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epic states there’s an app store payment lockout — but apple sees friction


Epic states there’s an App Store payment lockout — but Apple sees friction

In Epic’s Fortnite, “cross-wallet” indicates you can purchase in-game currency (known as V-Bucks) with real money on one device, then spend it on a different device. The latter platform doesn’t get a cut of your initial, non-virtual financial transaction, which is why Nintendo and Sony don’t support cross-wallet access on the Switch and PlayStation.


Apple upheld cross-wallet play before banning Fortnite last year — and on the trial’s subsequent day, that fact became a genuine pitfall for Epic. Apple continued a long cross-examination of Epic CEO Tim Sweeney, whose long stretches of testimony included a digression on whether Fortnite counts as an open metaverse or basically a big free-to-play game that has concerts. (Judge Yvonne Gonzalez Rogers suggested, and Sweeney concurred, that “the most readily acceptable analogy” maybe Steven Spielberg’s Ready Player One.)




Two witnesses followed Sweeney from outside Epic: the author of an iOS yoga app, followed by the product manager for Nvidia’s cloud gaming service. All argued that Apple’s firmly managed App Store forced customers to utilize clunky workarounds. Meanwhile, Apple argued that the workarounds weren’t necessarily worse — simply different.


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Fortnite was kicked off the App Store for adding its own V-Bucks purchasing system just inside the app, violating Apple’s restrictions on in-app payment processing. However, as Apple’s lawyers pointed out today, Epic had another option for selling V-Bucks on iOS. The company simply needed to sell them straightforwardly through its website, which users could visit through the iPhone or iPad Safari browser without Apple getting any kind of commission. At the point when they booted up Fortnite on iOS, their V-Bucks would be waiting.

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Judge Yvonne Gonzalez Rogers discovered this argument sufficiently compelling to follow up on. For what reason couldn’t iPhone users buy V-Bucks through Safari, she asked, before Fortnite’s ban in August? Epic CEO Tim Sweeney admitted that Epic might have added the feature — yet “it wasn’t a very attractive option for our customers,” Sweeney told her.

If someone wants to buy V-Bucks, he said, there’s a decent chance they’re already looking at a thing in Fortnite. “To set Fortnite aside and pull out some device, browse to a website, log in, make a transaction there, it’s extremely inconvenient.” to put it plainly, “there’s a huge amount of payment processing and customer friction associated with selling a user of an app an item outside of that app.”


Yet, after asking how old most Fortnite players were, Rogers suggested that a little friction may be something to be thankful for. “Why is it so inconvenient that someone can’t make what I would call, as a parent, an impulse purchase?” she asked. “Isn’t that a responsible way to deal with a young client base?” If people can buy V-Bucks and then switch platforms, “what you’re really asking for is the ability to have impulse purchases.”

Sweeney said Fortnite had parental controls, yet he didn’t debate Rogers’ basic point. “Yes. Customer convenience is a huge factor in this. People are much more likely to make a purchase if it’s easy to make a purchase,” he said.

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A similar question arose with a later witness. Benjamin Simon is the CEO of Yoga Buddhi, which runs an iOS app called Down Dog. (Sadly, no one in court thought to make an Updog joke.) Yoga Buddhi offers a big discount for signing up outside the iOS app. And dissimilar to Epic, it’s fine sending people to a website. Simon declares, however, that Apple makes finding that website as hard as conceivable.


Simon says that Apple rejected several versions of Down Dog that reference getting a discount somewhere else. At this moment, about half the iOS user base seemingly recompenses a premium to sign up through the App Store. For comparison, just 10% of Android users pay a similar premium through the Play Store because Google doesn’t have the same restrictions.


Simon acknowledged that Yoga Buddhi could reach customers via other methods like email and help them switch to the discounted version. The issue, again, is friction. “We’re limited in our ability to communicate with our customers from within our product,” he complained.


From Apple’s perspective, the two executives are making a big deal out of a small inconvenience. Customers may have to work a little harder to save money, yet that doesn’t equate to a monopolistic lockdown. And while Sweeney depicts Fortnite as a lofty metaverse, Rogers put it in a different context of “freemium” gaming — an industry whose powerful, frictionless gaming loops are regularly reprimanded as addictive and predatory.


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Arguably, however, that every criticism bolsters Epic’s claims. In the past years, regulators and researchers have realized increasing concern over subtle design choices in apps — like confetti animation, infinite scrolling, and tweaks to the sorting algorithms on social networks. There’s a far-flung consensus that small nudges can substantially increase how much people invest in digital platforms. Yet, Epic may have to struggle harder to convince a court this investment is certifiably not a bad thing.

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