The TL;DR for Epic Vs Apple's Second Day in Court

Day 2 of the Epic Games vs Apple court case is here. Here’s a brief summery of the cool stuff we learned today:

On monday, we got a pretty good look at Epic Game’s money situation, including the couple million they spent giving games away and the several billion they got from Fortnite alone. Today, we got another number — over the past three years, they’ve spent over a billion dollars securing exclusive rights to sell games on the Epic Game Store, either temporarily or long-term. That’s a lot of money, but in the same document, they detailed exactly why they were being so aggressive: they wanted to secure 50% of the PC gaming marketplace. A tall order, which the document even admits is the case by acknowledging that if Valve tried to “respond” to their aggression (which so far, it hasn’t), their share would likely drop to 35%.

Another interesting tidbit from the same document: they actually predicted what would happen if they failed. Called the “Winding down” model, they suspected they would capture 20% of the gaming market at their peak, and then it would trickle down to a solid 8%. Not a bad percentage, considering how many storefronts there are and how big Steam is, but… after spending a billion+ on exclusives and free offers, it would certainly be disappointing.

That was the only money-based revelation to come at us today: most of the other interesting tidbits actually surround CEO Tim Sweeney, as the court poured over several emails the man has sent to other heads of the industry in an effort to advance their cause.

In one email, he tried to convince Xbox head Phil Spencer to allow Xbox players to play together online for free, which would mean you wouldn’t need an Xbox Live account to connect and play with your pals.
 

“Long ago, we talked optimistically about the possibility of subscription-free multiplayer on Xbox…If this is coming, please consider the possibility of timing the program to support Fortnite Season 14 launch on 8/27. This launch will follow the confidential Fortnite Mega Drop 20% price drop that’s coming in mid August, and will be our biggest and best Fortnite season thanks to a huge collaboration with Disney/Marvel.”

It’s not hard to see why he would advocate for free multiplayer: it would mean more people on Xbox could play Fortnite without any kind of paywall. But even if his motives are transparent, the idea of consoles allowing you to play online for free again is certainly an appealing one.

The next email he sent was to Ubisoft CEO Yves Guillemot — this one wasn’t trying to convince him of anything, it was just an apology for a back-end error that allowed people to pirate The Division 2 at once unprecedented levels.
 

Dear Yves,
 
I’m writing to apologize for the shortcomings in our Epic Games store implementation and our Uplay integration.
 
In the past 48 hours, the rate of fraudulent transactions on Division 2 surpassed 70% and was approaching 90%. Sophisticated hackers were creating Epic accounts, buying Ubisoft games with stolen credit cards, and then selling the linked Uplay accounts faster than we were disabling linked Uplay purchases for fraud.
 
Fraud rates for other Epic games store titles are under 2% and Fortnite is under 1%. So 70% fraud was an extraordinary situation.
 
To stop the fraud, we disabled purchasing of Ubisoft games. We will make our best efforts to restore service as quickly as we can. This depends on a real-time system for disabling refunded and fraudulent purchases on Uplay, and anti-fraud improvements in Epic’s service. This work will likely take at least 2 weeks to complete.
 
The fault in this situation is entirely Epic’s, and all of the minimum revenue guarantees remain in place to ensure our performance.
 
I’m sorry for the trouble,
 
Tim Sweeney
Epic Games

Nothing terribly exciting about that, unless you get some sort of small catharsis for watching one billionaire apologize to another billionaire in a terribly professional fashion. That said, if you want some delightful cringe, then the final email should satisfy: in it, Tim Sweeney tries to convince Apple’s CEO, Tim Cook, to consider reforming their marketplace.
 

Hi Tim,

Y’all should think about separating iOS App Store curation from compliance review and app distribution. The App Store has done much good for the industry, but it doesn’t seem tenable for Apple to be the sole arbiter of expression and commerce over an app platform approaching a billion users.

Compliance review could be limited to API compatibility, safety, data privacy and fair disclosure practices. Compliant apps could be signed to allow open distribution via web or by confirmed invocation from another app, with no restrictions on engaging in commerce directly with users.

Tim Cook’s response? He forwards the email to colleagues Phil Schiller and Eddy Cue and asks “is this the guy that was at one of our rehearsals?”. In Tim Cook’s defense, this was back in 2015, well before Epic Games and Fortnite were household names, but still — oof.

Anyway, that’s the long and the short of it this time.