Fortnite May Return to iOS If Apple's Rules Don't Get in Way
Tim Sweeney announced the return of the Fortnite game to Apple devices, even though the humor was spoiled by Apple's new and controversial terms and conditions for distributing the app on iOS devices.
Fortnite is finally set to return to Apple devices - but only in Europe. Epic Games announced that the popular battle royale will return to iOS this year via the Epic Games Store (via X).
This announcement is the result of changes in the regulations of the App Store platform, which allows developers to refer players to external sites to make purchases, but also of the need for Apple to adapt to the Digital Market Act (DMA) in the European Union. Apple is introducing new rules in Europe in response to the requirement to comply with regulations imposed by the European Commission.
The company outlined the new changes in a statement on its official website. Additionally, let's note that globally, Apple will also allow streaming services in its store, such as Nvidia GeForce Now and Xbox Cloud Gaming.
Apple (seemingly) yields to the EU
You may remember that after the first mentions about changes in the App Store were revealed, many people criticized the platform owner because the rules de facto discouraged selling outside of it. Tim Sweeney was at the forefront of this, and the president of Epic Games did not fail to criticize the new rules announced by Apple. Besides, he wasn't the only one.
Sweeney's objections (via X service) have already sparked the need for Apple to approve access to another store. Indeed, Sweeney understands that control is necessary to filter out sites with malicious software, but he believes that the company can use this to block the platforms of competitors, such as the Epic Games Store or Steam. In addition, Apple has high requirements regarding alternative stores (including a letter of credit in the amount of one million euros from a trusted financial institution).
It's also worth noting that Apple imposes a requirement to grant a "hosting application" (i.e. granting access to other programs) age classification equal to the highest awarded to the products available through it. In practice, this would mean that many streaming services like Xbox Game Pass and GeForce Now, as well as stores like Epic Game Store, would have to be labeled as adult-only apps.
Popularity tax
This is not the only problem with the new rules. Companies utilizing Apple services in Europe will also be charged a Core Technology Fee.
In the shortest terms possible: it will be collected by Apple for each "first annual installation" on one account above the first million installations. Apparently, this also includes re-downloads and updates, although for the next 12 months, developers do not pay for additional "installations" on the same account. In addition, developers will be able to choose whether they accept the new terms or stick with the old ones.
Importantly, the fee will apply after the new rules are adopted, regardless of whether the company uses or not the option to distribute its programs outside the App Store. This is problematic, because with two million "first annual installations" you will have to pay over $45,000 per month (see the official Apple calculator). In the perspective of a year, this gives over half a million dollars, which the creators of free applications will have to pay Apple.
It is true that the new conditions also mean a reduction in the margin from 17-30% to 10% or 17%, with the "vast majority of developers and subscriptions after the first year" paying this lower rate (the higher rate applies to "transactions for digital goods and services"). Except that in addition, you will have to pay a 3% tax for processing payments through the App Store, unless the company uses the services of another "payment service provider" (via Apple).
According to preliminary calculations by Nikita Bier (one of the creators of the now inactive Gas application; via website X), for every $10 million Apple will receive $6.2 million in revenue from the sale of the game and microtransactions (via website X). After deducting taxes, the creators will be left with 2 million dollars, which is 20%.
Will Apple manage to convince the European Commission?
Apple claims that the new rules will result in a reduction or maintenance of the current costs of using the App Store for "over 99% of developers". As in the previous announcement, Apple justifies that the fees are to reflect the "value delivered by the technology platform [App Store - editorial note]. and independent services regardless of the capabilities and distribution of the App Store".
Nevertheless, the company still has to convince the European Commission of its arguments. The DMA states that gatekeepers must "apply fair, reasonable, and non-discriminatory general terms and conditions for business users that use their app stores. Considering the initial reactions to Apple's new conditions, European regulators may have reservations about the "fairness" of these rules.
