Tim Sweeney insists Epic Games’ legal battle is meant to stop a monopoly

    
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Tim Sweeney insists Epic Games’ legal battle is meant to stop a monopoly

In an interview with NPR, Epic Games CEO Tim Sweeney is continuing to explain that the motivation for his company’s legal battle with Google and Apple over Fortnite is meant to stop the tech giants from monopolizing the mobile games space.

“It’s not just Epic being exploited by Apple, but it’s every developer who goes along with that scheme colluding with Apple and Google to further their monopoly,” Sweeney explains. “These stores are making a lot more money from creative works than the creators.”

The debated 30% cut that the two companies slice off the top of every app on their storefronts has been under scrutiny from regulators in Europe and Washington, D.C. as a potential anti-trust problem, particularly since that same cut does not apply to first-party apps which directly compete on the same marketplace. And while both Apple and Google insist the 30% shave is to ensure apps on their storefronts are safe and secure, Sweeney is not completely convinced.

“Every Apple engineer who works on these services and ensures that iPhone is the most secure platform in the world has got to deeply resent the business guys for taking credit and claiming that their store monopoly is the reason why the platform is secure. It’s just not true,” says Sweeney. “It’s the same bad behavior by Apple and Google that’s driving everybody to the common conclusion that these monopolies need to be stopped.”

The interview does take note of the more human “cost” of this legal kerfuffle, pointing to one Fortnite player and streamer who has lost in-game friends and viewers over the matter. “I had quite a few people that were really sad that they couldn’t play with me anymore,” she says. “Some of those people can’t afford to spend money on a $400 console, or a $1,000 PC.”

A hearing over the matter is set to begin on September 28th. You can catch up with all of the coverage up to this point in the list of links below.

source: NPR

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Dug From The Earth

“Tim Sweeney insists Epic Games’ legal battle is meant to stop a monopoly”…

… To make room for HIS companies monopoly.

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Natalyia

The easy way to tell he’s lying is that they didn’t just file the lawsuit. They tried to sneak by a “hotfix” update past the review process for the AppStore to break the contract they signed any bypass Apple’s payment system.

All they had to do was file the lawsuit, and they’d still be raking in their 70% of sales on the platform, and (in the event they won) could likely ask for the “missing revenue” as part of the court damages from the date of the lawsuit.

Any and all fiscal impact on Epic from this affair is entirely of their own doing – and done with the complete foreknowledge that they were breaking the terms of a contract they voluntarily signed. No, this is Epic wanting to be able to put anything they want, anywhere they want, without paying anything to anyone.

You can argue the merits of the “walled garden” approach Apple has, and you can certainly argue over the cut they take – but the idea that Apple has a “monopoly” on mobile gaming is just stupid. They have control over what gets installed on their devices, but that’s not the same thing as a monopoly on mobile gaming – it’s not even close.

If Epic finds the terms Apple’s insisting on onerous, then they can just not publish their games on iOS. Andtoid devices are the majority of mobile devices already, and if they’re actually somehow “losing money” on iOS games then that’s what they should do. If that’s true for enough developers, then Apple will have to change their policies. But this isn’t about “freedom for developers”, this is about Epic wanting more money.

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Bruno Brito

Better, he could have simply started the line of Phonenites and entered the industry as an option for Apple.

Ark is totally correct here: They are trying to see where abusing legislation will get them because they don’t want to risk everything on a failed business venture. This is clearly thought out.

This thing reminds me of the “Blurred Lines” lawsuit that completely fucked up musical copyright precedent. I’m honestly interested in the outcome if Epic wins, and then EVERY SINGLE STOREFRONT is now obligated to open to it’s competitors. Battlenet, Steam, Apple, Playstore, Epic.

It’ll be funny watching all the CEOs and execs ( specially the Epic ones ) sharpening their pikes for Sweeney’s head.

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Ashfyn Ninegold

Epic decided to go after some of Apple’s money. Full stop.

They didn’t create a competitive product, just like they didn’t create a storefront that can truly compete with Steam. They used money to muscle into the market through exclusives and giveaways.

They are trying a similar strategy here with Apple. They just want something they’ve done nothing to earn and don’t deserve.

They’re the equivalent of a techno-age corporate raider, trying to suck all the money up for themselves so they can then use that money to raid more businesses. That’s their plan.

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Jacquotte Fox Kline

Does Apple deserve a 30% cut? Apple will always seem greedier to me as long as their margins in general are so greedy. It’s more like raiders coming to get the money being stolen from them.

Palamah
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Palamah

As soon as Epic start acknowledging the console manufacturers and their locked-off digital stores (where are the suits against Nintendo, Microsoft and Sony eh?), in the same guise, and stop selling this as doing this solely for the ‘people’, then I’ll take things a little more seriously.

Oh, and where’s my option of digital store for Fortnite on PC? Whilst there is an argument that it might be fine for their own games, complaining that platform owners force users to do digital transactions only through their digital stores, and then forcing PC players to do the same with Epic’s own store is an interesting choice (and yes I’m aware that you can buy gift cards and redeem them, but the only choice in-game on PC is their own store)

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Kevin Smith

Problem is it isn’t a monopoly. No one is stopping epic from creating their own mobile devices an releasing content on them. They just want to be able to use other peoples hard work, just like they are claiming apple and google are doing to make money.

kjempff
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kjempff

That is not how monopoly works.

Palamah
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Palamah

It depends on what the courts decide the ‘monopoly’ is on. If it’s on the ability to create your own OS and app-store platform, then that’s definitely not a monopoly and the case will likely fail in the courts.

If it’s on the ability to select and use different payment mechanisms for in-store purchases, then that’s murkier ground. Especially since Epic were signatories to that agreement, and were fine with it until one day they decided to break the terms of the legal agreement (and who clearly expected the fallout given how quick they were to throw shade at Apple and Google to a lesser extent).

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Arktouros

A lot of people misunderstand what monopolies are or more importantly how they’re regulated and what causes them to run afoul of anti-monopoly laws.

People often confuse that Apple having 100% control over it’s section of it’s market as a monopoly, however you don’t compare something to itself. Apple tightly controls it’s section of it’s relevant markets but are not the entire market itself nor do they control a majority of them. To give you a comparison when anti-trust legislation was written Standard Oil controlled 91% of oil refinement and 85% of final sales in the US.

What’s arguably more important however is the anti-trust legislation. In fact “trust” in anti-trust comes from the practice of forming a trust to avoid state laws and regulations. It represents a period of time where companies would do extremely anti-competitive activities to restrain business and trade in their relevant sectors to retain total control. This is why Microsoft ran afoul of anti-trust law because they were interfering with other businesses and trying to stifle the use of other web browsers. Apple by comparison hasn’t interfered with their relevant markets that we have seen nor has Epic accused them of. They didn’t try to interfere with Fortnite on other phones (like Google did). They didn’t charge Epic a larger % cut but instead gave them the same rate as everyone else.

Instead you have one company who’s stated goals are to become a universal social platform where concerts, performances, games and other social activities happen and they can only become that if they’re on every platform. However that means paying the people who risked investing their time, money and resources into building that platform a cut to be on it and Epic just doesn’t want to pay. Where monopolies and anti-trust comes in is that’s the vehicle Epic wants to use to get them there. If they can accuse these platforms as being monopolies and get the courts to force companies to let others open stores on their platforms they can bypass having to risk billions trying to enter the hardware market (which is always bad) and just stand on the shoulders of other companies investments for free.

To which back to your point, that’s not how monopoly works.

kjempff
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kjempff

What I pointed out to @Kevin was that monopoly is not defined by whether there is a theoretical chance of competition, but what the actual situation is.

With smartphones now more or less a necessity and two companies have a de-facto monopoly on the smartphone market, and these two companies use their monopoly to take unavoidable and unproportionally large cuts – It might be defined as an antitrust issue.
Like Micro$oft bundling their browser, Apple is also taking aggressive measures to lock their users to their other products and making it very difficult to impossible to choose alternative products; and it is working, ask Apple users if they think it there is an actual alternative to their iPhone.. they do not consider Android a reasonable alternative.

Google is not quite as aggressive as they do actually allow other app stores on Android, but for an App developer there is not a realistic alternative to Google Play, because that is where 98% of the customers are. The point is if you want to sell an App for an smartphone, you have no choice but to be on the AppStore or Google play.

So yes both Apple and Google are a de-facto monopoly, and they are taking advantage of it. Whether that is base for antitrust is another question. However, what could speak for it being an antitrust issue, is that because smartphones have become a necessity in a modern world, it is (or maybe becoming) a public interest to have some kind of interception.

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Bruno Brito

ask Apple users if they think it there is an actual alternative to their iPhone.. they do not consider Android a reasonable alternative.

That’s irrelevant. They have the option. “Not liking” an situation doesn’t change reality. Apple has a stranglehold on Apple customers. Period. It’s bullshit, idiotic and completely up for debate, but it’s NOT an monopoly and Epic is not some sort of hero freeing the people here.

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Arktouros

All you said was that’s now how monopolies work, even if you meant something else.

You’re also factually incorrect that the cuts either company takes is proportionally large. Here’s a handy chart by IGN showing various store front cut percentages from PC, console, mobile and physical stores. So we can actually see from the rest of the market a 30% cut is entirely standard and not an abuse of their position within the market. You certainly can feel it’s too much or proportionally large but factually speaking it is still the standard.

Microsoft trial initially focused on bundling the ultimate decision (after appeal) mostly had to deal with it’s other practices. Microsoft was interfering with OEMs to make anti-competitive deals to stop other browsers (IE: Netscape, etc) from being installed by OEMs. This is a pretty clear violation of the anti-trust laws where one business shouldn’t be abusing it’s position of power in an industry.

Apple by comparison isn’t taking any of the steps as you describe. I was a former Apple customer and I 100% saw Android as an alternative and swapped. This is especially true for programs/apps like Fortnite where your account/purchases follows you regardless of what platform you are on or play (albeit I simply repurchased many of the apps I enjoyed). As users become more integrated into a platform’s ecosystem obviously it becomes harder and more involved to swap but the argument they should offer less to customers so it’s easier to swap devices seems a counter intuitive one. Should Fornite have less updates so it’s less compelling so other games can compete in it’s space? Of course not.

Google seems like it actually has interfered with businesses like Epic from making their own deals and I’m far more interested in their dust up in court.

Anti-trust law is pretty specific in the scenarios it covers. While Google has some explaining to do with OEM interference Apple is actually pretty by the book on this scenario. While I understand the sentiment about smart phones being a necessity lets be clear they aren’t. We haven’t even hit the stage where the internet is legally considered a necessity and a large percentage of Americans don’t even have access to the internet. Even if smart phones were, I strongly doubt it’d mean everyone would get an iPhone. There’s a reason why Android is overtaking Apple as time goes on.

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Bruno Brito

By the way, Ark.

I’m aware that monopolies are seen as the beast in the US legislation, but aren’t oligopolies tolerated to the point where it’s actually favorable for companies to build into them?

Because if this is the case, the current situation won’t change because few companies having their chokeholds is still acceptable.

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Arktouros

Monopolies really aren’t seen as the beast in US legislation. In fact if you read through any of the legislation at all you’ll find out that monopolies are actually 100% okay by US law. The simple fact is that many markets take an extreme amount of investment to get into and naturally there won’t be a very competitive market as a result. This is why companies like Microsoft say they don’t see Sony as a competitor when it comes to future gaming, because they see future gaming being cloud based which they’ve invested billions into via Microsoft Azure which Sony just feasibly won’t be able to do.

Really it’s what monopolies or oligopolies do within their markets that generally gets scrutiny. The Gilded Age monopolies when these laws were written did horrific things towards their companies and customers. Now anytime a business does too well (Trillion Dollar Apple!!!) people rattle the chains of the old monopolies but often times fail to understand it was the actions those companies took that was more problematic than their success. Most anti-trust law is actually designed to protect consumers and it’s a pretty uphill battle to prove these things.

Personally I don’t think anything will come out of this for Epic and possibly even go back a step as Apple is probably going to cut ties with Unreal Engine once the dust is settled as well.

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Bruno Brito

I see. Thanks for the explanation.

Could you go in-depth about the horrific things?

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Arktouros

@Bruno Brito

The Gilded Age was basically capitalism unrestricted. Companies would work their workers 60 hours a week and still kept them in poverty level wages. Here’s an example of a Steel Mill who striked and then the company literally called in a private army (the Pinkertons) and they just straight up opened fire and killed each other. There was no such things as the 5 day work week (something that came much later) or any of the kind of labor protections or otherwise. This meant most of the economic growth came at a human cost as new labor was cheap with a huge influx of immigrants. Corruption in politics was crazy, in New York they actually legalized it lol…

Some good TV shows out there for the period. I really liked Men who Built America from History Channel (was on Amazon Prime). Probably the most notable thing about this period is the wealth disparity and the rise it gave to populist movements. In many ways I think this is repeating in our current society.

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Bruno Brito

Ah, basically the legacy of the industrial revolution. Got it.

We had some of these here too. The CLT ( Consolidação das Leis do Trabalho, or Worklaw Consolidation ) was actually penned and regulated by Getulio Vargas, a authoritary president, which is something actively unique.

Vargas actually improved life for workers ( on the cost of strikes being dangerous and people having few civil liberties ), and had some sort of public spirit and wanted to improve Brazil. I can’t admire his authoritarian ways, but i at least admit he cared about our position in the globe.

kjempff
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kjempff

@Arktouros By “unproportionally” large cuts I didn’t mean compared to others, I mean unproportional to what an app developer gets in return, for that cut.

I also appreciate that you are actually addressing what I write instead of twisting words. You clearly understand antitrust law better than me, but law also changes as time changes and new situations come to the table, so nothing is really certain – That was kind of what I was exploring.

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Bruno Brito

I also appreciate that you are actually addressing what I write instead of twisting words.

Imagine being so petty you can’t actively direct your criticism to the person just because your insides burn with anger and shame.

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Arktouros

@kjempff The problem with that I think is that it’s not the full picture to show the proportions correctly.

Like lets say you have a game company. They make payment arrangements and release their product via their website as a direct game to install. That gets them 50,000 download/sales lets say. Now they put it on Steam and it gets another 100,000 download/sales. Did Steam really take an unproportional amount of money from them by taking 30%? On their own they weren’t going to get those extra 100k sales only their original 50k. They still ended up making more on Steam at 70% than they would have made selling on their own at 100%.

What most of these platforms offer is access to their customer bases via their platform. They built those customer bases and their platform by investing millions/billions of resources into making them good, so good that as you say they can be difficult to leave behind. The entry fee to access that customer base is 30% of what you sell on their platform.

Now if you think that’s too much? Alright. That’s fair. You can try other platforms, but they are pretty much charging the same as well. You could always try to start your own rival mobile phone sales and design your own operating system but the fact that sounds wholly and entirely unrealistic shows the sheer level of effort, time and resources already invested into existing platforms as being valuable.

Laws certainly change, but I don’t realistically expect the courts to mandate that a private company has to work with other private companies on their product. Like the idea of it is just crazy.

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Bruno Brito

Now if you think that’s too much? Alright. That’s fair. You can try other platforms, but they are pretty much charging the same as well. You could always try to start your own rival mobile phone sales and design your own operating system but the fact that sounds wholly and entirely unrealistic shows the sheer level of effort, time and resources already invested into existing platforms as being valuable.

That’s the main entire point here. We can’t just debate the concept of it, because this isn’t happening. What’s happening is a completely opposite move.

If we just talk about the fairness of the 30% cut, we’re thinking in theoretical utopic terms, and the entire reality passes by.

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Utakata

Yeah. Sure, in a way populist nutters trying to defend us from those “elites”. And look where that’s go us, lol…

So Mr. Sweeny, I don’t think so. You’re so transparent in this, we can see what you swallow every time you eat. As you probably are entirely aware there is much better ways of dealing with this and getting your point across. Portraying yourself as some “hero martyr” isn’t likely to improve things (almost made things a lot worse before the courts stepped in), beyond fattening your brand, ego and cult personality. Just saying.

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Bruno Brito

“It’s not just Epic being exploited by Apple, but it’s every developer who goes along with that scheme colluding with Apple and Google to further their monopoly,” Sweeney explains. “These stores are making a lot more money from creative works than the creators.

This guy is fucking with me.

I think Tim wakes up with a mission to be as petty as possible just for shits and giggles.

kjempff
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kjempff

Well what he says is correct. The problem is the messenger, not the message.

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Bruno Brito

He and his company are part of the same problem. The problem is the message because he muddies it.

kjempff
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kjempff

/sigh

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Bruno Brito

Right back at ya, buddy.

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Utakata

@ kjempff

You missed the point: The messenger is distorting the message, likely for his own exploit and gain.

It’s a known tactic the alt-facts types to use progressive language to support their own narratives. And watch people buy this shit up – it’s a type of an indoctrination really. And Sweeney is using this tactic too with this, likely for his selfish ends and not for the benefit of anyone else. So nothing will ever come good out of this. /sigh indeed.

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Bruno Brito

Kjem keeps thinking i don’t understand the concept of discussing the problem without involving the messenger.

Thing is, i’m not interested. This isn’t a debate where talking about what should be will help anyone, because Tim’s move basically ilegitimates anyone with fair criticism towards the 30% cut. He takes those too. Everything Apple does, Epic does.

This isn’t a case where we can just split the messenger from the message and pretend the message is fine without him in this case. It isn’t, and saying so is dishonesty.

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Chosenxeno .

While building their own potential Monopoly on PC. The unmitigated gall of these people…

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McGuffn

Potential? Old Man Sweeney has a monopoly on all those exclusive Epic Games Store games! And he takes an outrageous 10% cut or more on everything. WTF does he think this is, a finders fee? I demand the ability to sideload my products onto EGS even if they compromise the store and are riddled with malware, just like Sweeney did to Android.

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Sorenthaz

Not sure if you’re being sarcastic or not, really hard to tell the tone of text but the wording almost makes it sound like you could be sarcastic/non-serious.

Either way it pretty much is a time-limited monopoly on the PC market. Having to wait 6-12 months to play a new release on something other than the EGS is annoying from a consumer perspective, even if there are potential benefits (like lower cost, more content, etc) from waiting for it to eventually launch on other storefronts. And then of course you have Twitch streamers and Youtubers who try to help push the ‘Fear of Missing Out’ tactic on folks that the time-limited exclusivity crap exploits because they can profit off of folks getting suckered in to using their creator codes.

I guess long-term there can be benefits for everyone? But in the short-term it screws over consumers in exchange for boosting developers since Epic usually pays them a good amount of $ upfront for exclusivity rights, and they don’t need to make as many sales on EGS compared to Steam due to the lower cut Epic takes.

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McGuffn

Not being able to tell if i’m serious or not is a goal of a surprising number of my posts. But I do think Sweeney is a clown. He seems really close to pulling a Musk and accusing random people of being pedos simply because they don’t like his infeasible cave rescue plan.

Insufficient knowledge combined with a lot of hubris is a dangerous thing, and that’s Sweeney.

It also doesn’t help that everything he writes sounds like mewling special pleading on his own behalf.

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Arktouros

10%?!? It only costs 3% to process credit cards!

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Ozzie

What is the Epic Games Store other than a poor attempt at creating a monopoly thru paid exclusives? And that same company is supposed to free creators from Apple and Google? Makes no sense.

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PSDuckie

To use Mario Kart as a metaphor, let’s say you’re in third place, behind Donkey Kong (in second) and Bowser (in first). You are lucky enough to get a blue shell, which you throw at Donkey Kong. Is it going to hit DK? No – it’s going to hit Bowser!

Epic claiming that they’re going after Apple for a monopoly is like throwing that blue shell at DK. The monopoly simply doesn’t exist.

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Arktouros

Epic is instigating all of this for one reason and one reason only: Money.

If Epic can get the courts to declare that if tech companies (Apple) create a product for which software can be designed and delivered to customers that anyone must be allowed to install/offer whatever software they want on it then it’s basically a gold rush for major corporations like Epic.

In essence it destroys the Walled Garden approach to product design. While Sweeney proclaims consoles are different from a technical and most likely legal perspective they aren’t. It also likely impacts a number of other industries as well such as many medical and industrial devices which enjoy total ownership.

This is entirely a business decision. Epic could try to launch rival phone products, or partner with phone products but those all have tremendous history of big risk and failure. It’s honestly probably better from a cost benefit ratio to roll the dice in court than roll the dice on creating a “Fortnite Phone.” If Epic can get the courts to rule that hardware platforms can’t be proprietary and they have to allow for rival businesses to offer their own stores they can bypass the extremely expensive hardware investment that other companies risk.

That said I’m still skeptical that courts will force one business to work with another business. Generally speaking businesses are allowed to operate however they want so long as they don’t run afoul of the law and Epic has a seemingly weak case in showing Apple broke any laws.

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Sorenthaz

Yeah it really sounds like the end goal here, if they somehow get their way, is to then push this stuff onto consoles.

Which really makes no sense when you think about it. Apple products are basically akin to consoles, and console companies have full control over what is allowed on them. Somehow winning this would force Apple to allow Fortnite on its ‘console’ for all intents and purposes while getting 0 benefits from it beyond the sales of iPhones/iPads which likely won’t be bought solely to play Fortnite on them? So then they could legally force Nintendo, Sony, and Microsoft to allow Fortnite on their stores while getting no cuts from VBuck purchases and so on.

That’s why this crap shouldn’t realistically hold up. The moment you compare Apple products to consoles, which they essentially are, is the moment this falls apart even further than normal.

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Arktouros

Even if Epic specifically doesn’t use this to push this onto consoles it opens the floor for basically any major company to do so instead. Blizzard (Bnet), Ubisoft (Uplay), EA (Origin) and others have all launched their own store with their own payment processing in the PC market. Legal decisions like these aren’t just for the parties involved they impact everyone since they set legal precedent.

The only thing that hasn’t made sense to me is Microsoft backing Epic on all this. On the one hand I can see their current attitude of openness and wanting to be on any platform (and you can see the issues they’re having with Apple right now over xCloud) but on the other the long term implications of what’s being asked here is devastating to their Xbox platform. Maybe they think cause they’re shifting away from Xbox as a sole platform (pushing Game Pass to PC, console, and mobile) they think it’s fine? Not sure.

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Bruno Brito

Maybe MS is so interested in getting that sweet Playstation/Nintendo money that they are willing to risk the Xbox for it.

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Arktouros

I mean it’s certainly a possibility. MS has claimed to do a hard pivot away from console exclusivity to the point they don’t see Sony/Playstation as a rival anymore. If a decision against Apple would open the door to force Sony to allow xCloud and thus a Microsoft store onto their environment they could ramp down their hardware business for Xbox (which hardware is always a loser) and people can just buy Playstations.

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Bruno Brito

I speak as a FG enthusiast. What killed Killer Instinct as a game for the generations in EVO was the exclusivity. No one was going to buy an Xbox exclusively for KI, no matter how good that game is ( and it’s so good ). Specially since most of the other games with competitive legacy ( SF, Guilty Gear, Marvel vs Capcom, MK, etc etc ) aren’t exclusives, and don’t end up alienating customers.

I can’t speak for the rest of the scene, but i would assume is the same. I simply can’t visualize an reality where MS exclusives are so good that they make people by Xboxes for life, accepting having to deal with the MSstore. Nothing is worth that headache.