A headline item of Epic’s lawsuit against Apple showed how the gaming colossus vastly overestimated the potential of their competitive events.
Fortnite World Cup didn’t bring in what Epic wanted it to
It’s not often we get a glimpse into the finances of Epic Games. Since the company isn’t on the stock market, they have no obligation to share their inner workings with the curious public. However, their lawsuit against Apple inevitably led to the disclosure of certain interesting tidbits, and for those interested in Fortnite esports, the findings may serve as a disappointment.
The documents submitted to the United States District Court for the Northern District of California suggest that Epic Games missed their revenue targets for 2019 by $390 million (they still made over $4 billion so don’t feel bad for them), mainly because of how Fortnite’s esports scene failed to live up to expectations.
July 2019’s Fortnite World Cup had a $30 million prize pool, with a cool $100 mil awarded over the year. In contrast, Epic Games only offered $17 million for the entirety of the following year, which they slightly bumped up to $20 million by 2021. The company has also stated that there are no plans in place for a live World Cup event for the year, no doubt at least partially due to the still unclear public health situation when it comes to large gatherings.
Epic vs Apple: what is going on?
The clash between the giant tech companies revolves around the App Store. Epic Games alleges that Apple has an effective monopoly on the mobile gaming space by forcing developers to use the App Store to download iPhone and iPad games, and, in turn, take a large cut of all transactions.
Apple, of course, suggests in their response that games can be downloaded on many other platforms and they therefore don’t have a monopoly. Legal analysis suggests that this specific antitrust case will likely come down to which company’s definition of “the market” will be accepted by the court.
If the market is “iOS apps”, Epic’s argument will carry the day. There is actual precedent to this, with the Supreme Court noting in 1992 with regards to Kodak that “one brand of a product can constitute a separate market”. Apple’s hoping that this wouldn’t be the approach taken by the US judiciary almost twenty years down the line.
