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Epic Games wins support from 'Fortnite' gamers, firms on Apple standoff

[August 15, 2020] By Neha Malara and Akanksha Rana

(Reuters) - "Fortnite" creator Epic Games found support from its legions of gamers, Tinder-owner Match Group and Spotify for suing Apple and Google after the tech giants dropped the popular video game from their app stores for violating payment guidelines.

Epic Games started a social media campaign against the iPhone maker by releasing a parody of Apple's iconic "1984" commercial in its video game, and soon the hashtag "#FreeFortnite" was trending on Twitter.

Gamers with hundreds of thousands of YouTube followers took to the video-streaming platform and other social media platforms to share their thoughts on the situation and show their support.

"This is insane, we are watching actual history take place because we just don't see this anymore," a YouTuber with the handle "thatdenverguy", who has more than a million subscribers, said.

"Tim Sweeney and everybody at Epic, we stand with you and thank you for standing up for something bigger than Fortnite here that helps us out."

Google declined to comment, while Apple did not immediately respond to a request for comment on Friday.

In a statement on Thursday, Apple said "Fortnite" was removed because Epic had launched the payment feature with the "express intent of violating the App Store guidelines" after having had apps in the store for a decade.

Developers have long criticized Apple's commissions of between 15% and 30% on many App Store purchases, its prohibitions on courting customers for outside signs-ups, and what some developers see as an opaque and unpredictable app-vetting process.

Facebook <FB.O>, which has long been at odds with Apple over privacy issues, seized on the backlash to attack the commissions too. It said Apple had declined a request to waive the fees for the social network's new online events product, framing the decision as a refusal to assist small businesses.

Analysts believe users of Apple devices spend the most on gaming through their purchases on the App Store, which is the largest component of the company's services segment revenue of $46.3 billion per year.

"We are somewhat surprised that Epic is the one that has chosen to mount the challenge as Epic also operates a digital store where they take a cut of third-party sales," Evercore analyst Amit Daryanani said.

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The popular video game "Fortnite" by Epic Games is pictured on a screen in this picture illustration August 14, 2020. REUTERS/Brendan McDermid/Illustration

Apple, Google and Facebook are among major American technology companies that have come under fire for their alleged abuse of market power and just last month their chief executives were grilled by lawmakers in a five-hour long congressional hearing.

Companies, including music streaming service provider Spotify Technology SA <SPOT.N> and the owner of Hinge and other dating apps Match Group Inc <MTCH.O>, issued statements supporting Epic, with Match accusing Apple of using its "unfair policies to hurt consumers, app developers and entrepreneurs."

Gene Muster, a managing partner at Loup Ventures, said developer benefits have enabled the App Store to be a trusted source of software and content for nearly 1.4 billion active Apple devices.

"Lowering or eliminating the fee would jeopardize the integrity of the App Store," he added.

Launched in 2017, "Fortnite" has amassed a huge following among young gamers and its popularity has pushed the valuation of Epic Games to over $17 billion in a funding round earlier this year. The free-to-play battle-royal videogame competes with Tencent Holdings Ltd's <0700.HK> "PlayerUnknown's Battlegrounds".

In both Apple's App Store and Google's Play Store, "Fortnite" had about 2 million downloads in July 2020, according to mobile analytics firm SensorTower. But Apple users spent about $34 million, while Android users spent only $2 million, according to its data.

(Reporting by Neha Malara and Akanksha Rana in Bengaluru; Writing by Subrat Patnaik; Editing by Anil D'Silva, Sweta Singh and Daniel Wallis)

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