Microsoft extends a shield-potion to Epic Games

The battle — ongoing since August 2020 — between Epic Games and Apple saw an unexpected twist last Tuesday after Microsoft stepped onto the turf, extending a timely shield potion to Epic Games: Microsoft said its bringing Epic’s storefront to its very own app store. That wasn’t all. The company also said it would not take a cut from Epic if the gaming firm directs gamers to its own payment systems.

This is a significant development for the app development industry as a whole.

David Vs. Goliath

Gamers would recall the ‘David Vs Goliath’ moment from last year when Epic — the makers of the popular video game Fortnite — sued Apple after the Cupertino-based smartphone manufacturer booted out Fornite from its App Store. The trigger for this? Epic introduced a direct payment option that helped Fortniters bypass the App Store and complete their payments outside the App Store.

Apple and Google charge between 15% and up to 30% on in-app purchases.

The legal wrangle lasted for more than an year until — on September 9th 2021 — Judge Yvonne Gonzalez Rogers issued an order that allows app developers to add ‘buttons, external links, or other calls to action that direct customers to purchasing mechanisms’ into their apps. Recall that Epic had filed an ‘anti-trust’ lawsuit against Apple; and, while the Judge did rule in Epic’s favor on the payment related point, Apple — despite getting nicked — appears to have emerged victorious since the ruling labelled its conduct ‘anti-competitive’ and not ‘monopolistic’.

But that nick counts. Epic plans to appeal the ruling.

Microsoft extending a shield potion to Epic Games is not a conscientious act

In a move that may have wider ramifications for the Epic-Apple appeals, Microsoft, last Tuesday, also said it would “allow third-party storefront apps to be discoverable in the Microsoft Store on Windows.”

Microsoft possibly sees the writing on the (garden) wall earlier than Apple and Alphabet; and, sees its store launch on October 5th 2021 as an opportunity to build on its promise to promote ‘choice, fairness and innovation’ in its app store.

This is a June 24th, 2021 update on the Microsoft Store policies:

Starting July 28, app developers will also have an option to bring their own or a third party commerce platform in their apps, and if they do so they don’t need to pay Microsoft any fee. They can keep 100% of their revenue.

Microsoft allying with Epic Games may either trigger more app defections — as developers with payment capabilities will see a clear fee arbitrage opportunity with Microsoft now —from Apple Store and Google’s Playstore or may force Apple and Google over the long-term to cut fees to zero as well.

Epic defines its end-game: Its Victory Royale

Epic in their response to Judge Yvonne Gonzalez Rogers’ ruling indicated that the fight is far from over and the game-developer will pursue it’s initial stance (through appeals): that Apple’s app store policies are ‘monopolistic’ (or more accurately ‘duopolistic’ if you throw in the other Goliath — Google Playstore)

Epic’s CEO, Tim Sweeney, is convinced that app stores — whether its Apple’s or Google’s — cannot remain ‘walled gardens’ anymore and must ‘open up to third-party stores as well’

For now, Apple has blacklisted Fortnite from the Apple Store until all the court appeals are done.

This battle is going to be bigger than Apple Vs Qualcomm (over patent licensing). Much bigger than Oracle Vs Google (over plagiarism)

This is going to be protracted. This is going be ugly.

Make no mistake.

This is Battle Royale!