Tim Sweeney: observation

Transcript context

…I had a quick chat with Matthew. He asked me to ask you this question of why don’t more companies fight Apple in the way openly and totally as Epic has been? What makes you Epic so unique in this regard? And I should say, I think everything you said I agree with fully. I think what Apple is doing is just wrong. I think Apple, in many dimensions, is an incredible company. They have brought so much good for the world. In this regard, I just think it’s straight-up wrong what they’re doing that they’re not providing the value of 30%. And even if they were the monopolization, the centralized control without competition is wrong. Anyway, why are you fearlessly Apple on this and other companies don’t seem to want to step up? All companies are terrified of Apple because Apple can destroy their business. Epic was in a unique position with Fortnite, first of all, having the biggest game in the world at the time we started the fight with Apple. And second of all, having a majority of our users playing on PC and console meant that if we lost access to iOS during a fight, then we would still be able to survive. That set Epic apart. Spotify, Facebook, you name the top 10 mobile apps, I think none of them would be able to survive without Apple. Literally, their business would be destroyed if Apple blocked access to them. And Apple is incredibly clear with developers that they’re willing to deprive all users of access to any app if they get in a fight. And if you look at how they dealt with Epic, they were not just legally maneuvering with the intent of winning the court case against us. They were also sending a message to all developers in the world. “We will destroy your business, or we will try our best if you fight us.” And a very small number of vocal developers have been willing to speak up, and Apple was actually refrained from crushing their businesses when they weren’t violating any Apple policies. And that took a bit of discipline, which I think is also amount of calculation by Apple. They couldn’t survive being seen as the company killer, that, “If you criticize this will crush your company.” But the other thing Apple has that they can and will readily deploy against every developer is soft power. When they take 30%, and advertising is so expensive, soft power by Apple like approving your updates faster or slowing down all of your updates by a couple of weeks can also have a dramatic effect on your ability to compete successfully. And Apple, it’s a very long history of playing cat-and-mouse games with developers. It’s like, what, a developer isn’t in Apple’s good graces, so just slow down the updates. So they’ve been slowing down updates for several major tech companies, sometimes for weeks, sometimes for months, without all going under the radar because everybody’s afraid to challenge them publicly. And so, Apple’s wielding a soft power can change a company’s economics for the worse enough to deter almost any public company. And Epic is in the fight because I firmly believe that something like the metaverse will only arise. It’s something like a billion-plus user real-time 3D social ecosystem that grows to encompass potentially all or most major games by all major developers tied together into an open economy where they all participate as peers, and they all compete to give users the best deals, and they grow and do business with their customers directly. That thing can only exist if the and Google gatekeeping monopolies are lifted. as peers, and they all compete to give users the best deals, and they grow and do business with their customers directly. That thing can only exist if the and Google gatekeeping monopolies are lifted. And it’s not just the 30% fees. 30% fees are economically ruinous, but they impose other levels of control. Apple prevents all web browsers on iOS from implementing web standards better than Apple does. So, Apple has really limited data storage capabilities and 3D graphics capabilities on the iOS web APIs. So APIs, you can access from web apps running within a web browser, and that’s to intentionally cripple those apps to ensure that they can’t possibly compete with native apps. And by depriving web apps of those features, they prevent web apps from being competing with native apps. Well, Apple, if they treat the metaverse the way they treat the web, they’ll say, “You can only use Apple’s metaverse engine. Unreal Engine is disallowed.” And then they can impose all of their own limitations on the metaverse to force all commerce through Apple or force it to be so uncompetitive and lousy that it can’t compete. And they have this giant array of these anti-competitive techniques that they use to disadvantage other app developers, saying only Apple can build certain kinds of apps or only Apple can integrate certain features in Europe, even where the DMA law requires Apple to allow competing stores, they say, “A store can only be a store. You can’t build a store into Facebook, you can’t build a social network into a store. A store must only be a store because a store that’s more than a store might be able to compete with us more effectively.” It’s just a giant… To use the Soviet term, it’s a defense in depth strategy where they’ve constructed a massive series of barriers. Each are fatal to any attempt to compete so that even if one barrier is overcome, the others remain in place and shut down the whole scheme. And that’s playing out in Europe, where Apple has enabled us to launch the Epic Game Store but has made it so difficult and uncompetitive both for Epic and for clients who we want to do business with that it has no chance of success until the European Union starts to really enforce the DMA law and impose harsh and serious penalties on Apple to force compliance.…

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