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Daily Crunch: Apple files countersuit against Epic

Apple strikes back at Epic Games, Android 11 is here and Microsoft announces a new stripped-down Xbox. This is your Daily Crunch for September 8, 2020.
The big story: Apple files countersuit against Epic
Apple has made the latest move in a legal battle against Epic Games, filing a lawsuit claiming that the company behind Fortnite is in breach of contract.

“Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store,” Apple wrote in its suit.
This follows Epic’s attempt in August to avoid Apple’s 30% App Store fee, which led to Apple removing Fortnite and eventually Epic from the App Store. (Accounts tied to Epic’s Unreal game engine have not been removed.) Epic then launched a lawsuit and a PR campaign against Apple, arguing that the company is abusing its market power.
The tech giants
Android 11 has arrived — Android 11 isn’t a radical departure, but there are a number of interesting new user-facing updates that mostly center around messaging, privacy and giving you better control over all of your smart devices.
Microsoft confirms compact, $299 Xbox Series S arriving on November 10 — The Series S is essentially a stripped-down version of the upcoming Series X, without true 4K rendering and with a lot less processing power.
Apple’s next event is September 15 — The event will almost certainly feature the new Apple Watch.
Startups, funding and venture capital
General Motors takes $2 billion stake in electric truck startup Nikola — Through the deal, GM gets 11% ownership in startup Nikola, and will, in turn, produce Nikola’s wild fuel cell pickup truck by the end of 2022.
Silver Lake leads $500 million investment round in Indian online learning giant Byju’s — The round values the Indian online learning platform at $10.8 billion.
Progress snags software automation platform Chef for $220M — Progress, a Boston-area developer tool company, is boosting its offerings in a big way.
Advice and analysis from Extra Crunch
How to respond to a data breach — How a company responds to a data breach can make or break its reputation.
9 proptech investors talk co-living, home offices and other pandemic trends — TechCrunch surveyed nine firms that are writing checks today, and this second installment focuses on the opportunities and risks for startups.
JFrog’s IPO strong initial price range values it ahead of the larger Sumo Logic — The IPO wave continues to crest as a number of well-known technology companies line up to float their equity on American exchanges.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
‘Mulan’ drove Disney+ app downloads up 68% week-over-week, but didn’t beat ‘Hamilton’ — According to early data, the launch helped grow Disney+ mobile installs by 68%, compared with one week prior.
Original Content podcast: ‘Teenage Bounty Hunters’ is more interested in relationships than bounty hunting — Despite the show’s silly name, we ended up surprisingly invested in the characters.
Drew Houston will talk about building a startup and digital transformation during COVID at TechCrunch Disrupt — This is next week!
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Daily Crunch: Apple files countersuit against Epic

Daily Crunch: India bans PUBG and other Chinese apps

India continues to crack down on Chinese apps, Microsoft launches a deepfake detector and Google offers a personalized news podcast. This is your Daily Crunch for September 2, 2020.
The big story: India bans PUBG and other Chinese apps
The Indian government continues its purge of apps created by or linked to Chinese companies. It already banned 59 Chinese apps back in June, including TikTok.
India’s IT Ministry justified the decision as “a targeted move to ensure safety, security, and sovereignty of Indian cyberspace.” The apps banned today include search engine Baidu, business collaboration suite WeChat Work, cloud storage service Tencent Weiyun and the game Rise of Kingdoms. But PUBG is the most popular, with more than 40 million monthly active users.

The tech giants
Microsoft launches a deepfake detector tool ahead of US election — The Video Authenticator tool will provide a confidence score that a given piece of media has been artificially manipulated.
Google’s personalized audio news feature, Your News Update, comes to Google Podcasts — That means you’ll be able to get a personalized podcast of the latest headlines.
Twitch launches Watch Parties to all creators worldwide — Twitch is doubling down on becoming more than just a place for live-streamed gaming videos.
Startups, funding and venture capital
Indonesian insurtech startup PasarPolis gets $54 million Series B from investors including LeapFrog and SBI — The startup’s goal is to reach people who have never purchased insurance before with products like inexpensive “micro-policies” that cover broken device screens.
XRobotics is keeping the dream of pizza robots alive — XRobotics’ offering resembles an industrial 3D printer, in terms of size and form factor.
India’s online learning platform Unacademy raises $150 million at $1.45 billion valuation — India has a new startup unicorn.
Advice and analysis from Extra Crunch
The IPO parade continues as Wish files, Bumble targets an eventual debut — Alex Wilhelm looks at the latest IPO news, including Bumble planning to go public at a $6 to $8 billion valuation.
3 ways COVID-19 has affected the property investment market — COVID-19 has stirred up the long-settled dust on real estate investing.
Deep Science: Dog detectors, Mars mappers and AI-scrambling sweaters — Devin Coldewey kicks off a new feature in which he gets you all caught up on the most recent research papers and scientific discoveries.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
‘The Mandalorian’ launches its second season on Oct. 30 — The show finished shooting its second season right before the pandemic shut down production everywhere.
GM, Ford wrap up ventilator production and shift back to auto business — Both automakers said they’d completed their contracts with the Department of Health and Human Services.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Daily Crunch: India bans PUBG and other Chinese apps

Dorian raises $3.25M for its no-code, interactive storytelling platform

With Dorian, co-founder and CEO Julia Palatovska said she’s hoping to empower fiction writers and other storytellers to create their own games.
The startup is announcing that it has raised $3.25 million in seed funding led by March Capital Partners, with participation from VGames, Konvoy Ventures, London Venture Partners, Michael Chow (co-creator of the Twitch series “Artificial”), Andover Ventures and talent management company Night Media.
In addition, John Howell, the former vice president of partnerships at Twitch, has joined the board as an independent director.

Palatskova previously worked in gaming as the head of business development at G5 Entertainment, and she said she’d also become entranced by narrative games and interactive fiction. And while there are existing interactive fiction platforms, she saw “an opportunity that I felt was missing,” particularly in the fact that those platforms are “entirely single player, with no opportunity to play and collaborate with other people.”
So she gave me a quick tour of the Dorian platform, showing me how, without coding, a writer can essentially design characters and backgrounds by choosing from a variety of visual assets (and they’ll eventually be able to upload assets of their own), while using a flowchart-style interface to allow the writer to connect different scenes in the story and create player choices. And as Palatskova noted, you can also collaborate on a story in real-time with other writers.
“In terms of writer productivity, I would say there is almost no difference between creating interactive fiction on our engine and just writing fiction,” she said.

Image Credits: Dorian

From what I could see, the resulting games look similar to what you’d find on platforms like Pocket Gems’ Episode, where there aren’t a lot of technical bells and whistles, so the story, dialogue and character choices move to the forefront.
When I brought up the open-source game creation software Twine, Palatskova said Twine is “just a tool.”
“We want to be more like Roblox, both the tools and the distribution,” she said.
In other words, writers use Dorian to create interactive stories, but they also publish those stories using the Dorian app. (The writer still owns the resulting intellectual property.) Palatskova noted that Dorian also provides detailed analytics on how readers are responding, which is helpful not just for creating stories, but also for monetizing via premium story choices.
In fact, Dorian says that in early tests involving around 50,000 players, writers were able to improve monetization by 70% after only one or two iterations. And Palatskova noted that with Dorian’s games — unlike an interactive film such as “Black Mirror: Bandersnatch” —”It’s fast and easy to test multiple branches.”
Dorian is currently invite-only, but the plan is to launch more broadly later this year. Palatskova is recruiting writers with and without gaming experience, but she also expects plenty of successful contributions to come from complete novices. She wants Dorian to be “a completely open platform, like Roblox or Twitch for writers.”
“Dorian’s success in creating an interactive platform that values storytelling while prioritizing monetization for its writers is a game-changer,” said March Capital’s Gregory Milken in a statement. “Julia and her team are creating a community that is primed to capture the attention of today’s influential but underrepresented audiences of diverse content creators.”
Update: An earlier version of this post incorrectly stated that Dorian had raised $3.15 million.

Roblox raises $150M Series G, led by Andreessen Horowitz, now valued at $4B

Dorian raises $3.25M for its no-code, interactive storytelling platform

Apple terminates Epic Games’ App Store account

Epic Games has been removed from Apple’s App Store.
If you’ve already downloaded Fortnite to your Mac or iOS device, it should still work, but Epic’s termination means the Fortnite developer will no longer be able to submit new apps or updates.
MacStories Managing Editor John Voorhees noted the termination on Twitter, as well as the fact that the App Store is currently featuring Fortnite competitor PUBG.

Apple confirmed the move in a statement:
We are disappointed that we have had to terminate the Epic Games account on the App Store. We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation. Epic has refused. Instead they repeatedly submit Fortnite updates designed to violate the guidelines of the App Store. This is not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.

You missed your chance. Epic is off the App Store now.
Also, this fight has gotten very petty. Today’s featured app? PUBG https://t.co/evp2R6qRxC pic.twitter.com/2vyRj6Oy1U
— John Voorhees (@johnvoorhees) August 28, 2020

Apple also said that Epic has been creating support issues by directing frustrated users toward AppleCare.
This is the latest development in the Epic-Apple dispute, which began earlier this month when the developer introduced support for direct payments in Fortnite, attempting to circumvent the 30% cut that Apple takes on App Store payments. This prompted Apple to boot Fortnite from the App Store, with Epic immediately launching a lawsuit and a publicity campaign that accused Apple of abusing its market power.
Earlier this week, a federal district court judge ordered Apple not to block access to Epic’s Unreal Engine for developers, but she said that Fortnite could stay out of the App Store until it complied with the rules.
Today’s removal should not affect the Unreal Engine, which Epic manages through a separate account.

Apple ordered to not block Epic Games’ Unreal Engine, but Fortnite to stay off App Store

Apple terminates Epic Games’ App Store account

Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store

Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30% cut it demands for the privilege of doing business on iOS.
Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”

Epic files motion for injunction against Apple over threat to revoke all developer access

In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:
Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”
This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:

Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.
In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.

One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”
If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.
Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:

Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.
But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.

Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual, considering the accounts share tax IDs, emails and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)
Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store:

[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.
Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.

Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:
All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.
Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way toward clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.
The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.

Apple goes to war with the gaming industry

Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of thing consumers want these days, the decision was not popular. Other developers, industries and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.
But of course, even the rule-challenging process is bound by Apple’s rules.
You can read the full Apple filing below:
Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd

Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store