Recode co-founder on Epic Games' lawsuit over Apple App Store

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Walt Mossberg, Recode co-founder, joins 'Squawk Alley' to discuss the battle between Epic Games and Apple and what it means for the future of both companies. Subscribe to CNBC PRO for access to investor and analyst insights on Apple and more:

The escalating battle between Apple and Epic Games has already made it impossible for iPhone users around the world to download Fortnite.

But if the war between the two companies continues, it could affect hundreds of other games, Epic said in a legal filing on Monday. It described Apple’s actions as an “existential threat.”

If Apple disables Epic’s developer account, then the company won’t be able to maintain the Unreal Engine for iPhones and other Apple computers. Unreal is a long-standing set of technologies for displaying 3D graphics. Other game-makers license it from Epic so they don’t have to re-build the same functions from scratch, and it’s used in many popular games, although it’s more popular on consoles and PCs than for mobile games.

The dispute started last Friday when Epic updated Fortnite so users could buy digital character outfits and other items directly with a credit card. That violates Apple’s App Store policies, so Apple removed Fortnite within hours. But Epic Games was prepared, and immediately filed a lawsuit accusing Apple of anti-competitive behavior. Apple is already undergoing scrutiny from Congress over its control of the App Store, which is the only easy way for users to install software on the iPhone and iPad. Epic also kicked off a marketing campaign with a 30-second spot encouraging Fortnite gamers to “fight back” against Apple.

On Monday, Epic said that Apple threatened not only to remove Fortnite, but to disable the company’s developer accounts entirely. This would essentially make the Unreal Engine a dead-end technology on the iPhone and Mac, according to Epic.

“When Apple terminates Epic’s Apple Developer Program accounts, the consequences will be devastating,” Epic CEO Tim Sweeney wrote in a filing on Monday. “Without access to these SDKs, APIs, and other tools, Epic would be unable to develop future updates to the Unreal Engine for use on iOS and macOS, and would thus be forced to discontinue Unreal Engine for iOS and macOS.”

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