Epic v Apple is not about a game

If you aren't a video gamer or don't have children that play video games (is that even possible today?) then you might not be aware of the current legal battle between game giant Epic Games and technology behemoth, Apple.

And you might think, why should I be aware? It's a game, so what? Let them fight.

Well, here's the thing; at the heart of this legal battle are concepts and definitions that could have far-ranging consequences across industries. Whether you're a producer of technology or a provider of applications that facilitate your business, you may want to pay close attention to some of the arguments being made in this epic (pun intended) legal battle, especially given that the defendant is Apple, whose app store is front and center in this fight.

There are questions rising over the definition of platform, of the nature of app stores and how they categorize software, and over the business model for microtransactions that today fuel gaming across every category - from Candy Crush to Fortnite.

Who owns the right to execute a microtransaction? This is the question that basically kicked off this epic battle in 2020, in which Epic claimed the right to execute microtransactions lies within their domain and implemented the ability - effectively bypassing Apple's payment processing system. Apple disagreed and promptly removed the title from its AppStore citing a breach of terms.

This argument is important. The global microtransactions market is mostly centered on games today, but its prevalence is expected to spur new markets in the near term. Microtransactions primarily cover downloadable (digital) content known more generally as DLC. The ability to purchase a single filter for photo and video apps, for example, is a kind of microtransaction that exists outside gaming, but still falls in the 'entertainment' market.

Another example is the configuration that defines the behavior of LED lights. Today, that DLC is generally free and shared by a community. But if it were to be monetized, they would likely be monetized through microtransactions - periodic and small purchases made from within the app that controls the LED lights locally.

The potential for microtransactions then, particularly in the ecosystem-driven software world, are significant. Future business models based on microtransactions may be impacted by the outcome of the Epic v Apple case.

A potentially broader impact than the future of microtransactions is the future of the Apple platform and its control over apps through the AppStore. Changes to iOS with respect to permissions and tracking through apps have brought Epic symbolic support from across the industry. Facebook and Spotify voiced their support for Epic, while just this year Valve refused to help Apple make its arguments by stonewalling requests for information Apple felt was relevant to making its case against Epic.

It's not just about a game. In fact, I'd argue it was never about a game at all. It's always been all about business. The future of microtransactions and, quite possible, the way Apple operates its AppStore, may be impacted by the outcome of this case. And if the AppStore is impacted, you can be sure there will be ramifications to digital marketplaces and ecosystems in the software space.

And that's why we should pay attention to the general arguments and the outcome of Epic v Apple, even if we don't dive into the reason a banana in a suit became a central argument in a court of law this week.