Three years after Fortnite’s debut, Epic Games is at a level of success unforeseen for developers of its ilk.
In 2020 alone, Epic saw Fortnite reach 350 million monthly active users, continue to foster brand partnerships with big companies and artists and close a $1.78 billion funding round, leaving Epic valued at over $17 billion.
But founder and CEO Tim Sweeney’s lawsuits against Apple and Google are dipping deep into the fantasy realm, and he would do well to remember his company’s own stint as a defendant.
Following the success of “PlayerUnknown’s Battlegrounds (PUBG)” in 2017, Epic saw fit to adapt its “Fortnite: Save the World” early-access game into a free-to-play version of PUBG’s battle-royale model.
After the game skyrocketed in popularity, PUBG Corp filed a lawsuit against Epic that was withdrawn less than a month later, alleging the company infringed on PUBG’s copyrights.
PUBG’s claims were perplexing. While Fortnite did have similar gameplay (parachuting players, a sphere that closes in on the map), these elements, and the basic premise of battle royale, were not copyrighted by anyone.
But now Sweeney is being as unrealistic in his lawsuits against Apple and Google as PUBG once was against Epic.
First, Epic did violate both companies’ terms of service by offering players a payment system for discounted in-app currency through Epic instead of the App or Play Stores, skirting the 30% cut they take from in-app sales through their platforms. Convincing the court to overlook this and see Epic’s decision as a necessity in order to resist what Sweeney has deemed unfair monopolistic systems will be challenging.
Second, while Sweeney is taking the side of smaller developers who suffer more from these monopolies, there is no alternative platform for mobile gaming they can turn to the way developers of PC games can with Epic Games Store (EGS), which offers generous incentives meant to combat Valve’s 30% cut of Steam sales.
While EGS has been fruitful for Epic, Valve is doing just fine with Steam. Thus, Sweeney doesn’t have much in the way of observable evidence that Epic’s fairer revenue split has already been a game-changer for any specific market, which could make it difficult to garner more support from others if they can’t outline how and when the mobile market could change for the better.
Apple already escalated the situation Monday by confirming it would terminate Epic’s developer accounts on August 28 if an agreement wasn’t reached, blocking access to iOS and Mac dev tools.
This would be catastrophic for Epic’s Unreal game engine, already in use by many developers publishing games for iOS and Android, and would put another dent into Epic’s revenue streams alongside the daunting loss of Fortnite’s revenue from Apple and Google, which surpassed $1 billion in April. (For reference, Fortnite’s overall 2019 revenue was $1.8 billion.)
Epic’s legal filing Monday against Apple acknowledges this much, which is why it’s so baffling that Sweeney hasn’t been convinced to pump the breaks. He may be sticking up for developers, but Apple made it crystal clear it isn’t budging, and Fortnite’s mobile players are deprived of their gaming fix amid an ongoing pandemic.
If Fortnite stays blocked after the 28th, Epic must be ready to incur the wrath of its fans, as this is already far from a two-day promotional blackout.
If Sweeney envisions himself as a hero and market savior when the odds of these lawsuits are stacked against him, it’s possible three years of Fortnite domination and ever-growing investments have warped his capacity for patience throughout Epic’s decades-long existence.
Sweeney must chart a smarter path to the future he wants for developers, because unlike PUBG, he does not have a month to exercise humility … before the sphere closes in.