Fighting Apple cost Epic Games more than $1B; CEO says it was worth it

Epic Games‘ five year legal battle against Apple has cost the developer well over $100M in legal fees alone, and CEO Tim Sweeney says that the total cost has been north of a billion dollars.

While Sweeney thinks it was worth it, one high-profile Apple commenter has his doubts – suggesting the legal victory doesn’t necessarily mean Fortnite will be allowed back into the App Store …

A quick recap

Epic Games flouted Apple’s App Store rules by introducing its own in-app payment system, bypassing Apple’s 30% commission. That was a blatant breach of Apple’s rules, and the company threw its games out of the App Store.

The two companies went to court, and Apple mostly won – but the judge ruled that the company must allow developers to make in-app sales through their own channels without the iPhone maker taking a cut. Apple responded by declaring that it would continue to demand commission even on sales made outside the App Store. Epic returned to court to fight this, and the judge confirmed that Apple lied under oath, was flouting her ruling, and must now comply. She’s even referred the matter for criminal investigation.

Apple is now complying – with companies like Amazon and Spotify immediately taking advantage of this. The iPhone maker does, however, plan to appeal.

Fighting Apple cost Epic Games over $1B

In an interview with Business Insider’s Peter Kafka, Sweeney outlined the financial hit the company took by choosing to fight the case.

We’ve had legal bills in the matter of Epic vs. Apple of over $100 million […]

But if you look at lost revenue, that’s another story. We can’t predict exactly how much we would have made on iOS, but in the two years that we were on the platform, Fortnite had made about $300 million on iOS. So you could have projected hundreds of millions of dollars of lost revenue as a result of the fight.

[Additionally] Apple cutting off Epic from access to the entire iOS audience, that not only affects the players that are directly denied access to Fortnite, it also affects all of their friends who might have played Fortnite more or might have played Fortnite but didn’t, because their friends weren’t able to play.

So you could easily imagine that there’s been a billion dollars or more of impact to Epic in this time.

Sweeney said it was worth it.

I think freedom cannot be purchased at too dear a price. The world needs to change here. And if it doesn’t change, then you’re just going to have Apple and Google extracting all of the profit from all apps forever. And there will be no proper digital economy. It will just be monopolization.

John Gruber has doubts

Sweeney’s sums are calculated on the basis of Epic being able to return to the App Store, now making significantly more money. He said yesterday that he expects Fortnite to be back on the iPhone within a matter of days.

However, Apple hasn’t restored the company’s US developer account. Epic plans to use an EU account it opened after being banned in the US, but Apple commenter John Gruber isn’t at all confident that will be allowed.

If Apple were going to allow Fortnite back into the App Store they could have done so at any point in the last four years. And there’s nothing, not a word, in Judge Yvonne Gonzalez Rogers’s decision last week that says Apple needs to reinstate Epic Games. I think Apple just stays the course and Fortnite remains persona non grata as far as the App Store is concerned.

9to5Mac’s Take

Gruber is technically right, though the judge might take a dim view if Apple first had to be dragged back to court to be berated for not complying with her ruling, and the company then decided to comply while excluding the company that brought the case.

It probably wouldn’t be wise for Apple to refuse, but then it wasn’t wise to let things reach this ridiculous point …

Photo by CardMapr.nl on Unsplash