The Epic Epic Vs Apple Battle

or or maybe an epic epic showdown. What I mean to say is that the company Epic or Epic Games, known for video games in general and the juggernaut game Fortnite in particular, is facing off against the sometimes trillion dollar monolithic company Apple, and things are getting spicy. But why are these two companies feuding and how are things escal leading? As I research and write this, the fight is just gearing up, but it promises to get much

nastier over time. Today we're going to learn about the conflict between these companies as well as get a deeper understanding of the way that apps, services and Apple make money, because really, that's what this all boils down to the method that companies follow to make money and how they can make more money and keep more of the money they make. So you know, spoiler alert. That's really what this is all about when you get down to it.

But first some background. Now, I've done an episode about Fortnite that published back in February of two thousand nineteen, so I'm not gonna go over the entire history of Fortnite, but let's do a quick rundown of Epic Games so we understand where they're coming from. Way back in, a guy named Tim Sweeney was programming video games and saving them onto floppy disks and then sending those disks out over the mail, and he was using the company name

Potomac Computer Systems. He hired on a couple of important people as well, Mark Rhyan and Cliff Blazynski. In Sweeney would rename this company and it became Epic Mega Games, and the founders started creating lots of games that got a pretty good reception. A few years later, as computers got more powerful and graphics cards began to be a thing, Epic evolved into Epic Games and the company released a

computer engine, a game engine called the Unreal Engine. So computer engines or video game engines are sort of a block of code that provide tools to game developers, like physics engines and graphics engines, and a game engine saves game developers a lot of time and a lot of effort. It provides some basic functionality that the game developers can then build upon. It's like the framework, and it keeps developers from having to re invent the wheel every time

they want to build a game. The Unreal Engine would become a really popular game engine, and that will play an important part in our story. Around two thousand and six, Epic Games began to saunter casually over to the world of console video games, developing titles or adapting existing PC games for the Xbox three sixty. The company was branching out beyond PC and Mac titles. Some of their earliest games that you know Epic produced were available on the

Mac computer. That will also play an important part of our story. The company announced Fortnite in two thousand eleven. It would take a few years before it actually would debut, and in a Chinese company called Tencent Holdings ended up buying a forty steak in Epic Games for a three hundred thirty million dollars, a princely sum. This, by the way, makes Epic another potential target in the ongoing political and trade battle between the United States and China for much

the same reason that TikTok is under scrutiny. But that's a different topic that will probably not come back into this episode. I think I don't know. I'm just at the beginning of writing this. I'm reading my old notes, okay, so I can say definitively no, that's not going to come back in. In two thousand and fourteen, Epic announced that when Fortnite would launch, it was going to be a free to play game. Now, this is also a big part of our story, so a free to play

game is a little bit deceptive. It is free to download and install and play one of these games, but it typically has in game transactions, and these are transactions where players can spend real world money and enhance their game play in some way. Games do this in different ways. Some games allow players to purchase upgrade that give them

an advantage in the game. The derogatory name for this style of game is called pay to win, the implication being that a mediocre player can dominate people who have spent more time and developed more skill in the game just by dishing out more cash for upgrades. And a

lot of gamers view this as being inherently unfair. Other games only allow for cosmetic transactions, so it's stuff that changes the appearance of different elements in the game, like a player's outfit or their weapons, skins or whatever, and some games incorporate are element of randomness in the transactions with loot boxes. With these games, you don't buy specific

upgrades or cosmetic changes. Instead, you buy a crate or a loot box which you then open within the game, and only then do you find out what you've got from inside the crate or box. It's a classic mystery bag idea of you ever went into a store where the country stores used to do this all the time where I was growing up, where you would have bags

that would just be a a mystery bag. There'd be a toy inside, but there'll be no way of knowing what toy was in there until you bought the bag and then you could open it, so you have no clue what's inside, and you have to take a gamble if you purchase it, maybe it will be something cool or maybe it'll be something lame. And on a side note, there's a definite art to designing these style of loot boxes. You want there to be just enough payout to keep

players engaged and buying the crates. So you need to keep those payouts just rare enough so that it feels like an accomplishment to get, you know, a rare skin or something like that, but not so rare that people feel they're getting nothing but garbage every time they buy a lootbox. So this is not easy to do, and it's also something that can encourage unhealthy behaviors akin to addiction.

And it's said the core of why games that have these sorts of transactions off come under scrutiny by various advocacy groups and governments around the world. Now that's another kettle of fish, but the micro transactions get to the very heart of the matter we're looking at in this episode. In two thousand nineteen, Epic Games made another big move. They launched the Epic Games Store. Now, over its relatively short history, the PC games industry has seen some pretty

massive changes in how companies sell and distribute games. So in the old old days, you had game programmers like Sweeney who would build a game and then make copies of it on discs you floppy discs, and then sell them either by mail order or sometimes going through like a local computer hobby store, and that evolved into game developers and publishers selling games through brick and mortar retail shops like game stop or best Buy or Walmart or whatever.

But over the last decade the model has shifted dramatically over towards digital distribution. The vast majority of games are now sold through digital downloads, more than eighty percent since two thousand eighteen. This changes the model a lot, and it's one of the reasons why companies like GameStop are really in trouble these days. But you still need a place to sell your games. You need a shopping portal

or something. Now you could try and do this through your own company's web page, but the problem with that is that you're asking gamers to go to a lot of different websites when they're in the mood to buy a game. Most gamers like to play a variety of titles from a variety of companies. There are very few gamers who are like, I'm only going to buy games from this one company, and smaller independent developers have a hard time standing out with so many big companies that

are in the industry. So having a centralized digital store where you can look at titles from big or small companies. That ended up being a really great idea, and that was an idea of that a company called Valve, famous for video game series like Half Life in Portal had the Valve Digital Store gave PC gamers a centralized location where they could shop for games, and Valve would end up making truckloads of cash off of this because the company would take a cut out of every transaction made

through the Valve Steam Store. If you bought a title on Steam, whether it came from Valve or not, Valve would get some of that cash, and for a while, it was effectively the only game in town, so to speak, unless you were to go directly to each publisher. In two thousand nineteen, that changed. Epic announced the Epic Game Store and also announced that it was going to take a smaller cut than what Valve was taking in their

Steam Store. That would mean that video game companies would get to keep more of the money from those sales, and it would also mean that if a company were to hold a sale, like if they were to discount on a title, they wouldn't take as big a hit on revenue as a result, and it introduced competition in the digital marketplace. Some of epics moves upset gamers, particularly when they heard about specific titles that would be exclusively

sold through the Epics store. Gamers are not crazy about the idea of having to manage to store accounts, I guess, but you could make a strong argument that competition would ultimately be a good thing, even if it meant you had to go to two stops when you were shopping for games instead of just one, And that really sets the stage for the show down with Apple. Epic Games

has done something really smart with Fortnite. Actually, they've done a lot of smart things, including lifting the battle Royal concept that was working so well for video games like Player Unknowns Battlegrounds and then applying it to Fortnite. That transformed that game and made it into the juggernaut it is. But Epic has followed what I think of as the

Netflix strategy. One of the things that Netflix really got right early on when it started making movies available to stream online is that the company worked hard to make sure that this service would be available across a ton of different platforms. Netflix wanted to make sure that users would be able to access the service no matter how they watch video. So that meant that Netflix had its web based interface, and then it also had an interface for smart TVs and one for smartphones and one for

video game consoles. Essentially, the idea was, if this thing can play video, Netflix wants an interface to go on it. And the strategy paid off big time. It meant Netflix could cast a truly wide, you know, net to capture as much audience as possible. Epic has done something similar with Fortnite. Game developers often have to weigh some pretty

tough decisions when it comes to making games. One strategy is to build games for a specific thick platform and just to focus on that exclusively, and that gives you the ability to really refine the game for that specific platform and and and make sure that everything is working well and you end up with the most polished, well

designed game you can create. So if you want the game to be available on more than one platform, such as let's say that you want the game to be playable on PC as well as on a PlayStation console, well, then you have to devote time to adapting the game to work on the other platform. Because games are not just something you can copy and paste over on to one thing from together. You can't just pull the code from a PC game and PLoP it into the PlayStation store.

It doesn't work that way. So you really have two choices, one of which doesn't make much sense. That choice is to essentially recreate the game entirely for the new platform. This would mean building the same game two times, at least only the second time you're doing it for a different system. That's not really efficient. That's not a great way to go about it. It's certainly not a cost

effective way to go about it. So the other way is to port the game over, which means you're really trying to keep as much of the basic code you built for the original game whatever platform moves on, like for PC, and only focus on making changes where it's necessary in order to run on a different platform like the PlayStation or whatever other platform you're developing for. Either way, it's a process that takes more time and resources to complete.

Some companies will farm this sort of work out to other game developers, and this gives the original company the freedom to do other stuff like developed downloadable content or otherwise known as DLC for that original title, or to work on a brand new game with Fortnite, Epic developed

versions for pretty much every conceivable platform. There are versions of Fortnite that you can play on PC, on MAC, on the Xbox One, the PlayStation four, the Nintendo Switch, on Android phones and iOS devices like iPhone and iPads. So epics approach is, again, if this thing can play games, we want to be there. Now. I say that knowing there are other gaming platforms out there, like you know, handhelds and stuff like that, So don't yell at me,

you know what I mean. What's more, as an added value to the game, Epic has included the ability to have a lot of cross platform play. Now, this means that people playing the game on totally different systems can potentially play together in the same game or match. This, by the way, helps illustrate the fact that all these systems are ultimately computers when you really get down to it, and that would mean that you could play on PC, your friend could be on a PlayStation, and the two

of you could actually play in the same game. Now, typically that doesn't really happened that much. At first, this cross platform ability wasn't quite universal. You would run into weird situations where player a could play with player B, but they couldn't play with players C, and player B could play with either A or C, but they could not play with both at the same time. However, over time,

Epic would roll out more cross platform support. In two thousand nineteen, they tweaked this a bit so that players who were on Nintendo Switch would by default get grouped into games with mobile players, you know, people on Android phones or iOS devices, whereas Xbox and PS four players were by default grouped together. The company still allowed people to create parties to form across these technological divides if

they really wanted to. It's just the differences and system power and controls really make a big impact on gameplay. It could be very difficult for someone on mobile to compete head to head against someone on PC, for example. But anyway, that's epics set up. When we come back, we'll do a brief rundown on Apple and then we'll talk about why these companies are waging war. But first

let's take a quick break. So Apple. I've done a series of episodes about Apple, and it was one of the early personal computer companies to emerge out of the hobbyist scene of the nineteen seventies. The original Apple computer, the Apple one, was really a hobbyist computer. It wasn't until the introduction of the Apple two line that you started seeing machines that could appeal to people who were you know, they were geeks, but they weren't, you know,

like hardcore computer hobbyists geeks. Then you had the introduction of the Macintosh computer in four. That's going to have an interesting callback later in this episode. Then co founder Steve Joe either quit or was fired from the company. He was definitely pushed aside, and so even if he quit, that was because he had essentially been neutralized by company management at that time. Now, after the ousting of Steve Jobs, Apple executives would make a series of really bad decisions

that ultimately put the computer in jeopardy. Now I'm not going to go into detail because they aren't really relevant for this episode, except to say I'm sure that the brushes with bankruptcy shaped the company as a result and

created a sort of steely resolve to reverse course. So Steve Jobs, who had left the company in nineteen five, would end up being called back to Apple a little more than a decade later in to act as something of a like a counselor or advisor, and before long he was able to regain control or if you prefer, rest, control of the company, first as an interim CEO and

then ultimately as the permanent CEO. Apple was in bad shape, and Jobs was determined to fix it and then make sure the company would never be in such a precarious position again. I think it's fair to say he had a bit of a ruthless edge to him. He was also a remarkable salesman and always had been. While the course corrections helped improve Apple standing, what really turned things around for the company was the introduction of a little

device that could play music files. This was called the iPod, and Jobs unveiled it on October twenty three. One. Two years later, Apple would launch the iTunes store, and that would really be a transformative moment for the company. Now, the iPod helped Apple get a new foothold in the consumer market. The company would strengthen that over time with the introduction of the iPhone and, to a lesser extent,

the iPad and the I Watch. But the iPod and iPhone were slam dunks or touchdowns or Grand Slam home runs or whatever. Impressive sports analogy you would like to use, That's what they were. They weren't just popular, they became iconic. Heck, the iPod didn't invent the MP three player, but it certainly defined the MP three player. We usually call shows like mine like tech stuff podcasts for a reason, and that reason is the Apple iPod. But I want to

tell you, guys an important fact. The iPod helped turn Apple around. The iPhone secured Apple's place as the company that makes status symbols that are esthetically appealing technology. Though I should also admit that the company was on that path already with the redesign of Mac computers and the evolution of the iPod. But one thing that would truly set Apple apart was the introduction of the iTunes store

back in two thousand three. So the company had first made and iTunes program in two thousand one, but at that time, iTunes was really just about letting users rip music from their c d s and then load the files onto their iPods. In two thousand three, the company began to act as a sort of music retailer, offering up downloads of individual songs, and this was the start of a massive change in how the music industry had been working and it would presage you like that word.

The change in the video game industry by you know, like a decade so since the introduction of the long playing album or LP record, companies have been marketing full albums as sort of the preferred product. Now, you could go and buy a single, typically with a B side song attached to it, but that was less common and for those of you who have never dealt with music on a physical medium, an album is a collection of songs by a band or artist, and a single is

a particular song off an album. Usually it's one that the artist and the music label feels has a particularly catchy vibe to it. The goal of picking a single is to pick out the standout hit or hits from an album. In other words, but now Apple was allowing people to purchase not just albums, but individual songs. Sometimes your favorite song off an album might not be a single, which means you normally wouldn't be able to buy just

that song. You would have to buy the whole album, And if it's the only one you like off that album, you might deliberate about whether or not it's worth it to purchase the whole thing or not. Why would you spend your money if you really just want one song? Not. At the time Apple was introducing the iTunes Store, music piracy was running wild. People were using all sorts of different services to share music and download specific songs. For

the music industry. Apple was helping solve a problem by guaranteeing quality and safety, two things that were not a guar team if you were, you know, using piracy, Apple could convince people to buy music rather than just share it illegally. If a song costs less than a dollar and you knew it was going to be really good audio quality, plus it wasn't going to infect your computer with a virus, you might just go and purchase it.

In fact, a lot of research shows that piracy doesn't always come about because people just don't want to pay for stuff. It usually grows because people don't have options when it comes to buying the stuff they like. So if you provide options, you remove some of the motivation for piracy. Now, this gave the iTunes store a nice healthy amount of support early on, and in return, because iTunes was acting as a sort of retail store for this music, Apple would take a cut of the transaction.

The music label would get most of the money, but Apple would pocket fair percentage as well, And for music labels, this wasn't that big of a roadblock. Producing music on physical media is expensive. You're dealing with actual materials like c D s or cassettes or vinyl or whatever it is. You want to produce enough of that to meet consumer demand. But you also don't want to go overboard and make more copies than you can sell, because that's just a waste of money in space. You also have to store

that stuff, and you have to ship it. In other words, there's a cost associated with actually producing and selling music on physical media. Going digital helped reduce or even remove a lot of those costs, lowering the overhead, and so even with Apple taking a cut, this looked like a pretty good deal. That deal would set a precedent, one that Apple would extend when it debuted the App Store for the iPhone in the summer of two thousand eight. The iPhone had come out the year before, and its

launch had been an enormous hit. The media went bonkers over the production of the attractive, sleek, exciting smartphone called the iPhone. Now Apple was introducing the world to a marketplace where you could download apps to enhance your phone experience. You might download games or productivity apps, or lifestyle apps or whatever. I mean. You you know what apps are. Some of those apps were free, some of them cost money. Some included ways to make a purchase within the app itself.

So for most apps that involved any sort of transaction, whether that was the purchase of the app itself or a transaction that happened within the app, Apple would take a cut because it was the facilitator. It was the retail space, the marketer, the support system, it was how people could get access to that software in the first place. So it took a thirty percent across the board cut

for certain transactions. Now, if an app is subscribe option based, Apple would reduce that to upon the second year of a subscription, but that covers a much smaller percentage of apps. Also, I should point out that for some transactions, Apple does not take a cut. For example, a ride hailing app like Lift or Uber doesn't have to share thirty of affair with Apple. Nor does a food delivery service have to give Apple a cut for every order made through

the iPhone app on that food delivery service. But in many cases for every dollar spent within an iPhone app, Apple gets thirty cents and the other seventy cents go to the app developer or you know, whatever entity owns the rights to that app. Apple services make up a pretty sizeable chunk of Apple's revenue. Now, it's not the biggest chunk. iPhone sales are still the king there. They can make up to around of all revenue for the company.

That's impressive. However, revenue and profit are two different things. Revenue is how much money you bring in by selling stuff. Profit is how much money you have left over once you deduct the costs of producing and selling things, essentially the costs of business from the money that you brought in. So yeah, iPhone sales make up the lions share of revenue, but it still costs money to produce each iPhone, though not that much money compared to how much Apple sales

them for. But that's another matter. Now. While I haven't seen the figures and I can't make any definitive statements, I feel fairly confident that the profit margin on Apple's App store is much better than it's iPhone sales. The more apps that join within app transactions, the more money Apple collects as a result. Oh and there's one other important element to this. Apple only allows users to get

iPhone apps through the Apple Store. That means, if you want to run an app on your iPhone and you don't want to go through the trouble figuring out how to hack your phone so you can sideload apps, you have to go through the official App store. There is no other game in town. So any company that wants to make apps for iPhones, and there are a lot of companies that do, they have to play ball with Apple.

Most companies just deal with this, partly because iPhone users tend to spend more money on apps than other smartphone users do. Numerous analysts have estimated that when it comes to consumers spending money on or within an app, more than six of the dollars spent on apps are going to io s app transactions, in other words, Apple transactions. Now that's particularly amazing because while the iPhone is popular, Android phones out number them in the world by a

huge amount. Way more people have an Android phone than an iPhone, but it we're seeing more people spend money through the iOS ecosystem than through the Android ecosystem. So while we've got way more Android apps out there in the wild. We don't have a lot of people spending

money on apps through Android, not compared to Apple. So this means if you're a developer and if you want to make money off of the app you're developing, chances are you're going to want to make something specifically for Apple. It just makes business sense anyway. Developers have to submit apps to Apple for approval before it will be featured in the store. And note from Jonathan in the past, that was a lot of app noises all at once. I hope future Jonathan can say them without stumbling. I

like it when I leave notes to myself. Developers also agree to keep in app transactions within the Apple ecosystem as well, meaning you can't sneakly do an out of app deal or a direct payment option and change things within the app that is running on iOS. You can't do that. You're not allowed to. You have to do it through Apple. So we've got Fortnite, a game that makes its money primarily through in game purchases, and we've got Apple, a game that generates revenue largely by taking

a cut from in app purchases. I bet you can see where I'm going here. Epic Games decided to pick a fight with Apple, and this fight also extended to Google, but we'll cover that as well. And this is not an opinion. This is based on the timing of events that the company had clearly anticipated what was going to unfold, and I think Epic is counting on other companies to join in the fight at some point to protest Apples cut.

But here's how it played out. On August, Epic announced a change in the price of V bucks V as in victory. That's the in game currency for Fortnite, so you can think it as a virtual currency, so players will purchase v bucks with real cash, then they can spend the v bucks in the game itself on whatever they want. Epic called the change of price a mega drop and announced that in game purchases would now cost

twenty percent less than they had previously. So if you played Fortnite on PC or on a game console, you would see those prices reflected within the game itself. Whenever you went to make a purchase, you would see it at seven dollars nine cents for a thousand V bucks instead of nine dollars and cents. But for mobile it was a different story. Playing the game on either an iOS or Android device would mean that when you went to purchase v bucks, you would be presented with a choice.

One choice was to purchase the virtual currency through the official Approved App Store or Google play Store route, and that would also mean having to pay the older higher price of nine dollars and cents to get that tent marked down. You could make a direct purchase from the Epic Games Store by passing the app Store transaction in the process, so gamers would get that reduced price. But while the gamers might save some money on a transaction,

there was a much bigger price to be paid. More on that in a second, but first let's take another quick break Epic Sidestepping the in app purchase part of having Fortnite run on iOS and on Android was a big no no, because that deal is codified. If you submit an app to iOS or Android, you're doing so with the understanding and the express agreement that you are on board with the conditions of that deal. And one of those conditions is that cut going to Apple or Google.

I'll just keep talking about Apple because that's really what most of the attention is on, but just know that a lot of this applies to Google as well. Apple responded by removing Fortnite from their app store. Google did the same. Apple's official response was that Epic had flagrantly broken the rules that everyone had agreed to play by, and that they didn't even do it by accident, and

Epic definitely did do it on purpose. The company released a statement that said, currently there are no savings if players use Apple and Google payment options, where Apple and Google collect an exorbitant fee on all payments. If Apple and Google lower their fees on payments, Epic will pass

along the savings two players. In the quote, Epic also argued that Apple isn't consistent when it comes to applying that thirty percent fee and pointed out the exceptions like the right hailing companies I mentioned earlier, or food delivery services or Amazon purchases. So Epic was saying, hey, if these apps can use direct payments and not go through the Apple payment process, why can't games? Why are you

holding us to a different standard than these companies. So Apple booted Fortnite from the app store, and then Epic filed a lawsuit against Apple and launched a media campaign to inspire support for its argument among the public and probably among other companies. Now, the fact that it was ready to go with all of this pretty much proves that Epic knew exactly what the consequences were going to be for their actions, and in fact, we're counting on it.

The lawsuit argues that Apple has a monopoly over all iPhone apps because the company doesn't allow users to load apps from any source other than the Apple Store, and because Apple has this cut requirement on some but not all app transactions, Epic argues that Apple is engaging in unfair business practices. As for the marketing side, Epic got pretty darn cheeky with that. They created a parody of an iconic Apple ad. So let's do a quick story

about that. Back when Apple was getting ready to unveil the new Macintosh computer in the early eighties, the company was determined to make a really big splash and cut through the dominant position that was then held by IBM. Apple had done well in the personal computer market with the Apple two series, but IBM absolutely dominated when it

came to office computers. If you wanted a machine for productivity and doing you know, business e type stuff, you wanted an IBM computer plus, IBM had been getting into the personal computer market as well, and Apple wanted to tell the world that the Macintosh was a fundamentally different type of computer, one with a graphic user interface or gooey and features that the button down IBM computers just

didn't support. Apple hired on a marketing campaign, and that campaign got hold of Ridley Scott, the film director who directed the commercial. In the commercial, dozens of people in sort of gray colorless outfits shamble into a room and are seated in a dark theater to watch a big Brother like figure spelled propaganda at them on an enormous screen.

And then an athletic woman runs into the room and she hurls an enormous hammer that flies at the screen and destroys it, just as the Big Brother figure is, you know, ranting about tyrannical ideologies. And the implication was there that Apple was on a mission to offer a real alternative, to prove that the IBM way of doing things wasn't the only way to do it. And it was a really effective commercial, one of the most famous commercials of all time. Epic Games produced a parody of this.

They actually showed it within the game itself, but they also released it to other video platforms, and they used computer generated Fortnite characters to replicate the whole sequence, except this time, the big brother figure wasn't IBM. The big brother figure was Apple, and the woman throwing the hammer would represent plucky Little Fortnite, the video game that could plucky Little global phenomenon, billion dollar game Fortnite. And now the message was that Apple was being the tyrannical one

by demanding this cut. If not for Apple, Epic Games was saying companies would be able to price things at a more affordable level for users because they wouldn't have to build in and at markup to deal with Apple's cut. Big bad Apple's cut meant companies had to charge more

for stuff in order to make money. Now, I admit I'm being a little snarky, you know, I'm definitely editorial lie sing a little here, But mostly I want to state that from my perspective, nobody is looking particularly rosy in this situation, and it's about to get a lot worse. I think the industry's general approach to charging off the top is flirting with collusion, because it's not that just

Apple that's doing it. Lots of companies are doing this sort of thing, not that companies have necessarily all tacit. Lee agreed that this is the way to do it, but effectively it means there's no real competition here. Plus with Apple, you could argue that from a pure ecosystem, there's no way to compete at all. You have to go through the Apple Store to have your game work

on iOS, so there is no other option. If you take a step back, you can say, yeah, but you could just develop games for other platforms and leave iPhone alone. And that is true, So I guess it really just depends on your point of view. Thank you, Obi Wan Kenobi. But things escalated beyond Apple pulling Fortnite from the app store.

The company subsequently said that unless Epic Games reverse the move to offer direct payments, Apple would remove all support for Epic tools in the App Store for developers, not just for iOS. That would mean that Epic would no longer be able to update anything that was running on iOS or the Mac operating system, and that includes the Unreal game engine. Now this is where things get really nasty.

I'll quote the statement from Apple which says Epic wouldn't be able to perform any quote engineering efforts to improve hardware and software performance of Unreal Engine on Mac and iOS hardware, optimize Unreal Engine on the Mac for creative workflows, virtual sets and their c I slash build systems, and adoption and support of R kit features and future VR

features into Unreal Engine by their XR teams end quote. Now, as I mentioned earlier, hundreds of games rely on the Unreal game Engine, not just those from Epic, but from

other companies as well. So if a company developed a game that relied upon the Unreal Engine and they wanted to market it on iOS or on the Mac operating system, that game would no longer receive any engine updates because Apple would have cut off that capability, and that would cause an enormous disruption among game companies and could force developers who are working on new games to choose a totally different game engine when they're building out their games

in the future, because it would mean that a large market for their game would be cut off automatically if they used the Unreal Engine. That would be an enormous blow to Epic Games as revenue as well, because the company makes a lot of money off of other developers licensing the Unreal game engine. I think Apple making that move is kind of stupid, you know what. No, No,

not kind of I think that move is monumentally stupid. Now, the reason I think it's stupid is because it appears to prove the point that Epic Games claims it is making that Apple can and does act like a monopoly. Because it's very hard to not interpret Apple's move as extortion or retaliation, applying brutal leverage against Epic Games to

force it to comply with Apple's standards. Now, yes, Epic Games agreed to those standards just through the process of submitting Fortnite to the iOS store in the first place. So Epic is not innocent here. They did violate that agreement. However, the retaliation and the impact of that retaliation, and the implication that Apple could do serious harm to Epic Games as business, as well as the business of unrelated companies, all that seems to lend credence to Epics argument that

Apple is imposing its will on other companies. Now, it's one thing to remove an app that's in violation of the agreed upon policy. To me, that seems like it's pretty clearly on the up and up, but then to go further and remove all support for Epics products feels extreme to me, particularly since this has a cascading effect on other companies that did nothing wrong. All those other companies did was licensed a game engine that powers their games.

So is it fair to make this kind of change one that's going to have a negative impact on third parties that had nothing to do with the dispute in the first place. I think epics experience in launching the game Store, which itself was a response to valves Steam store policies, gave the company the courage to try and launch this battle against Apple and to a lesser extent, Google. Seeing the escalation is more than a little bit worrying.

And while the matter is going to the court system thanks to the lawsuits, we're gonna have to wait a while for that to play out, because, you know, we know, the legal system moves at a let's call it a leisurely pace compared to the worlds of technology and business, so it might be a while before the law is

able to really wade in into this now. My bet is that Epic is hoping that the more recent focus on companies like Apple and Google when it comes to antitrust issues, will provide political pressure so that the companies can negotiate that cut, or somehow Epic can force Apple to allow for more direct pay options. Honestly, don't know how that's going to go for Epic. Apple is a huge and incredibly wealthy company, and it didn't get wealthy

by capitulating to other companies. I don't think there's necessarily a hero in this story, because it really just comes down to money. I think Apple has behaved in ways that are anti competitive, but when it comes to cut, that has become fairly standard and digital stores across the board, So it's not like Apple is being you know, greedier than anybody else's. And granted it is not always the case.

Epic itself has set itself apart by taking smaller cuts of transactions in the Epic Game Store, But I don't know that you can argue that Apple stands out as being particularly evil because of this policy. Lots of digital stores have the exact same policy. Now, the fact that you can only get apps on an iPhone through the App Store without hacking your phone, that is, does make it a little more tricky because there's nowhere else to go when it comes to the iPhone, so I guess

that does set it apart. In fact, this is one of the ways that things branch between Apple and Google. You can only get apps for the iPhone through the Apple App Store, but Android devices support a couple of different ways you can get stuff. You can sideload stuff that's not from the Google play Store. It requires you to change some settings on your phone, but you can totally do it, and Android users can download Fortnite onto

an Android device directly from Epics app launcher. Google removed Fortnite from the play Store itself, so you can't just download the app directly through Google Play. But you can still get Fortnite on an Android device and you can still run it without a problem. You just can't go through the play Store to do it. Google, like Apple, said that they removed the game because epics decision to

offer direct pay violated store policy. But unlike Apple, Google hasn't gone all angry crime lord boss with threats about Epics tools set and saying like I want the app dead, I want the unreal engine dead, I want those s D gays in the ground. They haven't done that recently.

Apple CEO Tim Cook appeared before Congress and he was asked by Presentative Hank Johnson, who coincidently represents my state of Georgia if the company had ever quote retaliated against or disadvantaged a developer who went public with their frustrations with the app store end quote. Cook's response was, quote, sir, we do not retaliate or bully people. It's strongly against our company culture end quote. I'm not certain how well that would go over today, as the Epic versus Apple

saga has been unfolding again. Not to say that Epic is without blame here, but the decision to remove epics access to developer tools for iOS and mac os seems like retaliation and bullying to me. Removing Fortnite makes perfect sense. I mean, that was the the app that violated the policy. That makes sense to me. Removing epics ability to develop for iOS and mac os entirely, thus impacting Epic and numerous other companies aonomically that one I think is harder

to support. As I record this, we're in the very early stages of this particular fight. At the moment, I think it's safe to say that the US government has a few irons in the fire right now that need tending to plus an election coming up, so I wouldn't be surprised if it takes a little bit of time to get around to taking another really hard look at allegations of you know, monopoly practices or anti competitive behaviors

in the tech space. But it's clearly something that has become a growing concern and government as more practices in the tech space are held up to scrutiny. Now this gets complicated by the fact that Silicon Valley pours a lot of money. I almost used a different phrase that is not you know, family friendly, but a lot of money into lobbyists and campaign contributions, and thus Silicon Valley has a large amount of influence when it comes to

US politics. But I expect we're going to see more are shifting as governments feel pressure to regulate or break up or otherwise intervene in business practices in the tech space. Meanwhile, Fortnite players who play on iPhone or Mac are likely watching all of this with a little bit of stress and probably makes doing that flossing dance a lot harder.

But to be less flippant, it really is a shame that they are caught in the middle of all this, that those players are stuck as these two giant companies battle it out. They just want to play a game that they enjoy, and they don't really have any options as far as having an impact on this. They can perhaps shift to playing it on a different platform, but

not everyone has that, you know, luxury. So I really do feel for Fortnite players, even though I personally don't like playing Fortnite because I'm old and I don't do well at it and it confuses me. But I hope that things get resolved, that the players are able to play the games they want, and that we're able to take a good hard look at how these companies generate revenue, how they price things, and really come to a good conclusion that works out best for all parties involved, including

us the consumers. I am skeptical that that will happen, but I'm hopeful that wraps up this episode. If you guys have suggestions for any future episodes of tech Stuff, whether it's a company, a trended technology, a specific tech you want me to cover, anything like that, let me know. Reach out to me on Twitter. The handle is text stuff H s W and I'll talk to you again really soon. Text Stuff is an I heart Radio production.

For more podcasts from my heart Radio, visit the i heart Radio app, Apple Podcasts, or wherever you listen to your favor jumps