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How Epic’s war with Apple and Google could backfire

It’s obvious by now that Epic Games was hoping for a war when it announced its V-bucks “direct payment” option.

It was one of the most well-planned and well-executed PR stunts in the history of the video game industry. And while the company got a lot of support initially after swift reactions by Google and Apple, this is not likely going to be a short fight. And the longer it goes on, the greater the odds that Epic — and Fortnite — might lose not only the support of its fan base, but millions of dollars as well.

A fight Epic Games wants

Epic founder Tim Sweeney has never been afraid of a good fight. In fact, he seems to revel in them occasionally. Think back four years and you’ll recall he accused Microsoft of virtually the same thing he’s alleging Apple and Google are doing – running a monopoly.

“In my view, this is the most aggressive move Microsoft has ever made,” said Sweeney at the time in an op-ed published by The Guardian. “They are working to turn today’s open PC ecosystem into a closed, Microsoft-controlled distribution and commerce monopoly, over time, in a series of steps of which we’re seeing the very first.”

That battle, in some ways, led to Epic opening the Epic Games Store — a competitor to the Windows Store and Steam. And that venture has been remarkably successful for the company.

It’s highly doubtful that Epic plans to launch a phone line to take on Apple and Google, of course. But the lawsuits it filed after Apple and Google stripped Fortnite from their app stores potentially pave the way for an expansion of its own retail efforts.

The lawsuits it filed after Apple and Google stripped Fortnite from their app stores potentially pave the way for an expansion of its own retail efforts.

That makes sense from a business perspective. And Apple was already in the crosshairs of district attorneys for its business practices. Epic simply has the size and bankroll to take on the tech giants. The question is: How will players respond?

The potential for backlash

No one has ever complained about paying less for something they’re already buying, so the initial reaction to Epic’s move was, of course, overwhelmingly positive. Even people who acknowledged Epic agreed to Apple’s policies and technically might have deserved to be booted were still rooting for the game developer.

On Aug. 27, though, Fortnite Chapter 2 Season 4 is set to drop. And players that downloaded through the App Store or Google Play won’t be able to download that version, Epic confirmed. That’s when the real test begins.

Fortnite, of course, has a thriving business outside of the app stores. PC and console users make up a sizable percentage of the player base. But excluding mobile-only players from the latest skins, maps, and features could create a divide. Epic’s already rallying the player base to point the blame for that at Apple with its parody 1984 video and the #freefortnite movement on social media. (Again, the pinpoint execution of this move just cannot be overstated.)

Fun videos and discounts can only take you so far, though. If people are left behind by the game’s latest advances, they’re not going to spend their time protesting — they’re going to look for something else.

If people are left behind by the game’s latest advances, […] they’re going to look for something else.

That creates financial risk. Research from Apptopia shows that other apps, like PUBG Mobile, Knives Out, and Garena Free Fire, are already boasting higher in-app purchase revenue than Fortnite on mobile platforms in the last 365 days.

In the past 90 days, Fortnite has generated $60 million of in-app purchase revenue from iOS and $4 million from Google Play (after store fees), per Apptopia. That has meant an extra $26 million in Apple’s pockets and another $1.7 million to Google.

That’s big money, but for all of the principal companies, it’s really just a drop in the bucket. (Epic was recently valued at $17.3 billion after a $1.78 billion funding round closed.)

Epic is likely willing to forgo that revenue, but in doing so, it will have to turn its back on some of its players. That’s a dangerous game.

Tim Sweeney doesn’t act rashly. He knows what’s at stake here. And he knows there will be groups that rally to his side (including pro-consumer advocates and likely other developers who want Apple to lower its commission) and groups that will stand against him. It’s a fight that likely won’t end soon and could go to the highest levels of the legal system.

That makes this year’s election all the more critical. Michael Pachter, of Wedbush Securities, notes in a must-read tweet thread that whoever’s elected president could have a big impact on how this all plays out.

“A ‘normal’ Republican administration would be ‘friendly’ to business and would not interfere,” he writes. “A ‘normal’ Democratic administration would be pro-consumer and more antibusiness, and would likely favor Epic as the ‘little guy’ battling big bad Apple. This will be an interesting one, and the outcome of the election may determine who wins.”

Ultimately, Epic and Apple could redefine what “Battle Royale” truly means.

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