Epic Games Lays Off Over 800 Employees as Apple Legal Battle Drags On

[MVMNT]

Epic failure on other people's behalf, here. Got to feel for those directly affected by this fools errand of a dragon slaying attempt.

 

[jlc1978]

You should also add you're the only store in town.

Except they aren’t. You may prefer the iPhone but user preference doesn’t define a monopoly.

This is all about greed, pure and simple. Apple built a very lucrative ecosystem that made developers a lot of money. They want more of it, but want Apple to continue to provide the same services and access as before. Sideloading should end the argument over Apple’s terms. Developers will now be able to completely bypass the App Store, so Apple should be free to require only IAP purchases and not carry apps that are free to download but can be paid for outside of the App Store. If enough 3rd party options begin to hurt Apple, they can change their terms.

You want to create your own store? Write the app, advertise it and hope it takes off, just don’t expect Apple to host it on their App Store and give a competitor access to their customer base.

In the end, I think the small developer has the most to lose if Apple decides to change their model and start charging a la carte fees upfront such per d/l, update, signing, etc. They may have to layout cash up front before making a single sale; cash the may not have or need for other things.

 

[kc9hzn]

I don't know you, so I don't know your experiences. From my perspective as someone who has run an organization of some significant size (it wasn't in the B but it was in the MM), my perspective on the matter is different than yours. Based on my practical knowledge, we can look at the math at a large-scale corporate level. If they are in a growth stage then they should have adequate funding. If they are in the revenue phase then they should have the profit. A management issue, getting caught off guard, making poor gambles, or likely a blend of all of them. But we should also cut them some slack as the entire gaming industry has been impacted. I am not sure if you are aware, but the layoffs from EPIC are not unique. Blizzard, Microsoft, Unity, Ubisoft...I mean if you look at the top game publishers you are going to have a harder time finding a company who HASN'T laid people off. Oh....and they have even less of their revenue (in some cases none) from the App Store.

If I am totally wrong, that's cool, like many people I take in the knowledge that I can learn, add it to the experiences I have, and try and make the best decisions possible. I think I am correct, I think I have made a good case for it, but if we still disagree, I am also ok with that.

What cost Epic more than anything was probably the decline in the popularity of Fortnite (for multiple reasons, of which not being on iOS or in the Google Play Store probably was a contributing factor*, but the end of pandemic restrictions probably hurt them dramatically, as well, and it seems like they mused a significant chunk of money in an attempt to drive further user growth**, and the battle royale marketplace is certainly saturated). Rather than save money, they tried to inflate further user growth.

* Not being on most smartphones’ App Stores probably was detrimental to user retention and growth, especially considering the age target for Fortnite. Most Fortnite players were and are probably playing it on consoles, with only some playing it on gaming PCs. No Steam Decks, which is one of the disadvantages of their attempt at copying Valve.

** Ask Facebook about how difficult and expensive the next billion users are to acquire. You can’t depend on user growth to gain more money, since growth stops at some point. (Population growth appears to stop at some point, too.) Eventually, you have to shift focus to user retention, and it seems like this was a weak spot for Epic.

 

[Arsenikdote]

I am not talking at Macro level, sure industry wide growth is gone. But individual company decisions are important. It shows recklessness with likely losing $1 B from a platform like iOS, which is more or less a revenue channel for Epic. If you look at the data, Epic wasn’t really wasn’t spending much money for the revenue they were getting from iOS. Sweeney’s own rhetoric was more of an activist than a CEO, most lawyers said Epic didn’t have much of a case. And add to the fact, iOS platform has shown consumers are willing to spend money. No matter how you slice and dive, it shows very poor judgement by Epic.

Absolutely!!! We are in agreement that these are example of poor decisions by Epic and poor decisions will almost always have financial impact. If these are the ones we see, what are the others we don't?

 

[Arsenikdote]

What cost Epic more than anything was probably the decline in the popularity of Fortnite (for multiple reasons, of which not being on iOS or in the Google Play Store probably was a contributing factor*, but the end of pandemic restrictions probably hurt them dramatically, as well, and it seems like they mused a significant chunk of money in an attempt to drive further user growth**, and the battle royale marketplace is certainly saturated). Rather than save money, they tried to inflate further user growth.

* Not being on most smartphones’ App Stores probably was detrimental to user retention and growth, especially considering the age target for Fortnite. Most Fortnite players were and are probably playing it on consoles, with only some playing it on gaming PCs. No Steam Decks, which is one of the disadvantages of their attempt at copying Valve.

** Ask Facebook about how difficult and expensive the next billion users are to acquire. You can’t depend on user growth to gain more money, since growth stops at some point. (Population growth appears to stop at some point, too.) Eventually, you have to shift focus to user retention, and it seems like this was a weak spot for Epic.

That makes a lot of sense, I think a lot of video game publishers found themselves in a very precarious spot in the last 18 months. What I wonder is was this downturn already coming down the road and the pandemic postponed it or is this simply companies over reaching because of the massive uptick over the past few years.

 

[webkit]

Neither of those arguments makes apple a monopoly or monopolistic. If Apple is monopolistic, pretty much every embedded platform, specialized store, and industry becomes a monopoly.

Neither of what arguments? You had stated Android has a "bigger user base" and I was simply pointing out that it can vary by country/region. iOS actually has a "bigger user base" than Android in some places, including nearly 70% in Japan.

As far as what defines or categorizes a monopoly, that again can vary by country/region, case, etc. However, simply being a monopoly (or whatever classifications some countries/regions may use) is not necessarily illegal.

 

[TechnoMonk]

Neither of what arguments? You had stated Android has a "bigger user base" and I was simply pointing out that it can vary by country/region. iOS actually has a "bigger user base" than Android in some places, including nearly 70% in Japan.

As far as what defines or categorizes a monopoly, that again can vary by country/region, case, etc. However, simply being a monopoly (or whatever classifications some countries/regions may use) is not necessarily illegal.

Running a platform is not a monopoly. If you go by that logic, all gaming consoles, most of device manufacturers in multiple industries are a monopoly. Users are not forced to buy iPhone, they have plenty of other devices.

 

[Seoras]

I've always suspected Sweeney of being either mad or someone else having leverage of some sort on him because what CEO in their right mind cuts revenue that large to go on a morality crusade?
If Epic wasn't privately owned by Sweeney the share holders would have booted him out by now.

 

[tubular]

what CEO in their right mind cuts revenue that large to go on a morality crusade?

Ask Elon.

 

[Abazigal]

I've always suspected Sweeney of being either mad or someone else having leverage of some sort on him because what CEO in their right mind cuts revenue that large to go on a morality crusade?
If Epic wasn't privately owned by Sweeney the share holders would have booted him out by now.

I view it as a reckless gamble that ultimately went poorly for Epic. If Epic had won, Apple would have been forced to open up the App Store. Epic would have been able to offer their own App Store on iOS and host developers’ apps and charge them a commission for app sales, in addition to keeping 100% of IAPs from their own games. The financial upside would have been huge.

Instead, the lawsuit went poorly for them (as I predicted it would when this first happened), in part because Apple is not a monopoly, and here we are.

 

[Unregistered 4U]

Running a platform is not a monopoly. If you go by that logic, all gaming consoles, most of device manufacturers in multiple industries are a monopoly. Users are not forced to buy iPhone, they have plenty of other devices.

I’ve always used the rule of thumb that if the market being defined as having a monopoly includes the trademarked/servicemarked name of a company’s product, then while it technically CAN be defined as a monopoly, it’s an absurd market definition.

For example, in the market of “over ear headphones”, Apple is one of many companies in that market, no monopoly. If I define the market as “Apple AirPods Max”, then Apple does absolutely have a monopoly as no one else makes “Apple AirPods Max”. However, the definition is absurd because no one expects Sony to be able to produce Apple AirPods Max.

That’s why, in the EU, they created a made up term “Gatekeeper”, (the definition of which was CAREFULLY constructed to not include any EU companies).

 

[Unregistered 4U]

I view it as a reckless gamble that ultimately went poorly for Epic. If Epic had won, Apple would have been forced to open up the App Store.

I think the main reason why they lost was because an argument could not be constructed that could legally affect Apple while not having disastrous effects on EVERY other company that has entered into deals like this. Everyone would have been forced to open up “everything” and renegotiate every agreement of this type.

 

[4389842]

Apple should stop taking a cut from everything an app does for the user. Epic should be allowed to sell skins without Apple's cut. Apple's cut should come only from the original app and subscriptions. If Apple continues to take a cut for every little thing an app offers it will be hounded for monopolist behaviours, especially if market share goes up.

Apple provide the store, the infrastructure, access to the user base… without any of that there would be nothing or nobody to sell to. What is wrong with them taking a slice?

I guess you can always try to build your own end-to-end platform, as e.g. steam are doing with their steam deck…

 

[webkit]

Running a platform is not a monopoly. If you go by that logic, all gaming consoles, most of device manufacturers in multiple industries are a monopoly. Users are not forced to buy iPhone, they have plenty of other devices.

Just because there are alternatives in a market doesn't mean a company can't be declared a monopoly or having monopoly power and certainly doesn't mean they can’t be subject to antitrust laws. Microsoft, for example, was declared a monopoly in the desktop OS market in the 1990s even though there were alternatives like Mac OS, OS/2, Linux, BeOS, etc.

In the case of mobile OS, there are only two major players: iOS and Android. In some countries/regions, iOS has the greater share and in other countries/regions, Android has the greater share but it's up to each country/region to determine and enforce antitrust laws and regulations.

 

[webkit]

For example, in the market of “over ear headphones”, Apple is one of many companies in that market, no monopoly. If I define the market as “Apple AirPods Max”, then Apple does absolutely have a monopoly as no one else makes “Apple AirPods Max”. However, the definition is absurd because no one expects Sony to be able to produce Apple AirPods Max.

A monopoly or monopoly power is not typically defined or determined at the product level. it's about the market level. The market is not AirPods or AirPods Max, it’s earbuds or earphones. The same is true regarding iOS. The market is not iOS, it's mobile OS of which iOS and Android dominate. It's the dominant positions Apple (with iOS) and Google (with Android) have in the mobile OS market that is/could be the factor.

 

[Unregistered 4U]

Apple provide the store, the infrastructure, access to the user base… without any of that there would be nothing or nobody to sell to. What is wrong with them taking a slice?

I guess you can always try to build your own end-to-end platform, as e.g. steam are doing with their steam deck…

Steam is smart. While everyone else is chattering over peanuts, they’re building the foundations of a new market. Just think, if Valve was focused on trying to open up the App Store in order to have their games on mobile devices, we wouldn’t have the Steam Deck and the variety of related hardware that’s growing in power and sophistication every month.

Those who say it can’t be done, just lack the skills to do it.

 

[Unregistered 4U]

Microsoft, for example, was declared a monopoly in the desktop OS market in the 1990s even though there were alternatives like Mac OS, OS/2, Linux, BeOS, etc.

To be clear, Microsoft’s problem wasn’t just “they were a monopoly”. They were using their influence to control markets outside Windows software. They were doing things like forcing hardware companies to that wanted to license Windows to pay for a Windows license for every computer they shipped, even those without Windows. They forced hardware companies to include Internet Explorer for free, with the threat of canceling their license. Microsoft having control over Windows is valid and expected. Microsoft having control over hardware makers is undue influence.

Apple isn’t forcing any outside companies to pay for iOS on all the phones they ship, including the ones without iOS. They’re not forcing Safari to be bundled with every phone with the threat of cutting off iOS licensing support. Apple has no influence outside products/services that are trademarks/servicemarks of Apple.

 

[Abazigal]

Just because there are alternatives in a market doesn't mean a company can't be declared a monopoly or having monopoly power and certainly doesn't mean they can’t be subject to antitrust laws. Microsoft, for example, was declared a monopoly in the desktop OS market in the 1990s even though there were alternatives like Mac OS, OS/2, Linux, BeOS, etc.

In the case of mobile OS, there are only two major players: iOS and Android. In some countries/regions, iOS has the greater share and in other countries/regions, Android has the greater share but it's up to each country/region to determine and enforce antitrust laws and regulations.

I believe that in the US, monopoly is defined as harm to consumers. A strong argument can be made that the iOS App Store is what allows for the greatest amount of good for the greatest number of users, and allowing sideloading can result in unintended consequences, such as users being tricked into installing malware via shady Facebook apps.

That’s why I am quite leery of opening up the App Store, because the people making these arguments are likely not the people who have to deal with the fallout (or at least, they think they are smart enough to be spared the consequences).

 

[webkit]

To be clear, Microsoft’s problem wasn’t just “they were a monopoly”. They were using their influence to control markets outside Windows software. They were doing things like forcing hardware companies to that wanted to license Windows to pay for a Windows license for every computer they shipped, even those without Windows. They forced hardware companies to include Internet Explorer for free, with the threat of canceling their license. Microsoft having control over Windows is valid and expected. Microsoft having control over hardware makers is undue influence.

As I've stated on here in the past, simply being a monopoly is not itself illegal. It's that plus "anticompetitive behavior" that can create legal issues depending on the country/region, case, etc.

Apple isn’t forcing any outside companies to pay for iOS on all the phones they ship, including the ones without iOS. They’re not forcing Safari to be bundled with every phone with the threat of cutting off iOS licensing support. Apple has no influence outside products/services that are trademarks/servicemarks of Apple.

There are several things that can potentially be considered anticompetitive behavior. Some of Apple's may include restricting alternative app stores, sideloading, browser engines, etc. on a dominant mobile OS platform. Apple not only restricts retailers (AT&T, Best Buy, etc. ) but even end users. As such, Apple absolutely influences the market due to its dominant position in mobile OS.

 

[webkit]

I believe that in the US, monopoly is defined as harm to consumers. A strong argument can be made that the iOS App Store is what allows for the greatest amount of good for the greatest number of users, and allowing sideloading can result in unintended consequences, such as users being tricked into installing malware via shady Facebook apps.

U.S. antitrust laws, and presumably most antitrust laws, are about promoting free and open competition which can help companies and/or consumers. The DOJ and dozens of states have been investigating Apple for years over allegations that it has been abusing market power to stifle competition and are expected to formally sue the company in the coming year or so.

That’s why I am quite leery of opening up the App Store, because the people making these arguments are likely not the people who have to deal with the fallout (or at least, they think they are smart enough to be spared the consequences).

If Apple is ok with allowing sideloading on macOS, they should be similarly ok allowing it on iOS or vice versa i.e., if they are concerned about the "unintended consequences" on iOS, they should be similarly concerned about "unintended consequences" on macOS. The best approach here is to strengthen the product instead of limiting or restricting its capabilities and I feel Apple has the talent and resources to make iOS better even after allowing sideloading, alternative app stores, etc.

 

[Abazigal]

If Apple is ok with allowing sideloading on macOS, they should be similarly ok allowing it on iOS or vice versa i.e., if they are concerned about the "unintended consequences" on iOS, they should be similarly concerned about "unintended consequences" on macOS. The best approach here is to strengthen the product instead of limiting or restricting its capabilities and I feel Apple has the talent and resources to make iOS better even after allowing sideloading, alternative app stores, etc.

I think the key difference between iOS and macOS is that people tend to have way more apps on their smartphones, whereas on a PC, those tend to take place via a website. Even your 2FA codes are sent to your phone, making it a single point of failure, unlike on a PC.

I also don't think Apple is okay with allowing sideloading on macOS. It's just that the App Store came about only much later, after users have come to expect freely downloading software from the web as the norm, so there's no putting the genie back in the lamp after that. Conversely, iOS has always started out closed, so it's easier to keep it that way.

74-year-old man loses $70k after downloading third-party app to buy Peking duck

The police confirmed that a report had been made and investigations are ongoing. Read more at straitstimes.com. Read more at straitstimes.com.

www.straitstimes.com

Here is an example of yet another scam I am reading about in the local news (seems there's a new one being reported every week) about how an android phone user basically gets tricked into sideloading a scam app based on the promise of cheap deals, which then goes on to steal their banking information and siphon their life savings.

The solution my local banks are resorting to (for now at least), is to basically nullify the biggest advantage of android handsets. Their banking apps will flat out refuse to work if they detect the presence of apps downloaded from outside the google play store.

New security feature on OCBC banking app draws mixed reactions

The Monetary Authority of Singapore said it strongly supports banks’ initiatives to bolster the security of digital banking. Read more at straitstimes.com. Read more at straitstimes.com.

www.straitstimes.com

If and when sideloading ever does come to iOS, I wouldn't be surprised to see Apple bake in similar restrictions. For example, have warnings pop up whenever a user tries to download an app from outside the iOS App Store. The user may even have to agree to have certain features disabled on their iPhone, such as access to iCloud or Apple Pay.

I am not saying that an iPhone user can never be scammed (this is just one of numerous ruses used by con artists), but for the moment, I don't really feel like I am losing out on anything from not being able to freely download apps outside of the App Store, I chose an iPhone specifically for the enhanced security, and it does nullify the oft-cited argument that "I don't have to sideload apps".

 

[jlc1978]

U.S. antitrust laws, and presumably most antitrust laws, are about promoting free and open competition which can help companies and/or consumers. The DOJ and dozens of states have been investigating Apple for years over allegations that it has been abusing market power to stifle competition and are expected to formally sue the company in the coming year or so.

However, Abaxigal has it right when stating the test ultimately is "Is the consumer harmed?" In other words, do they pay more as a result of iOS being a closed system. Given prices on the Mac App Store tend to mirror those for the same product outside of the store, I'd say the answer was there seems to be no harm to the consumer; although it is open to discussion if the consumer truly is harmed. Merely have a closed ecosystem hewn open ones offer an alternative does not an illegal monopoly make.

Personally, I doubt if 3rd party stores or side loading will have much impact on Apple's App Store revenue since it is the largest consumer base and a very lucrative one, so Apple can simply change the terms to generate revenue to make up for any losses. For example, if a company wants to offer an App for free but use a 3rd party payment system, then Apple can charge to host as well as per d/l; and set the per d/l cost based on the subscription cost. Apple would get paid even if some d/l's don't subscribe. Don't like it? Ue a 3rd party store and give up access to Apple's user base.

 

[I7guy]

U.S. antitrust laws, and presumably most antitrust laws, are about promoting free and open competition which can help companies and/or consumers. The DOJ and dozens of states have been investigating Apple for years over allegations that it has been abusing market power to stifle competition and are expected to formally sue the company in the coming year or so.

We’ll see what happens. Apple has as much money as needed to defend itself.

If Apple is ok with allowing sideloading on macOS, they should be similarly ok allowing it on iOS or vice versa

This doesn’t track.

i.e., if they are concerned about the "unintended consequences" on iOS, they should be similarly concerned about "unintended consequences" on macOS. The best approach here is to strengthen the product instead of limiting or restricting its capabilities and I feel Apple has the talent and resources to make iOS better even after allowing sideloading, alternative app stores, etc.

 

[webkit]

I think the key difference between iOS and macOS is that people tend to have way more apps on their smartphones, whereas on a PC, those tend to take place via a website. Even your 2FA codes are sent to your phone, making it a single point of failure, unlike on a PC.

I also don't think Apple is okay with allowing sideloading on macOS. It's just that the App Store came about only much later, after users have come to expect freely downloading software from the web as the norm, so there's no putting the genie back in the lamp after that. Conversely, iOS has always started out closed, so it's easier to keep it that way.

74-year-old man loses $70k after downloading third-party app to buy Peking duck

The police confirmed that a report had been made and investigations are ongoing. Read more at straitstimes.com. Read more at straitstimes.com.

www.straitstimes.com

Here is an example of yet another scam I am reading about in the local news (seems there's a new one being reported every week) about how an android phone user basically gets tricked into sideloading a scam app based on the promise of cheap deals, which then goes on to steal their banking information and siphon their life savings.

The solution my local banks are resorting to (for now at least), is to basically nullify the biggest advantage of android handsets. Their banking apps will flat out refuse to work if they detect the presence of apps downloaded from outside the google play store.

New security feature on OCBC banking app draws mixed reactions

The Monetary Authority of Singapore said it strongly supports banks’ initiatives to bolster the security of digital banking. Read more at straitstimes.com. Read more at straitstimes.com.

www.straitstimes.com

If "free downloading" is such a concerning security issue, I would've though Apple might have implemented restrictions on macOS similar to iOS years ago especially as some users sync, transfer things, etc. between Macs and iPhones.

If and when sideloading ever does come to iOS, I wouldn't be surprised to see Apple bake in similar restrictions. For example, have warnings pop up whenever a user tries to download an app from outside the iOS App Store. The user may even have to agree to have certain features disabled on their iPhone, such as access to iCloud or Apple Pay.

I am not saying that an iPhone user can never be scammed (this is just one of numerous ruses used by con artists), but for the moment, I don't really feel like I am losing out on anything from not being able to freely download apps outside of the App Store, I chose an iPhone specifically for the enhanced security, and it does nullify the oft-cited argument that "I don't have to sideload apps".

Barring any legal violations, "warnings" would likely be fine. Again, I think the best approach here is to strengthen the product instead of limiting or restricting its capabilities and I feel Apple has the talent and resources to make iOS better even after allowing sideloading, alternative app stores, etc. Requiring Apple to do so will give them the push they need to make the product better and more flexible in the long run.

 

[webkit]

However, Abaxigal has it right when stating the test ultimately is "Is the consumer harmed?" In other words, do they pay more as a result of iOS being a closed system. Given prices on the Mac App Store tend to mirror those for the same product outside of the store, I'd say the answer was there seems to be no harm to the consumer; although it is open to discussion if the consumer truly is harmed. Merely have a closed ecosystem hewn open ones offer an alternative does not an illegal monopoly make.

Personally, I doubt if 3rd party stores or side loading will have much impact on Apple's App Store revenue since it is the largest consumer base and a very lucrative one, so Apple can simply change the terms to generate revenue to make up for any losses. For example, if a company wants to offer an App for free but use a 3rd party payment system, then Apple can charge to host as well as per d/l; and set the per d/l cost based on the subscription cost. Apple would get paid even if some d/l's don't subscribe. Don't like it? Ue a 3rd party store and give up access to Apple's user base.

The consumer may be "harmed" by the lack of competition/choice in app access, browser engine options, payment methods, etc. Antitrust laws are largely about promoting free and open competition and by Apple restricting certain things on iOS they are restricting free and open competition in the mobile OS market. Enforcing these types of laws are necessary to help make this market and similar markets more open now and in the future.

It will be interesting to see how the DOJ case(s) against Google/Alphabet play out and what the expected case(s) against Apple will focus on.