The Hotfix

Epic v. Apple reveals how one update could change the industry forever

The case could determine the future of digital storefronts.

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As the Epic Games v. Apple trial came to a close this week, Judge Yvonne Gonzalez Rogers was forced to explain a joke that didn’t land.

"I made a joke the other day about August 13, which is the date of the hotfix," he told her court. "Not everyone got the joke. I'm not promising to have this by August 13, but I want to get to this while the memory of the testimonies [and] the arguments are fresh. But we do have thousands and thousands of pages to review."

The term “hotfix” typically refers to a small software tweak rolled out without the fanfare of an update, but Epic’s release of the "Fortnite Mega Drop" update on August 13, 2020, was a declaration of war.

This single update could wind up being one of the most consequential in the history of the gaming and tech industries, and it highlights Epic Games' clear motive of bringing Apple to court. Still, whether Epic or Apple emerge victorious in the case, the potential consequences of the ruling for the rest of us are far less clear.

I'm Tomas Franzese, and this is The Hotfix, a column about ideas that could improve video games and the culture around them. Each week or so I'll explore a problem in gaming and how it could be solved. I'll talk to experts, offer my own analysis, and solicit you, the people I'm writing for, to sound off with your ideas. Send any and all feedback to 🎮

What happened? On iOS and Android, the August 2020 hotfix allowed players to circumvent the App Store and Google Play Store and use "Epic direct payment" to get V-Bucks at a 20 percent discount. It was a clear move to entice players away from those storefronts, and Apple subsequently kicked Fortnite off the App Store that day.

Epic Games had this video ready to go for when Fortnite got kicked off the App Store.

"Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users," an Apple representative told The Verge that same day. "As a result their Fortnite app has been removed from the store."

"Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services," the Apple rep explained.

Following this, Epic quickly rolled out a #FreeFortnite campaign across social media and the game itself, claimed the App Store was “anti-competitive,” and took Apple to court. This all led to multiple hearings and the court proceedings of recent weeks.

Why it matters: If Epic Games wins this trial, Apple's ecosystem will change forever. Epic Games will have the power to put its storefront on iPhones. That outcome would likely pave the way for similar lawsuits against platform holders like PlayStation. Additionally, it might cause Apple to take a lower cut of app revenue and mean that not all iPhone apps would need to be approved by Apple.

While it might be a positive change for app developers and publishers in the short term, Apple’s lawyers have argued it could open the door to safety and storefront curation issues. If any app can run on an Apple device, it’s more likely users could get scammed, hacked, or defrauded by sketchy actors. However, it’s important to remember that Apple makes tens of billions of dollars from the App Store each year and would likely prefer to keep it that way.

The precedent this verdict could set for all platforms that sell digital games is daunting. It could spawn competition on all kinds of connected devices and gaming consoles, even if Epic Games only intends to target Apple right now.

Epic Games is valued at $29 billion, even after Fortnite’s removal from the iOS App Store.

Epic Games

Epic stands to profit enormously from a favorable verdict by taking back that 30 percent cut from iOS and cutting out other intermediaries. During the trial, Judge Gonzalez Rogers appeared unmoved by the company’s ongoing attempts to shift the focus to its dedicated young fans.

"Epic is here because if relief is granted, they go from a multibillion-dollar company to a maybe-trillion-dollar company, who knows," Rogers said. "But they won't do it out of the kindness of their heart."

What's next? Epic Games' #FreeFortnite campaign might sound wholesome, but it’s worth remembering the company intentionally instigated this situation — likely because it could make more money if the Epic Games Store app were available on iOS and other platforms. Even though Apple's practices aren't developer-friendly, this hotfix demonstrates how Epic Games was still able to weaponize Fortnite’s massive userbase against Apple in court.

Epic is not the good guy here, and neither is Apple. In this case, Apple maintaining the status quo on the App Store and reforming its revenue split and developer relationship might be the best outcome.

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