Words by Sebastian Lager, esports veteran actively involved in the space since 1999 and founder of TwogNation
Video games changed the world, whether we want to accept it or not. As a species, we are inclined to fill our time. After all, humans are not evolved to sit and do nothing all day. Since the '70s gaming as an industry is improving, we have started with Nintendo 64's and Atari's and now we are here, in a multi-billion-dollar industry.
The gaming world branched out and became more acceptable, the new generation is much more open to playing games. Nowadays, we even have universities filled with esports students and game developers because the market is growing constantly. Another accelerator was mobile gaming. Smartphones made gaming accessible to millions. Certainly, this was not expected when the first iPhone was released.
But of course, like every industry gaming has its issues. There are big wolves and small wolves. Some are on PC for example Steam, and some are in mobile gaming. When we are taking a look at the mobile gaming market, we can see that it is dominated by two marketplaces App Store and Google Play Store. These companies are so big and vast, nobody messes with them. Apple regulates its marketplace more than others and this created criticism for years.
Apple was and is one of the biggest companies in the world. They are not only a smartphone company with an App Store. They have many ventures in different fields. Currently, American tech sector companies combined are bigger than the entire European Stock Market. Apple alone has a market value of $2.2 trillion. These companies are so big they can infuse their power into different regions of the world.
They also try to control everything you own. Everything you own from Apple forces you to stay in their ecosystem, from their chargers to their software. They are one monopolistic giant. In the 1910s America had to divide Rockefeller's companies for their monopolistic ventures and now we are facing a bigger one. Since the whale is this big there are a lot of issues as well. Apple is one of the major phone manufacturers, and they have a closed ecosystem, and therefore apps created by other developers are subject to strict, intrusive guidelines and rules. The heart of the problem was these rules. Countless times we heard that Apple was bullying small developers with their guidelines. But most of the developers were silent about it since Apple offered one of the biggest marketplaces available in the world. However, some opposed them in the end. The one we all know by a game that changed an industry, Epic Games.
Let us make something clear Epic Games was not a small company before Fortnite. Prior to Fortnite Epic Games was known for their Unreal Engine and they were really successful with it. Hundreds of games are still in development using the Unreal Engine. However, they got true international recognition after the release of Fortnite. Fortnite Battle Royale’s story was a success for sure, although it was meant to be a mode for the actual game, Fortnite Save the World.
After PUBG's initial success Epic Games decided to add the Battle Royale mode to their upcoming survival game Save the World. After Fortnite was released for free, thousands of console players finally had access to a free-to-play Battle Royale game. Currently, the biggest market is console gaming, and this simply skyrocketed the popularity of Fortnite and Epic Games along with it. Fortnite dances performed by celebrities and football players, everybody heard about this game, that changed an industry. Then Epic Games decided to take a bigger step and released the Epic Games Store.
Today these companies are at each other's throats. Let us look at the timeline and try to get a clear picture. Most of us know that this issue sparked when Epic Games decided to implement a new payment system in Fortnite on mobile devices. For players, it was a good deal because they were going to get a discount, but in order to use the discount, they need to use the separate payment option, which did not give Apple's App Store even a penny. Of course, Apple retaliated immediately. However, this was in the making for months by Epic Games. Epic Games CEO and founder Tim Sweeney tweeted several times about Apple's marketplace months ago and complained about the structure. Epic was ready for this and Apple was not. But are they really that different from each other?
In reality, Epic Games fired the first shot, bypassing the payment system App Store has. The fight might be shown as between Epic vs. Apple but Google also banned Fortnite because they were breaching their guidelines as well. But Apple was the main target here, so when Apple retaliated, they unleashed their plan and the #FreeFortnite video. This video was a perfect flashback to George Orwell's infamous novel "Nineteen Eighty-Four".
The more educated ones and the older people knew how big of a slap it was to refer to the "Nineteen Eighty-Four" novel. In this video, Epic depicted Apple as a "Rotten Apple" and stated these exact words "Epic Games has defied the App Store Monopoly. In retaliation, Apple is blocking Fortnite from a billion devices. Join the fight to stop 2020 from becoming "1984". Most of the Fortnite users are young and they did not understand the importance of this video. Epic stated these words but at the same time, they are doing the exact same thing with their Epic Games Store.
Most of the people outside of the industry do not know about the ongoing struggle between Epic and Valve. Valve has one of the biggest marketplaces in the world, which we know as Steam. Epic Games decided to implement the same structure that Valve used 20 years ago with Counter-Strike. When Counter-Strike became popular Steam was mandatory in order to play it, therefore millions of computers around the world had to install Steam. So the users of a game got sucked in into a marketplace. Epic Games did the same thing, in reality, they created the Epic Games Store and made it mandatory to download in order to play Fortnite. When Epic Games released the Epic Games Store they faced an uphill battle against Steam.
Epic is doing exactly what Apple did, right now let's call it the “silicon valley stigma of monopolizing everything”. They are as authoritarian and monopolistic as Apple, at least they try to be. Some can even argue that game publishers even have a tighter model. Just like Apple, Epic has publisher rules, where they tell what to do to streamers, developers, and partners. At least with Apple, you have a legal standpoint. But when it comes to publishers things are tighter and more controlled, they can remove your partnership at a whim.
They make games exclusive to their store and even though they face the wrath of the consumers, they do not mind.They try to soften the blow, Epic did soften the blow by offering 1-2 free games each week. This tactic worked in order to suck the consumers into the marketplace. Epic stated that "Steam is charging %30 commission in their store, we charge %12, come to us" to developers. However, those games became Epic Games Store exclusive games therefore they have to follow the rules and guidelines Epic Games imposes, exactly like Apple does. Epic is creating their own ecosystem.
So we have two cowboys in a standoff, one has a bigger gun and the other one has some buddies standing in the shadows. Let us take a look at the current allies of Epic Games. Microsoft, Facebook, Tinder, Spotify and Valve announced their support for Epic. However, they can not act upon it. They will announce their support only. However, none of these companies will act in the name of Epic and remove their apps from the App Store or help Epic financially. Their allies are not a united front. But still they play the game and force Apple to make mistakes.
Apple did make a mistake and that was poking the Unreal Engine beehive. The Unreal Engine is still used by thousands of developers on tens of thousands of games. It is the most widely used game engine on the planet and Apple stated that they will remove the apps that use Unreal Engine. Epic is holding a beehive in their hands and Apple is willingly poking it, and creating more enemies. This has a trickle-down effect since it is not the developers punished only, the fans of the games are also getting punished by this. Epic knows their strengths and they are playing a very good game, they are making it as dramatic as it can be and trying to gain allies for the long run.. As we have said Epic is trying to get some allies and by the looks of it, Apple is offering it to them. There is a long battle ahead for these companies. It comes down to who can last longer?
In reality, Apple is dealing with these types of problems on a nearly daily basis. The company is so big there are too many lawsuits from individuals, developers and not to mention the countries. Even entities like the European Union are going after Apple for being anticompetitive. However, they can take these hits. We are talking about a $2.2 trillion-dollar company after all bigger than some countries. Apple can last longer than Epic, they can lose money, customers, and time, but Epic can not. They are not as big as Apple but they have one important leverage here forcing Apple’s hand. If Epic did not force Apple's hand so much, they might have settled a deal long before the events.
Apple can not create a special deal for Epic Games. This is the heart of the problem, if Apple creates a special deal, thousands of developers will ask for the same thing, "discounts". Apple can not make this deal and the longer they hold off Epic at the bay worse they look at the eyes of the fans. Let us be real, like every industry, people have choices and Apple's fans are like a cult.
They love their product just like Fortnite users. Right now because of this issue these fans are divided into three pieces, Apple supporters, Epic supporters, and people in between. However the longer Apple says no to deal, the worse they will appear in front of their fans. People are being forced to delete an app from their iPhone or deleting their iPhone. In the long run, I believe Epic will settle for less than full autonomy. Over the last two weeks, we did not hear another big company announcing their support for Epic as well and the companies will have to listen to their communities at some point.
Apple will stay adamant until the very end for sure. They do not have a united front against them even though big companies announced their support for Epic Games. This is not like Apple vs. the entire World, like Epic is trying to show. They do not look impressed and they are carrying out their plans forward. Epic is trying to shake off Apple's position in reality. They are not here to win this battle.
Every move of Epic is like a chess move, it was planned and they are ready, they cannot make a mistake. However, they are trying to dent Apple's armor since they know that if they can dent it even one bit, Apple will become a "Rotten Apple" just like in their #FreeFortnite video. Apple lost some battles but none of these battles were in their App Store policy, since the guidelines are clear on that front. That is why Judge Yvonne Gonzalez Rogers stated that Fortnite violated Apple guidelines therefore Apple has a right to remove it but it was too much to remove Unreal Engine developed games from the App Store.
Currently, both companies are doing very well. Because of the Coronavirus pandemic, a lot of people are playing games and it helps Epic. However, at the same time, Apple is doing record-high sales, and they are becoming bigger and bigger. Epic is crashing Apple's party by the looks of it. They are like an annoying mosquito giving them sleepless nights. As we have said before there is a long battle ahead and only time will tell who will win.
Whatever the results might be, it will be an indicator for esports and gaming for the years to come.
About SiGMA Europe - Malta
SiGMA Group has announced the postponement of its Europe summit, which was planned to be held in Malta on 17-19 November 2020. The show will now open its doors early next year in February, running from the 16-18th, making it the first event to headline the 2021 gaming calendar.