Apple-Epic clash could be a boon for Unity, other game engines

A long legal fight with Apple Inc. could cost Epic Games Inc. customers in the form of third-party developers who defect to rival companies’ game-building technology -- particularly Unity.

In a court filing Monday, Epic said Apple is threatening to cut off its access to certain iOS and Mac tools, which would mean the game company can no longer distribute its Unreal Engine to developers who use the product to create graphics, sounds, animation and other features within games.

“If the Unreal Engine can no longer support Apple platforms, the software developers that use it will be forced to use alternatives,” Epic said in the filing. “The damage to Epic’s ongoing business and to its reputation and trust with its customers will be unquantifiable and irreparable.”

The Unreal Engine, used to make scores of games, such as Fortnite and Mortal Combat, faces “an existential threat,” Epic said.

Epic is challenging the fees Apple levies on companies that do business through its App Store. Games must bill their subscriptions and in-app-purchases through Apple’s billing system, which charges up to a 30% fee. Last week, Epic began offering customers a way to directly buy items for Fortnite and circumvent the fees. Hours later, Apple pulled the app. Alphabet Inc.’s Google followed suit later in the day, removing Fortnite from its Play app store.

Unity would be the main alternative to Unreal if Apple bans the latter, said Doug Clinton, managing partner at Loup Ventures, an investor in Unity. “I still think the odds that Apple actually goes through with that option are low for now,” he said.

Block Fixes

Apple could also effectively block Epic’s ability to provide bug fixes and security patches to its existing version of Unreal Engine for iOS. If it’s not updated for a long time, developers could opt to use rival engines, like Unity, said Danny Lingman, professor of game development at Algonquin College in Ontario.

“Given that a significant amount of Epic’s revenue comes from licensing the use of its engine, this loss of revenue would likely lead to a downward spiral of less new features being released for the engine, and then less developers choosing to use that platform due to the lack of advancements,” Lingman said.

Unity is owned by closely held Unity Technologies, which says its engine powers more than 53% of 1,000 top-grossing mobile games globally.

“Epic knew that what they were doing was against Apple developer rules, and opted to make a stand,” Lingman said. “I’m hoping that this isn’t going to be a replay of Custer’s last stand.”