The monumental Epic Games v. Apple trial has concluded, and throughout it, key revelations came to light. The two mega powers squared off over Apple’s treatment of app developers, a fight that began when Apple removed Fortnite and other Epic apps from the App Store last year. The long trial has finally ended and the two parties await a decision from the judge.
There’s a lot to process following the conclusion of the trial, including major talking points about the business of all companies involved. Here are all of the key takeaways from the Epic versus Apple trial.
On the first day of the trial, more than 200 people dialed into the public call line and screamed for around 20 minutes, as court clerks attempted to mute the callers. According to The Verge, many of the callers were kids who screamed “free Fortnite” and “bring back Fortnite on mobile, please judge.” The result was a chaotic mess, but at 11:30 a.m. ET, court officials managed to bring order to the court.
This comes after Apple removed Fortnite from iOS due to Epic Games’ implementing its own in-game purchase system that bypassed the App Store. In the wake of Apple’s decision, Epic began rolling out a “Free Fortnite” marketing campaign, which became a rallying cry for many players.
In 2018, when Sony was under fire for its opposition to Fortnite crossplay, Epic Games worked to reach a solution. That solution, as revealed during the beginning of the trial, was for Epic Games to pay Sony a higher cut to bring Fortnite crossplay to PlayStation platforms.
While on the stand during the start of the trial, Epic Games CEO Tim Sweeney explained that Sony gets more of a cut than other platform holders for crossplay functionality.
“Sony has a policy that requires if the ratio of payments across platforms for a given PS user gets out of sync with the playtime, then we have to pay them a commission on other platform revenue,” Sweeney said. “So if someone were primarily playing on PS but paying on iPhone, they’d [inaudible] compensation to Sony.”
Although it’s common for all platform holders involved to get a cut when Fortnite V-bucks are purchased, Sony reportedly has been getting more than others since 2018, per its contract with Epic Games.
It’s not surprising that Fortnite performed well for Epic Games from 2018 to 2019. Through financial documents that were made public as part of the trial (as relayed by The Verge), we learned that Epic Games earned over $9 billion in revenue from Fortnite within its first two years on the market.
It’s unclear how much of the company’s profits were attributed to Fortnite within that time, but Epic Games reported profits of $5.5 billion during that two-year span. What is clear is that Epic earned more from Fortnite than any other of its video game-related businesses from 2018 and 2019. That includes the Epic Games Store, which is reportedly operating at a loss, per the documents.
Fortnite is known for its licensed (and original) character skins that are the driving force of the game’s revenue. Since its launch, we’ve seen character skins for God of War’s Kratos, Halo’s Master Chief, Batman, The Mandalorian, and more. As part of the trial, an internal document that outlined plans for Fortnite’s future was made public, and it features details about a basketball minigame and new character skins that are in the works.
Epic has evidently looked into creating skins for Samus Aran, Naruto, Dwayne “The Rock” Johnson, The Bride from the Kill Bill films, Snake Plissken from the Escape from New York movies, and others. The document also detailed plans for an NBA collaboration, with the aforementioned sports minigame referred to as “a Fortnite version of arcade basketball.” This collaboration would also include a character skin for NBA player LeBron James.
During the beginning of the trial, a piece of evidence was shown that featuring details about Project Storm, a streaming service from Walmart. According to Epic Games’ co-founder Mark Rein, a demo for the service was playable on an Android device and is apparently around the same power as a PlayStation 4. Walmart supposedly has plans for a controller clip that would attach to a mobile device that supports the service.
Per The Verge, a concept image of the service shows that Walmart planned to partner with publishers that have game launchers such as Uplay, Origin, Steam, and others. Project Storm’s proposed UI looks like a lot of other streaming services, with a list of games and a search function. Project Storm would reportedly allow for cloud streaming, as well as downloads (which should circumvent any latency issues).
At this time, it’s unclear if the project will actually see the light of day. Walmart has yet to officially announce the service, so it’s possible it’s still a ways off or that it won’t launch at all.
During the Apple vs. Epic Games trial, Xbox vice president Lori Wright was called in as a witness. Epic attorney Wes Earnhardt asked Wright “how much margin does Microsoft earn on the sale on the Xbox consoles?” Wright responded “We don’t. We sell the consoles at a loss.” Later on in the questioning, Wright was asked if Microsoft has ever made a profit on a console, to which she responded “no.”
It’s not uncommon for console manufacturers to sell hardware at a loss. In Microsoft’s case, the company wants to use its hardware to drive software sales, along with services like Xbox Live Gold and Xbox Game Pass. These services are huge points of profit for the company. As of 2021, Xbox Game Pass reached 23 million subscribers, along with 100 million monthly active Xbox Live members.
Many often point to the Nintendo Switch as an exception to selling consoles at a loss. Nintendo famously sold its Switch console for a profit starting on day one, which is fairly unusual in this business. Frequently, a console will become profitable over time as parts become less expensive to produce. But for Microsoft, this is not the case.
On Monday, May 24, the Apple vs. Epic trial concluded, but that doesn’t mean a final decision will be made quickly. As Judge Gonzalez Rogers stated, there’s “a lot of material” to evaluate before reaching a conclusion. In total, there are 4,500 pages of testimony.
Judge Rogers made a joke, saying she might not reach a decision until August 13, which is the anniversary of the Fortnite hotfix that sparked this trial in the first place.
“Not everybody got the joke,” the Judge said. “I’m not promising to have this by August 13th, but I want to get to this while the memory of the testimonies [and] the arguments are fresh, but we do have thousands and thousands of cases to review.”
We will update this post after a decision has been made.
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