• Market Crumbs

Epic Games Takes On Apple and Google


Image via Joshua Hoehne on Unsplash

It was just less than two weeks ago that Epic Games, the company behind the wildly popular game Fortnite, raised $1.78 billion at a $17.3 billion valuation. The funding round made Epic the fifth-most valuable technology startup in the U.S., according to CB Insights.


As Epic's dominance in the gaming industry has skyrocketed over the last few years, the company and its CEO Tim Sweeney has repeatedly been at odds with Apple and Google over the 30% revenue cut that the two companies take for each transaction in their app stores. Epic decided it has had enough and last week implemented a direct payment method to bypass giving a cut to the tech giants and things have gone south very quickly ever since.


Epic gave users the option to purchase V-Bucks, which is the in-game currency for Fortnite, for $7.99 through Epic compared to the $9.99 it costs in the App Store. Apple, and then Google a few hours later, pulled Fortnite from their app stores, arguing the move by Epic violated their policies.


Epic responded to the moves by Apple and Google by almost immediately filing a lawsuit against each company.


"Apple is bigger, more powerful, more entrenched and more pernicious than monopolies of yesteryear," Epic's suit read. "Apple's size and reach far exceeds that of any technology monopolist in history."


In regards to Google, Epic's suit against them didn't hold back either.


"In 1998, Google was founded as an exciting young company with a unique motto: 'Don't Be Evil,'" the suit read. "Twenty-two years later, Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolize."


Epic even followed its lawsuit by trolling Apple with its own twist on Apple's infamous "1984" commercial. The commercial shows a Fortnite fighter throwing a Unicorn at a character resembling Apple and its CEO Tim Cook as it talks about its control of the system.


Tech companies such as Match Group, Spotify and Facebook which have had their own issues with the app stores rallied behind Epic. The hashtag #FreeFortnite trended on Twitter as Epic's own users also joined the company in support.


"Tim Sweeney and everybody at Epic, we stand with you and thank you for standing up for something bigger than Fortnite here that helps us out," YouTuber "thatdenverguy" posted.


Epic has billions of reasons to eliminate the fees it pays to Apple and Google. 70% of Fortnite's users have made in-app purchases as they've each spent an average of $85. Fortnite surpassed 250 million users in March 2009 while revenue for the game was reportedly $2.4 billion in 2018.


At a time when the tech giants are increasingly facing pressure from governments and regulators, it will be fun to watch Epic, which has become one of the hottest companies in the world, take on Apple and Google as it gains support from other companies and its own users.


Leftover Crumbs

  • TikTok has 90 days. U.S. President Donald Trump has signed an executive order that gives ByteDance 90 days to sell or spin off its U.S. TikTok business. The order gives TikTok twice the amount of time than Trump's previous executive order, which gave ByteDance 45 days. TikTok is being told to destroy all of its data on U.S. users from its servers and notify the Committee on Foreign Investment in the United States (CFIUS) once it has done so. "There is credible evidence that leads me to believe that ByteDance ... might take action that threatens to impair the national security of the United States," Trump's order said.

  • DOJ probes lunar contract. A criminal probe has been opened by the U.S. Justice Department over concerns NASA's former head of human spaceflight gave Boeing improper guidance during a lunar-lander contract competition. Subpoenas were sent for violations of federal procurement laws to Boeing, NASA and Doug Loverro, who led the program at NASA before suddenly quitting in May. The probe was opened in June and is focusing on communications between Loverro and Boeing space executive Jim Chilton during a blackout period for the contract negotiations in January. "It is clear that I made a mistake in that choice for which I alone must bear the consequences," Loverro said at the time he resigned without clarifying.

  • Retailers fight counterfeits. The Retail Industry Leaders Association (RILA), which includes companies such as Target and Walmart, has teamed up with a handful if industry groups to form The Buy Safe America Coalition to fight the sale of counterfeit of goods online. The group plans to support legislation that will place tighter scrutiny on products that appear in online marketplaces such as Amazon. "This is a problem that has festered unchecked for too long," RILA senior EVP for public affairs Michael Hanson said. "The evidence is overwhelming that these illegitimate sales are happening on dominant online marketplaces, yet big tech platforms, like Amazon, have done very little to crack down on these sales."

  • Impossible Foods raises more money. Impossible Foods has raised another $200 million at a $4 billion valuation as the round brings Impossible Foods' total funding to $1.5 billion. The company will use the funds to expand research into pork, steak and milk as well as expand internationally and increase production capacity. "Impossible Foods needs to sustain our exponential growth in production and sales, and invest significantly in R&D," Impossible Foods' CEO Dr. Patrick O. Brown said. "Our investors believe in our mission to transform the global food system — and they recognize an extraordinary economic opportunity."

  • Lucky Brand finds a buyer. Lucky Brand has been acquired out of bankruptcy for $140.1 million by mall owner Simon Property Group and apparel licensing company Authentic Brands Group. The two formed a venture named "Sparc" to acquire Lucky Brand and operate the retailer's 175 stores in North America and online business. The venture said it would negotiate with landlords to keep "key stores" open. Lucky Brand filed for Chapter 11 bankruptcy protection in July.