Epic v Apple: Fortnite at ‘full penetration’ on console, more industry profit details, and text descriptions of trailers

    
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It’s the stupid gift that keeps on stupid giving. It’s the lawsuit that might have industry-wide shockwaves. It’s a trial that has seen whether a banana not wearing clothes is inappropriate was discussed in a court of law. It’s the Epic vs. Apple trial, and once more there are a variety of news pieces to be plucked from the affair.

  • The trial saw some interesting testimony entered into the record, starting off with Epic Games’ marketing director Matthew Weissinger claiming that Fortnite has “basically full penetration on console and mobile offers the biggest growth opportunity.” According to his testimony, the game saw 2.86 billion hours played when it was on iOS, and the cutoff from that mobile market has been harmful to the company.
  • In other testimony news, both sides have been using experts and academics to argue their points. One of those experts brought on by Apple was University of Pennsylvania Wharton economist Professor Lorin Hitt, who testified that buying microtransactions for various games outside of the App Store was “frictionless.” What’s of note here is that cross-examination appeared to see Hitt’s argument crumble, as Epic’s counsel tried to purchase items for Candy Crush Saga and Clash Royale and was met with some resistance.
  • There was an attempt by Apple to have an investigation launched into the credibility of testimony provided by Xbox VP for gaming Lori Wright. According to Apple, documents to support Wright’s claims that Microsoft doesn’t make money from console sales but instead earns money from digital sales like Game Pass were not provided, but Epic attempted to circumvent that assertion by providing exhibits to back up Wright’s claims in a counter-filing. Microsoft is due to file a response this Monday, May 17th, while Apple will have until May 24th to file a reply, after which the court will decide whether to grant Apple’s investigation request.
  • Once again the trial has offered some industry insight that probably isn’t intended for public consumption overall. Specifically, a claim that third-party devs have made $500 million from Epic Game Store to date, word that Epic apparently has 14 projects in development, and some redacted Microsoft documents that stated publishers capture the majority of industry profit at 66% — platforms in closed ecosystems like console or mobile generate 39 – 46% of segment profits, while open ecosystems like PC generate only 5%.
  • Finally, in the goofy section of trial news, there’s apparently been some courtroom document descriptions of Fortnite trailers. Because anything can be entered into courtroom documents, apparently.
sources: GamesIndustry.biz (1, 2, 3), Gamasutra, Kotaku
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Bryan Correll

Does the banana still have its peel?

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Life_Isnt_Just_Dank_Memes

Headline of the year. I’ll brook no argument against this.

MilitiaMasterV
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MilitiaMasterV

It’s almost like the legal system has been jury-rigged to favor a certain group…

…while not even being able to comprehend what’s going on in technology and reality nowadays.

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Vanquesse V

This case is so funny to watch, and no matter the end result this will end up being an important event historically simply due to just how much dirty laundry is being put on display. It’s as if all the companies in gaming were chilling around the campfire, those two got angry at each other and decided that the best course of action was to each boxes of live ammo into the fire.

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Danny Smith

Even people i know not into games are saying to me “what stupid shit did Sweeney say today?”. Like this whole thing feels like he expected the iphone fortnite to milk zoomers and cover epic store losses at first but now all the dumb shit he has said has been so damaging to his reputation.

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Vanquesse V

With all of the bullshit apple has done towards gaming, games and gamers over the years I can’t comprehend why anyone would stan them.

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Lily Cheng

Gamers don’t need to stand by Apple to understand that Epic is still the one with a frivolous case here. If you remove your personal bias against Apple for reasons only you are aware of and look at things overall you may understand.

If you think Epic winning this case somehow is going to be a great boon to gaming…then oh boy do I have a bridge to sell you…

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Vanquesse V

does gamers stand to gain anything by an apple win?
does gamers stand to lose anything by an epic win?

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Jeremy Barnes

No.
No.
Epic was the wrong company to bring a suit against Apple. Sweeney didn’t care as he hoped it would cause them to settle with him and allow in-game purchases without Apple’s cut. As usual, he was very, very wrong.

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Danny Smith

Thats the thing: nobody is. Its not david vs goliath its literally corporate guy named Tim vs corporate guy named Tim. The only difference here is Sweeny clearly gambled on something and lost and is just making a huge jackass of himself and he could just stop talking and let the lawyers try and do their work but he just can’t keep his mouth shut like apple is doing.

I mean fuck he had merchandise and a finished, rendered cgi trailer -which if you dont work with cgi and video development takes days- ready hours after doing what he knew would get fortnite removed to try and crybully tactic his way to special treatment for what the documents attest was the exact projected earnings that would offset the epic stores losses. Quite the coincidence huh?

He played an obvious game and lost. You dont need to like apple at all to call him a complete idiot.

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Schmidt.Capela

Another interesting tidbit is that Epic got David Evans, chairman of Global Economics Group, to testify that the relevant market in the lawsuit is just the App Store. Meanwhile Apple got MIT economist Richard Schmalensee to not only testify that the relevant market is all stores that sell games — including mobiles, consoles, and so on — but also that David Evans’s expert opinion goes against much of the previous research Evans has previously published in the area.

What makes it interesting is that Evans and Schmalensee have collaborated in writing books and articles that the Supreme Court has extensively quoted from in antitrust decisions. So this is a fight between two top tier expert witnesses that have been research partners for much of their careers, each basically saying the other is being less than truthful.

Why this matters: because if Epic loses on the definition of the relevant market then the lawsuit is toast. Adopting as the relevant market the whole gaming market means that Apple does not have, and never had, monopoly power.

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Arktouros

Based on what the judge has questioned/said so far in the trial I think she’s going to uphold that Apple isn’t a relevant market for monopoly purposes and it doesn’t have to allow for other shops but that it can’t prevent apps from advertising lower prices elsewhere within the apps themselves.

Otherwise the whole Hitt testimony was crazy embarrassing for Apple. He had a whole research team and couldn’t land what should have been a slam dunk example as there are examples that are pretty frictionless.

The console claim that they don’t make a profit on console sales is a business decision on their part. They could sell consoles for $1000 to make a profit like Apple does off of it’s phone devices but then they wouldn’t sell as many consoles. Just like Android phones, which are often times much cheaper than Apple phones, quickly gainined market dominance as a result of that. Really Microsoft is playing with fire on this one and all it’s arguments are super weak.

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Bruno Brito

‘full penetration’

Why.