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Microsoft has thrown its weight behind Epic in the big battle with Apple

Tim Cook
Tim Cook (Image credit: Apple)

Recently, Epic dropped a bit of a bombshell by knowingly violating Apple's app store policies, leading to not only its popular game Fortnite being removed from iOS devices, but Epic Games' entire Apple developer fell in jeopardy as well, threatening the Unreal Engine SDK itself.

Epic clearly knew what it was doing, since it had an entire viral marketing campaign prepped for being removed from the Apple app store, while also signing up a very powerful legal team aimed at taking Apple to court, pressing them to remove, or at least alter, their 30 percent cut on in-app purchases for developers on its store.

Today, Microsoft itself joined the fight, issuing a statement in court on why it thinks Apple is being heavy-handed, and how Apple's behavior could threaten Microsoft's own games on iOS, such as Forza Street. Head here to read the full court filing, issued by Microsoft General Manager, Gaming Developer Experiences, Kevin Gammill.

Epic Games' Unreal Engine is critical technology for numerous game creators including Microsoft.(a) Game engines provide creators with a development environment that delivers the necessary graphics, rendering, physics, sound, networking, and other technologies that enable them to build games that run on multiple platforms.(b) Although some large game creators choose to develop their own proprietary game engines, many others, including small and independent game creators, utilize game engines built by and licensed from third parties.(c) Many of these creators do not have the resources or capabilities to build their own game engines and rely on the availability of third-party game engines, while other creators may choose to use third-party game engines to save development costs and utilize already-developed technologies.(d) As a result, Epic's Unreal Engine is one of the most popular third-party game engines available to game creators, and in Microsoft's view there are very few other options available for creators to license with as many features and as much functionality as Unreal Engine across multiple platforms, including iOS.(e) Microsoft has an enterprise-wide, multi-year Unreal Engine license agreement and has invested significant resources and engineer time working with and customizing Unreal Engine for its own games on PC, Xbox consoles, and mobile devices (including iOS devices). For example, Microsoft's racing game Forza Street is currently available on iOS and utilizes Unreal Engine.Denying Epic access to Apple's SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS, and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage.

Microsoft was in its own spat with Apple's gaming policies recently, since the firm blocked Project xCloud on iOS for arguably dumb reasons. With Apple already being investigated by antitrust regulators across the world for its behavior, it'll be interesting to see how Epic's court battle may factor into any future legislation targeting Apple.

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Jez Corden is a Senior Editor for Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

36 Comments
  • Either Apple will create their own game engine or leave this fight for some years.
  • I think, in the long run, Apple may lose out on games if they continue down this road. No matter how big or successful any software company may be at the time, the real backbone are the countless small, medium and large developers that choose to put untold man-hours into building apps for your ecosystem. There's a reason Epic's Unreal has come this far, and it simply is the sheer volume of devs that use it. It can be argued that it's probably not the greatest engine out there, but what is far more important is that very very many developers from AAA to indie make use of it for Playstation, Nintendo, Xbox, Windows etc. This happens all the time in software development. It is the platform that is embraced that wins, not so much because of its intrinsic quality, but because of the massive ecosystem size around it. For games, Apple should work this out with Epic.
  • Don’t worry there are way more developers in Visual Studio/.NET ecosystem. “Even uncertainty about the Unreal Engine’s ability to continue supporting iOS and macOS will make it less likely for Microsoft (and, I believe, other game creators) to select Unreal Engine for their projects.”
    “The statement also goes on to say that if Unreal Engine couldn't support games for iOS or MacOS, Microsoft would be required to choose between abandoning its customers and potential customers on those platforms or opting for a different game engine.”
    The latter sounds like the right direction to me. Microsoft has the largest software prowess and historical advantage to pull off something like that and save billions of $ in licenses payment to that Tim Swooney. In fact Microsoft is in the perfect position since it already has vastly mature software development ecosystem and services.
  • Microsoft has nothing like Unreal, and it would take them the better part of a decade to build something like Unreal. Visual Studio is an IDE, it is not a game engine. .Net is an application framework, it is not a game engine. MS's in house engines are not set up to be able to be licensed to third parties, and adapting them to do so, especially for mobile where they have no presence at all is a huge undertaking. The only real alternative to Unreal is Unity. Nothing else is even remotely close when it comes to quality and more importantly tooling.
  • Apple is burning their candle and fast especially if a real economic crisis comes around the corner... Apple is a giant but a clay giant... They have nothing solid as a backbone compared to houses like MS.... A good storm and they could be gone or at least back to the nerdy brand status of the 89's and 90's... The world can do without Apple way more easily than without Google or MS
  • Lol Apple game engine... With the starling creative power house they have been since jobs is dead... It's about as likely than an successful Windows Phone
  • "Denying Epic access to Apple's SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS, and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage." That's clearly up to Epic to compile with the licensing agreement. If I am not compiling with Microsoft's licensing agreement, no doubt developer accounts and access to tools/sdk could potentially be withdrawn. Whether Microsoft is impacted is not of Apple's concern or contractual obligation, that is a dispute of contract between parties Microsoft and Epic - not Apple. Without licensing i.e. contracts, none of these companies exist in their present form. Essentially, Microsoft is saying that Epic should be able to operate without license as it pertains to Apple but they don't say the same thing about Microsoft's own technology, tools and sdks. Apple, Microsoft, Epic, Amazon, Google, etc. don't have a business without licensing and enforcement.
  • If Apple is abusing their market position in order to force excessively favorable licensing terms, they're breaking anti trust laws. Also Epic getting their dev credentials pulled seems more like retaliation over the lawsuit and PR campaign than an actual violation of store policy. This isn't just Fortnite getting kicked off the store.
  • 1. The licensing terms are generally the same as everyone else in the industry, Epic actually isn't saying that in their petition... they are saying all markets need to be open and free of licensing. Go read it, but generally agree there could be a point of monopoly type powers but that just isn't the case here. 2. Since Epic on purpose (intended) to harm Apple than Apple has that ability just like all the tech companies could or would do - cut access. Clearly, Epic was not working in good faith. I would say it was Epic that is trying to make this into a PR stunt but either way... not sure what that has to do with the Court. I would imagine if one breaks Epic's licensing for Unreal or the Epic Store, they would do similar... which is why they had the request for injunction ready to go. This will end very poorly for Epic, but they got money to burn. As for Microsoft, they should have required additional protections before using Epic's tools. This is why many developers build their own tools i.e. risk management. Microsoft's stance is very silly and strange as they trying to have a court dictate licensing terms for a case in which they are not even a party.
  • https://www.youtube.com/watch?v=H6eYLCxxQdA I'll just leave this here, Apple DO abuse their market position to get favourable terms for them as shown in the video.
  • Every business uses their products and service to get favorable terms, I would think that would be common sense. https://www.youtube.com/watch?v=y04zz5g1_08&t=51s Basically Hoeg Law made a video to show the silliness to Epic's stance. Epic's petition is fairly laughable, basically he wants a world without contracts and without restrictions. Epic is now in a very bad spot as they are not working in good faith, I noticed Hoeg mentions in his last video, "unclean hands" in Apple's response to the TRO request.
  • The point was to go to court to make it official that their licensing agreement is not legal.... But I'd love to see the court say apple is right and see Apple loose unreal engine gaming on their platform.... That be the best thing that could happen against Apple so I'm all for it... Again let the free market free.... Apple is gone in that world...
  • I am glad, Microsoft got behind Epic and I hope more developers follow. This is no different, than when the government got involved and deemed MS a monopoly with it's Office suite and Internet explorer. Hopefully this leads to a change and Google is also, told to do the same.
  • I would say its quite a bit different: 1.) the U.S. government started an anti-trust suit 2.) I would say the vast majority of people would say Microsoft enjoyed a monopoly as to PC, there were very few other computer type devices and no mobile devices really 3.) the Court actually ordered a breakup of Microsoft, but things were reversed in part and a settlement basically entailed an agreed upon penalty. - Apple doesn't even have a majority of mobile market share let alone a big percentage of computer type market share
    - The fact that Epic had to sue multiple companies actually kind of proves there really is competition
    - Epic isn't really an Apple competitor in the stance that they are in the mobile market or general computer market as a provider.
    - Apple's policy actually would make it easier for new mobile devices to actually be created if Epic was correct in that their policies are unjust. Microsoft was trying to kill competition on its own OS for its own software where they enjoyed probably a 90+ percent market share i.e. Netscape. Apple doesn't even have a Fortnite game even similar, and clearly all they want is a percentage based on their developer license... this is pretty typical for closed hardware manufacturers. For the record, you don't need a monopoly to engage in anti-trust behavior, but Epic kind of destroys its own weak case because they have licensing and licensing fees with Unreal Engine, Fortnite, and the Epic Store... under Epic's theory I guess those shouldn't exist either? This is what happens when you have a Rain Man (Sweeney) programmer running a business - unable to understand basic context and reasoning. Basically, Sweeney is saying licensing should not exist and everything should be open, yet Epic doesn't operate like this and for good reason.
  • Daisy, I'm generally with you on the legal analysis of this, but there's also the business side: clearly, Apple doesn't actually want all Unreal Engine games removed from the App Store. They just want their 30% of their sales. However, Epic may conclude, and Microsoft's position here (probably based on analysis of what happens for Project Xcloud if Apple is forced to modify the rules for games on the App Store) gives them a more solid footing, that they can extract a more favorable position from Apple if they threaten to take their ball and go home, along with all the developers who rely on Unreal. So what happens if Unreal is not allowed on the App Store (whether by Apple or Epic's choice)? A bunch of developers go to Unity, but in the interim, a ton of games come off the App Store. Apple loses customers, as the gaming segment of iOS users jump to Android... Maybe Apple folds and give Epic special discounts, maybe they don't. Brinksmanship at its finest. :-) In any case, to start the process Epic did what it had to do. It's just good PR to initiate the legal suit, even if their legal case is weak. Their real fight is not a legal one.
  • Nice post, pretty much agree with some of that - its a difficult decision. I would imagine Apple is just going by their agreements and saying we need to be as equal as possible under the agreement. If they bend to Epic than there will be another one and another. Microsoft has lost all the consumer products i.e. closed hardware type system, they're simply now attacking the companies they couldn't beat so they can get their services on them. I think Epic thought all these silly Fortnite people were going to rise up and somehow change licensing, it just isn't going to happen.
  • It is not about another one then another one. Why doesn't apple mention fixed rules for special discount? Why keep it under "discretion of apple"? 😑 They could come out and say ok we will give 85-15 model of revenue to any publisher who make $3bn+ in cumulative sales within the app store that means if they touch that mark after that they can have 85-15 instead of 70-30 model. It was just example apple could set it even higher. But not having fixed rule is apple's problem not publishers'. TBH "discretion of apple" is just a front for anti-competitive practices. So that they can just outright reject Netflix, Spotify for same benefits. Blocking xcloud is the best example of this. The computing world is changing apple is leading the arm race so they don't want to lose the gaming battle again against MS who practically owns the whole current gaming platform. It is about control for apple. Basically everything they do is about control not money. If you have control you automatically get the money. If xcloud like service comes up into the app store that means it would also be available to ipad too, later in Macs on arm, Macs on x86, basically apple would never ever be able to make their own apple arcade any more than a kids game service. They don't want that image/sentiment in the public. They don't want to get ridiculed in the tech press when it comes to apple arcade service. If xcloud like services are available on ipad like devices then from Day 1 apple arcade will be obsolete already.
  • For the people like you who don't know what the gripe is actually about. Why Epic and others are not happy with apple. Read below: It is not about the cut percentage. It is about principle and ethics.
    Let me tell you the policy of app store 1. Any kind of purchases whether it is in-app or direct purchase "must" use apple payment gateway and pay 30% cut.
    2. You have choice of not using this option but... but...... but..... you can't tell users that there is "paid" service that you provide or users can "pay" for "subscription" from "outside" the app store on something like developers own website or any other method dev want to use. You can't mention this above fact in the app anywhere. That means let's say I develop an app it is video streaming service that charges $5/month. If I don't use apple payment gateway then there are some keywords I can't use anywhere in the app some of them are payment, pay, purchase, subscription, pro features, paid version, price or similar keywords/sentences that in anyway hints at the fact that there is a premium service for my app. This is TBH outright bullying especially when your iphones/ipads don't allow side loading of apps. If they allow side loading this whole restriction is fine. 3. App store also doesn't allow multiple payment options too. Basically all of them "must" use apple payment gateway and pay 30% cut no matter what. 4. Apple also doesn't have fixed rules regarding giving benefit of that 15% cut. It is written "discretion to apple" which is a lot of BS and disguise for anti-competitive practices. Why apple terms doesn't define fixed policy for this 15% cut instead of 30% maybe something like $3bn in cumulative sales from app store. Not setting fixed rule for giving benefit is only because so that they can force their competition out which is the definition of "anti-competitive" practices. They gave the benefit to amazon because amazon is also doing its e-commerce hence not a competition of apple. But why won't they would give 15% to Spotify, or Netflix they not small companies Netflix is already over $200bn company not to mention the mkt share in streaming space. Still not giving them 15% because "discretion of apple" is a lot of BS at best. Now the biggest gripe is why a company like Epic, Amazon, Facebook, Spotify, Netflix which already pay millions to maintain their own payment gateways to process transactions on websites where they pay the cut already or incur expenses already depending upon the deal they have? Let's take a scenario
    Netflix pays Stripe(a payment processor) $500m in fixed fees to process all their US transactions. Big brands which have very large user base transacting a lot get deals like this. Why should Netflix be forced to use apple payment gateway and pay them 30% or 15% in case of large corporations like Netflix which comes out to be >$800m alone to apple? This is clearly not fair. Netflix is being forced to burn money unnecessarily when they don't need apple's payment gateway as they already spend on their own. In the end it is about principle and ethics rather than money. So apple sheep should support epic over this already(BTW I don't agree with Epic everywhere in their counter argument) . As much as I commend apple for their privacy side of the things but this is outright unfair and unethical at best. Small devs already use apple payment gateways because they can't afford to setup their own payment gateways so 30% cut and removing the management handling of funds etc is worth that 30% for small to medium scale devs but not for large corporations as they are already spending millions to maintain payment gateways on their websites and other platforms. My take is : You don't want people to use their own payment processor? Fine.
    You want all transactions to go through apple payment gateway and pay 30% cut? Fine.
    Not allowing devs/companies to mention other methods of payments basically informing within the app itself about paid service? Unfair bullying and monopoly abuse at best. PS: Yes the above restrictions doesn't exist on play store if you were wondering. There are lot of apps which maintain their own payment methods.
  • No problem- Just stick with Android. Problem solved. All the access to 3rd party that you'd ever want and more.
  • Apple worked so tirelessly to build up their perfect image, its so glorious to see it so systematically exposed week after week. If any person actually supports the App Store model and how apple wields it's "non-monopoly" power I literally laugh in your face, sir.
  • Apple hates it when someone makes them look bad. Looks like they've dug in their heels against Epic.
  • Exactly right. That image and sheep's defending apple is also the reason for this abuse. They know that there would be enough people who would support us without even knowing the actual thing. Some other company does something "it is outrageous not at all feasible bla bla bla" if apple does it, "that was necessary, we need to be progressive, that was fine it is just tech progressing, Bla bla bla"
    Thing is that apple has these so called defenders of their brand. These people would defend apple to death because they want some "elite" brand like this otherwise how would they show off that they are "Rich" or "sophisticated" etc etc etc. They just like apple because if is easy to buy iPhone and fit into the group of already existing sheeps. 😑 I'm not saying apple is bad at its products or anything they are good they make one of the best devices have proper ecosystem etc. I'm mostly talking about the bias people have when it comes to apple as brand. This bias is the reason Epic had to blow this legal battle out in the open so that more and more people know about it. That's the whole point.
  • I also vaguely remember reading that the contracts game devs sign to put games on Apple Arcade prevent them from porting said games to Android.
  • Yes it is true. Any apple arcade game must be "apple ecosystem only" otherwise you are not eligible for arcade umbrella.
  • Seriously I still don't understand at least 70% of the customer base apple has... They have close to no reason to buy apple products.... It's just bad financial management... Design is unoriginal spec is questionable at that price ecosystem too... Beside brand equity Apple has nothing truly exceptional... And hasn't have anything of the sort almost since job is dead.... And they have no real solid business besides mass customer market which can change in a matter of years if not month... Especially in the current economic and financial climate.... Again Apple is nothing more than a clay giant compared to almost any other GAFAM or BATX member... They should be gone with their boring unimaginative mktg machine of the past few years.... And at the next paradigm shift they will be if nothing change internally and fast.... The true boring company right there...
  • JMV83, I don't use any Apple products on a daily basis (have a bunch for app testing), but Apple's niche in the tech ecosystem is simplicity. They remove features some of us like to provide a cleaner, simpler UX. That's not for me (I don't even like a car with an automatic transmission -- I'll chose what gear I'm in, thank you very much), but I can respect that there is a significant segment of the market willing to pay a premium for simple stuff that generally works with no configuration needed. Apple serves its customers well. That merits respect. At the same time, I respect Epic's business gamble here (that's what this is, I don't think they have much of a case legally, unless this gets caught up in the political whirlwind around Apple and anti-trust, which is entirely possible). It's interesting and unclear to me who will blink first.
  • I'm not really an apple user, although Mac's in the 80s were awesome. 1. Simplicity
    2. Early innovation (during the Job years)
    3. Just works
    4. Good customer support with local stores
    5. Nice design
    6. Security
    7. Now the go to device for business/enterprise
    8. Legacy to a degree (not in the same way win32), meaning developers understand the environment People and businesses are not going to just swap back and forth, kind of like the reason why enterprise still uses Windows.
  • If you want to compare an iOS based device with Android the choice is clear(coming from an Android fan) iOS
    5 years of OS upgrades/security updates. Little fragmentation.
    Security exploits patched fairly quickly.
    Faster and better overall performance with very little to no lag.
    All third party apps run better on iOS devices.
    Tight integration of hardware/software. Android
    Up to 2-3 years of OS upgrades/security updates highly dependent on the manufacturer. Massive fragmentation.
    Security exploits not always patched/if ever depending on the manufacturer
    Phones tend to slow down/lag within a year of purchase
    third party app features/performance can be a mixed bag.
    More open ecosystem/customization.
  • Fsir enough. Apple are scumbags.
  • I hope epic loses this battle.
  • Why is that? You really think Epic are the bad guys here? Because they're no saints themselves, but they are clearly the lesser evil among the two.
  • Epic ARE the bad guys here. They deliberately violated their contract, in a weird attempt to make some “point”. They are going to lose this case. Period.
  • For the people like you who don't know what the gripe is actually about. Why Epic and others are not happy with apple. Read below: It is not about the cut percentage. It is about principle and ethics.
    Let me tell you the policy of app store 1. Any kind of purchases whether it is in-app or direct purchase "must" use apple payment gateway and pay 30% cut.
    2. You have choice of not using this option but... but...... but..... you can't tell users that there is "paid" service that you provide or users can "pay" for "subscription" from "outside" the app store on something like developers own website or any other method dev want to use. You can't mention this above fact in the app anywhere. That means let's say I develop an app it is video streaming service that charges $5/month. If I don't use apple payment gateway then there are some keywords I can't use anywhere in the app some of them are payment, pay, purchase, subscription, pro features, paid version, price or similar keywords/sentences that in anyway hints at the fact that there is a premium service for my app. This is TBH outright bullying especially when your iphones/ipads don't allow side loading of apps. If they allow side loading this whole restriction is fine. 3. App store also doesn't allow multiple payment options too. Basically all of them "must" use apple payment gateway and pay 30% cut no matter what. 4. Apple also doesn't have fixed rules regarding giving benefit of that 15% cut. It is written "discretion to apple" which is a lot of BS and disguise for anti-competitive practices. Why apple terms doesn't define fixed policy for this 15% cut instead of 30% maybe something like $3bn in cumulative sales from app store. Not setting fixed rule for giving benefit is only because so that they can force their competition out which is the definition of "anti-competitive" practices. They gave the benefit to amazon because amazon is also doing its e-commerce hence not a competition of apple. But why won't they would give 15% to Spotify, or Netflix they not small companies Netflix is already over $200bn company not to mention the mkt share in streaming space. Still not giving them 15% because "discretion of apple" is a lot of BS at best. Now the biggest gripe is why a company like Epic, Amazon, Facebook, Spotify, Netflix which already pay millions to maintain their own payment gateways to process transactions on websites where they pay the cut already or incur expenses already depending upon the deal they have? Let's take a scenario
    Netflix pays Stripe(a payment processor) $500m in fixed fees to process all their US transactions. Big brands which have very large user base transacting a lot get deals like this. Why should Netflix be forced to use apple payment gateway and pay them 30% or 15% in case of large corporations like Netflix which comes out to be >$800m alone to apple? This is clearly not fair. Netflix is being forced to burn money unnecessarily when they don't need apple's payment gateway as they already spend on their own. In the end it is about principle and ethics rather than money. So apple sheep should support epic over this already(BTW I don't agree with Epic everywhere in their counter argument) . As much as I commend apple for their privacy side of the things but this is outright unfair and unethical at best. Small devs already use apple payment gateways because they can't afford to setup their own payment gateways so 30% cut and removing the management handling of funds etc is worth that 30% for small to medium scale devs but not for large corporations as they are already spending millions to maintain payment gateways on their websites and other platforms. My take is : You don't want people to use their own payment processor? Fine.
    You want all transactions to go through apple payment gateway and pay 30% cut? Fine.
    Not allowing devs/companies to mention other methods of payments basically informing within the app itself about paid service? Unfair bullying and monopoly abuse at best. PS: Yes the above restrictions doesn't exist on play store if you were wondering. There are lot of apps which maintain their own payment methods.
  • Hell, Netflix and Spotify should join the fight too. How would Apple users like their devices without Netflix access?
  • Somehow, I don’t think Spotify or Netflix are going write off 50% of their customers. Besides, I would love to see Netflix try to cut off Apple users. Talk about “abusing your market position”. They would be slapped down. Hard.
  • “ It is about principle and ethics.” Lol, sure it is. You think that deliberately violating the terms of a contract - that you willingly signed, BTW - shows “principles and ethics”? Good luck making that claim to the judge. This is about Epic having a public hissy fit. If you don’t like the terms of a contract, then don’t sign it. If you want to change the terms, then you negotiate BEFORE you sign the contract. This is not going to end well for Epic. No one will ever be willing to sign contracts with Epic in the future. At least not until the person in charge grows up, and learns the “principles and ethics” of honoring your legal commitments.