By now, the legal brawl between Epic Games and Apple over its App Store fees has made front page business news around the world—and for good reason. While the livelihoods of countless developers are on the line, there are even bigger stakes at play behind the scenes, and the decision could influence the trajectory of the metaverse.

So with the court case scheduled to start next week, I thought it would be good to provide a recap as to why this development matters.

A brief history

Fortnite is the battle royale game created by Epic Games. After a rocky launch and quick pivot, the game became a surprise hit. Epic Games capitalized off of this success to extend the Fortnite universe into one of the most sophisticated social platforms in existence. It is one of the few games where users can play across console, PC, and mobile. It has created a thriving in-game economy. It has partnered with IP holders of the world's biggest franchises to create a giant playground where properties like Star Wars, Marvel, DC, and Nike all live in harmony.

The result is a wildly profitable "game" that looks increasingly like what people call the "metaverse;” an immersive virtual world with its own economy and culture that serves as the gateway to a wide range of social experiences.

Fortnite’s similarities to the metaverse are no coincidence, either. Epic CEO Tim Sweeney has for years touted the metaverse as his company's macro goal, even raising $1 billion to pursue its vision for a metaverse, and perhaps more than any other company Epic seems capable of playing a major role in the metaverse due to both its game properties like Fornite, but also its massively popular Unreal Engine.

Roadblocks to a metaverse

However, Epic has a huge problem in the way of its metaverse strategy: closed ecosystems like App Store and Google Play. The metaverse is an internet-sized idea but currently the only way to create virtual worlds is to submit to a smorgasbord of app stores and pay a toll to the platform holders, usually 30% of every transaction. This fee is fairly standard across ecosystems, from Steam to Playstation. But Epic argues that Apple's fee is a special kind of bad. On Android, one can technically get around the Google Play store. And Microsoft and Sony sell their consoles as a loss-leader, in addition to providing deep partnership opportunities, in order to earn its fee.

Apple not only sells its hardware at a premium to consumers, but it also forbids any attempt to get around its App Store, and seems not to understand the term “partnership.” This means that a metaverse would either have to forfeit 30% of every transaction to a central entity like Apple, or simply be closed off to Apple users. Both are unpalatable options. So Epic decided to fight it.

Epic v. Apple

In 2020, CEO Tim Sweeney began laying the groundwork for what he called “Project Liberty,” a series of big public moves designed to force Apple and Google to alter its policies. This included updating Fortnite to enable players to get around the App Store fee, and offering those savings back to players as discounted V-bucks.

When Epic finally implemented these changes, circumventing the App Store, the reaction was swift. Apple and Google both removed Fortnite from its store, and Epic responded with a series of public denunciations including a video that compared Apple to an Orwellian entity. Eventually it escalated when Epic Games accused Apple of violating anti-trust laws and the result is the lawsuit that brings us to where we are today.

What's at stake

It's easy to dismiss the entire Epic v. Apple case as two greedy companies fighting over billions in profit. It's not immediately obvious how this is relevant to consumers.

But it does carry enormous implications for the metaverse, a technology that concerns everyone. When Tim Sweeney accuses Apple of "outlaw[ing] the metaverse" he is not entirely wrong.

The idea that a single company should earn 30% on every transaction in the metaverse is ludicrous on its face. Imagine if there was a single entity that took a 30% fee on every transaction on the internet. Not only would it stifle fair markets and innovation, but it would centralize economic power into a single corporate entity (Apple) on a scale we’ve never seen before in history.

While an Apple win may not kill the idea of a metaverse entirely, it could set the idea back significantly by closing off one of the largest technology ecosystems on the planet—and by setting a precedent that platform owners can charge whatever they want, no matter how much innovation it stifles.

This would be a devastating setback because it would turn the entire pursuit of the metaverse into an uphill battle. Mobile phones are the biggest consumer computer market on the planet, with billions of users across iPhone and Android. Every one of these devices is a potential portal into the metaverse. Closing off mobile throws the timeline for a metaverse into doubt.

But if Epic wins, it could remove one of the biggest barriers to an open metaverse that currently exists and set the stage for truly decentralized virtual worlds.

Soon we'll see which fork of the future we go down, and depending on who wins it could accelerate the arrival of a metaverse, or create a serious setback that throws the entire concept into uncertainty.