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Epic CEO Tim Sweeney Admits App Store's 30% Cut Is Similar to Consoles, Would Have Accepted Special Deal With Apple

MacRumors said:


Apple's legal battle with Epic Games is continuing on, and during the second day of the trial, Epic Games' CEO Tim Sweeney continued his testimony against Apple.

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Sweeney was grilled by Apple's lawyers, and made several points seemingly favorable to Apple. In addition to mentioning how he prefers Apple's iPhone and values Apple's privacy policies that he's aiming to dismantle, Sweeney confirmed that Apple's 30 percent cut is also the "most prevalent rate" that other platforms charge.

Microsoft, Sony, and Nintendo all take a 30 percent cut from Epic Games on their platforms and require their in-app purchase systems to be used, but Sweeney said that Epic is not challenging them because he believes in the idea of "subsidized hardware," though he also admitted that iPhone and iOS development is "very similar." It's also worth noting that Fortnite makes more money on console platforms than it does from iOS.

Sweeney confirmed that Epic Games has a history of bullying platform makers. Epic Games pushed Sony into allowing cross-platform play, but Sony ultimately got the upper hand and requires additional payment to enable cross-platform capabilities, unlike iOS, where cross-platform play is free and has been since Fortnite launched on the App Store.

Apple pointed out Epic Games' use of Apple's Metal API and shared correspondence where Sweeney and Epic had praised Metal in the past as evidence that Epic benefits from Apple's APIs and SDKs. From an Epic internal email discussing a quote to give to Apple:Starting in 2015, Sweeney began trying to convince Apple to make the App Store an open platform.

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Humorously, when he got Sweeney's initial email, Cook didn't know who Sweeney was. "Is this the guy that was at one of our rehearsals?" he asked Phil Schiller in a forwarded email.

When asked whether he would have accepted a special deal from Apple for a lower App Store commission, Sweeney said "Yes, I would have," which seems to weaken Epic's argument that its decision to kick off a legal battle with Apple was done to benefit all developers.

At the conclusion of today's questioning, Sweeney was asked what he would do if Epic Games loses the case. In response, he said that Apple would be able to cut off Fortnite and remove Epic Games from the developer program for any reason. "We would have to live with not supporting the iOS platform," he said.

The legal fight between Apple and Epic will continue for three weeks, with Apple executives like Tim Cook set to testify during the third week. We'll have ongoing coverage of Apple v. Epic as the case continues on.

Article Link: Epic CEO Tim Sweeney Admits App Store's 30% Cut Is Similar to Consoles, Would Have Accepted Special Deal With Apple
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happyprozak said:
Does Nintendo subsidize hardware? I haven't kept up with them in recent years but unless they have changed their business model, Nintendo does not subsidize hardware the way XBOX and Sony does.
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No, Nintendo sells machines at a profit. At least since the Gamecube. Every Wii, Wii U, Switch, and DS has been sold with a good profit and with modest hardware.
 
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happyprozak said:
Does Nintendo subsidize hardware? I haven't kept up with them in recent years but unless they have changed their business model, Nintendo does not subsidize hardware the way XBOX and Sony does.
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It’s an irrelevant distinction to me. Whether a company subsidies their hardware or not has nothing to do what margins to charge on their software.

It’s called a choice. Just like Sony choosing to sell their PlayStation hardware at cost is a choice.

I see nothing wrong with Apple being able to charge a premium on smartphones while still extracting a 30% cut from developers.

People are trying to grasp at straws here.
 
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Jimmdean said:
It doesn't sound like he really understands the situation either. They can come back under the previous terms. Apple disallowing that would be illegal.
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Not sure it would be illegal.

If you look at the sequence of events: Epic told its lawyers to prepare a lawsuit against Apple for being removed from the AppStore. Then Epic submitted a new version for review, which was accepted. However, once the version was in the hands of end users, it started blatantly violating the App Store rules. Apple removed the app from the store, and three hours later they were sued.

Surely Apple should be allowed to say "No, we don't want to do business with Epic anymore." in this situation.
 
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Abazigal said:
Epic’s case is looking weaker and weaker by the day.

My prediction is that this ends badly for Epic, similar to the Apple / Adobe 20-year fight over Flash. They eliminate dependencies on untrustworthy actors.
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I’m figuring some form out out-of-court settlement is definitely in the cards, now, with Epic paying Apple’s legal fees and staying off the AppStore. I’m wondering if it’ll go the full three weeks.
 
tubedogg said:
For the person that is so concerned about Apple not being the One Source for apps anymore, this happened in Apple's App Store:

American schools' phone apps send children's info to ad networks, analytics firms
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That page also mentions that the situation was considerably worse for Android than for iOS. Just because the Apple App Store fails to be totally 100% foolproof at preventing problems doesn't mean it can't still be a serious help.

It also sounds like that the way these apps are accomplishing this is with tools Apple allows apps to have, which could be resolved by Apple not allowing apps to have them. These programs are not truly bypassing the App Store model. If the model could be bypassed at will like what Epic wants, they could do things like wedge themselves into the underlying system so they could monitor absolutely everything on the device and could never be removed. I do not want my iOS/iPadOS devices to have to become no more secure than Windows PCs just because it will make it even easier for scummy microtransaction apps targeting children to make money. Europe may very well be about to make that happen, and that bothers me.
 
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cmaier said:
I’m not aware of a single case where anyone was found to have committed an antitrust violation in circumstances remotely similar to this? Do you know of any?
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No, no one has ever been found to have committed an antitrust violation when the market in question has been defined using a term trademarked by the company in question.
 
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countryside said:
I am really confused if/how EPIC thinks they can win this...

What is in it for them? Beyond a slim chance of winning?

Is it the 'all publicity is good publicity' mindset? Not to mention they are losing out on iOS revenue? And look like a spoiled entitled brat?
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Sweeney clearly has a savior complex it’s what makes him think comparing what he’s been doing to the civil movement is a good look.
 
Tim Sweeney one morning in 2015: I think I’ll email the CEO of one of the most profitable companies on the planet about an issue that‘s really important to my company and start it out with the word “Ya’ll”.
 
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As I’ve said in another post. I think Epic will jeopardize everything. They aren’t the best candidate to this venture at all.

Epic vs Apple case is dead.
 
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ArPe said:
So many social media and gaming CEOs have gone mad with the idea of creating their own platform currency or meme tokens and becoming a kind of unaccountable unelected government over their users. Collecting their user’s data and financial lives. They are being used as a proxy to attack our democratic nations on behalf of the autocratic regimes.
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This would get shutdown by the US government immediately. Epic is 40% owned by a Chinese company.
 
I figured Epic would abandon the Apple platforms if they don't win, just cause - and Sweeney confirms it on Day 2.

Guessing he's also counting on being able to use GeForce Now to serve those customers on Apple platforms without developing for them. Makes me wonder if he'll drop Android as well a bit down the road. A pity since iOS rocks for games on mobile.

tubedogg said:
For the person that is so concerned about Apple not being the One Source for apps anymore, this happened in Apple's App Store:

American schools' phone apps send children's info to ad networks, analytics firms
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There's always going to be stuff that gets through, always. It's just that it gets through alot less than on Google Play and on the open field that is the install from anywhere DOS/Windows/Mac model. And people want the App Store's model. And it'll get better as time goes on.
 
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Anyone rooting for Apple, Steam or any other platform for taking 30% from game sales, are a bunch of corporate shills. This practice needs to end, and the Epic and Microsoft stores have at least taken steps to improve the revenue for game companies - esp. considering computer games' ever-increasing complexity and production expenses.

How many billions of dollars do Apple and Steam really need to snatch up from other people's hard work, by simply offering a distribution platform? 12-15% would be a more sensical revenue cut, but keep pushing your fake politically correct messaging Apple, trying to cover up the fact that you are a bunch of greedy money hoarders.
 
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Wildkraut said:
Why not? Not everybody gets this feeling of being a submissive sheep when talking to a CEO.
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Why not? Because (like I sarcastically implied) if you’re going to address the CEO of a company about an issue that’s impacting the bottom line of your company you don’t start it out with “Ya’ll“. Tim Cook didn’t even know who he was, they don’t have a casual relationship, so it’s really unprofessional and downplays the objective of addressing what was clearly an important issue to Epic Games.
 
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Peter_M said:
Anyone rooting for Apple, Steam or any other platform for taking 30% from game sales, are a bunch of corporate shills. This practice needs to end, and the Epic and Microsoft stores have at least taken steps to improve the revenue for game companies - esp. considering computer games' ever-increasing complexity and production expenses.

How many billions of dollars do Apple and Steam really need to snatch up from other people's hard work, by simply offering a distribution platform? 12-15% would be a more sensical revenue cut, but keep pushing your fake politically correct messaging Apple, trying to cover up the fact that you are a bunch of greedy money hoarders.
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I can side with Apple on this legal fight and still believe 30% is too high.
 
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