Microsoft warns that Apple banning Epic would threaten its future game lineup

The hits just don't stop coming for Apple. Microsoft today filed a statement of support in Epic's lawsuit against Apple over its treatment of independent developers, saying that ensuring Epic has access to the latest Apple technology is the right thing for the industry.

Other companies including Facebook and Wordpress developer Automattic have also complained about Apple's tough behavior in recent weeks.

Apple has threatened to cut off Epic's ability to publish apps and access developer tools for iOS and macOS. Doing so would mean that Epic could no longer release new versions of its popular Unreal Engine, which powers many popular games including Fortnite and Mortal Kombat. Crucially for Microsoft, its Forza series uses the Unreal Engine, so development of the racing game would be put at risk.

The stakes are real — “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,” wrote Kevin Gammill, Microsoft’s general manager for Gaming Developer Experiences, in the company’s statement.

The tussle between Apple and Epic began after the latter released an update to Fortnite that would allow customers to temporarily buy in-game items directly from Epic's website, bypassing Apple's payment system and the 30 percent cut it takes on in-app purchases. The move was seen as an intentional step to start a battle with Apple over the control it wields in the App Store, where developers are beholden to its demands and, should they not comply, risk being locked out of the only marketplace where iOS users can download apps.

Soon after Apple a made goodwill statement that it was willing to negotiate with Epic, the company apparently pressed its thumb by telling Epic that it would cut off the company's access to all developer tools unless it released an update to Fortnite that restores in-app purchases.

Holding its ground — Such a threat highlights the power Apple has over other businesses, an issue lawmakers have been investigating. CEO Tim Cook recently appeared in front of Congress for a hearing on whether or not major tech companies are stifling open competition with their large but closed platforms. By the looks of it, Apple isn't too worried.

“Because iOS is a large and growing market for games, Apple’s discontinuation of Unreal Engine’s ability to support iOS will be a material disadvantage for the Unreal Engine in future decisions by Microsoft and other game creators as to the choice of an engine for new games.”

Anticompetitive practices — Critics of Apple say that it's harming an open marketplace of ideas by charging high fees and blocking innovative ideas under its arbitrary and sometimes capricious rule system. Since iOS doesn't allow users to install apps from anywhere else, Apple essentially gets to decide for itself which ideas fly and which do not. Even when it does allow certain apps, like music streaming services, it sometimes releases its own competitive versions that aren't subject to the same fees, thereby giving them preferential treatment from day one.

It's illegal under U.S. law for businesses to behave in ways that reduce competition, increase prices, and lead to less innovation. Blocking Epic's access to developer tools is retribution for cutting it out of in-app fees that inherently drive up the price of games because Epic cannot allow its games to be downloaded from anywhere else. If a competitive app store were available with lower fees, Apple might be driven to compete harder. But it has no incentive to do anything but make demands since iOS holds more than 50 percent of the U.S. smartphone market. It says its rules are intended to protect users from malicious apps, but on macOS it allows users to download apps from anywhere.

Apple has said that services revenue — including App Store fees — are a crucial piece of its future revenue growth. Gaming is typically the top-grossing category in terms of in-app sales.