their new “Apple Silicon” Macs. Since the transition from x86 to ARM is a bumpy ride, it would have made perfect sense to not only market a device with superior hardware but also closed ecosystem.
Imagine everyone paying an Adobe subscription (🤮) and Apple getting a 30% cut only for allowing their software to run. Imagine having every publisher and developer livelihood by the balls.
I think that they will try to rush scheme this before any decision or regulation it may come before they launch later this year, with promises of security, privacy and quality over consumer choice, before the bubble explodes.
Let’s say this is a full Court Case
What will come from this? It depends if the there are legal grounds and the legal procedure outcome.
I’m not a lawyer. This is not legal advice. Please LegalEagle help me.
If there are legal grounds, and Epic Games has a case against Apple, it will be the Court job to say who is in right here, and by how much. If Epic Games is right, the Court may force Apple to some quick easy solutions depending on if there is unfair advantage, or full antitrust regulations:
- Apply the same rules to everyone else: No more segregation, but still a closed ecosystem.
- State clearly rules exceptions under stipulated conditions: the Amazon Prime Video deal would be available for everyone, but won’t solve the root problem.
- Make payment optional for all applications: That would make all apps free, with uncontrollable outside-app purchases, killing the wallet garden.
- Open all iOS devices to allow third-party software or stores: No more App Store wallet-garden.
Note that the important and game-breaking rules are the last two. The repercussions could be huge for devices tied to close ecosystems, but in the end, the user would win nonetheless: more choice on how to use their rightfully owned device, and developers would get money directly instead of being artificially taxed.
If Apple is forced to open their ecosystem, the problem will be how to leverage third-party software in a non-anticompetitive-way. It’s known that the App Store offers deployability and discoverability. I wouldn’t be surprised if the App Store put a big warning saying that they’re not supplying a given app, and remove any service that the developer would need to put their app live.
Imagine Apple letting third-party apps to deal with delivery (downloads from a CDN), automatic updates, and even payment gateways manually, with no Apple support whatsoever. This surely would make users think two times before getting an app outside the App Store, but again, users would have the choice to trade “reliability” over “price”: What if the app doesn’t work? What if the subscription doesn’t offer all features? What if the publisher refuses a refund?
Going 180º, if the Court could rule against Epic, then that would open all software or device vendors to lock the device to a given software ecosystem, put their own rules, have total control on how and when to apply them.
This could become the worst scenario for consumers. It’s pretty much like driving a Camry ten miles and note that it’s only compatible with Toyota tires, Toyota gas, and ultimately, Toyota roads.
This has certainly exploded out of proportions. We know Tim Sweeney sometimes goes full anti-consumer, especially now that it has his Epic Games Store running around Fortnite (or the other way around), but this may be one of the few that consumers may be the ones winning after all.
What makes this saucy that all these companies are being watched by the US House of Representatives’ Antitrust subcommittee, which may push for some heavy regulations on the software market to avoid another United States vs Microsoft. Considering they would have learned from the past mistakes, I fully expect something that will make App Stores live but become a more quality-oriented marketplace than just artificial global taxing schemes behind a software store.
Take for example Valve’s Steam store. It’s known that it takes a 30% cut like everyone else, but it doesn’t enforces platform exclusivity, and it doesn’t bat an eye if you subscribe to something using Steam or outside — losing the right to appeal a charge with Valve itself. It has become the biggest video game store because it has a ton of features like delivering, chat, gifting, discoverability, matchmaking, reviews, forums and what not, out of the box. A developer can publish there and have everything sorted out of the box, forever, and users will know they’ll find their game there. Even Origin had to come back.
One of the collateral from this could be the Nintendo eShop, PlayStation Store and Xbox Store; the same ruling could apply for these console stores who are exclusive to their platform, and offer not only exclusive games but apps like Spotify, Twitch and Netflix. What if Epic Games decides one day to sue Nintendo, Sony and Xbox because of this same scenario? What if these platforms open up to third-party software?
All of this would have been eluded if Apple just had applied the same rules to everyone else, but they didn’t. Now everyone is watching Apple, and they may pay the price and bring everyone with their own digital store down alongside them.
