The Fortnite Fallout

Apple and Epic meet in court, making the collapse of a once-close relationship complete

- Olga Kharif and Mark Gurman

In 2011 when Apple Inc. Chief Executive Officer Tim Cook wanted to show off the first major product under his leadership—the iPhone 4S— the company invited Epic Games onto the stage. Mike Capps, Epic Games Inc.’s president at the time, made a quick joke about how much money his company’s games made from Apple devices. Then he helped run a demo of Infinity Blade II, designed to showcase both Epic’s new game and the power of the latest iPhone’s chip.

The event was a public demonstration of a close corporate relationship that has since disintegrated. On May 3 a federal court began hearing arguments in a trial centered on Epic’s claims that Apple extracts money from developers by abusing its market power, and Apple’s counterclaims that Epic breached its contract. On the first day of arguments, Epic said developers were “trapped” in Apple’s anti-competitive marketplace, while Apple accused Epic of waging a “fundamental assault” on a business model that had enriched many developers.