Thread by @thedextriarchy

Day 2 of livetweeting the Apple/Epic trial starts in 15 minutes. Expecting more cross-examination of Epic CEO Tim Sweeney, plus witnesses from Nvidia and Xbox, and god willing better audio. Coverage of yesterday below: theverge.com/2021/5/3/22417…

https://twitter.com/thedextriarchy/status/1389226192075726849

Court has just come into session. There’s some “sensitivity” over info from that was supposed to be sealed but was accidentally released online yesterday. Judge says there’s no point in re-sealing the documents if they’ve leaked.

Now we’re calling Epic CEO Tim Sweeney back to the stand for cross-examination by Apple. Kicking off with questions about Epic’s analytics.

Lawyer asks: “Would it surprise you to learn that the vast majority of people who downloaded Fortnite on iOS have never made any purchase of any sort on any platform?” (Estimate of around 75%)

Sweeney says no.

Lawyer is saying that only 5% of users were spending money on the App Store — is accusing Epic of punishing all the other consumers by taking a stand over in-app purchasing and refusing to come back to the App Store.

Apple is asking Sweeney about how Epic allocates expenses — Epic “operates holistically as a company … with as much synergy and sharing of people and tools and technology as possible,” doesn’t parse expenses into discrete units.

Last quote is the lawyer’s summary, not Sweeney.

Lawyer is apparently getting at the fact that Epic doesn’t separate out business expenses/revenue. Part of Epic’s strategy, for context, is accusing Apple of obfuscating its numbers by not parsing out how it makes from the App Store.

"From March 2018 to August 2020, Apple supported Fortnite's business model,” says lawyer. “And Apple supported Epic’s cross-platform play on iOS and non-iOS devices,” as well as cross-wallet policies where you can buy in-app purchases elsewhere.

“When a player did that, Apple would not receive any commission … and yet those V-Bucks would be spent by the player on the iOS device,” says lawyer. Apple permitted cross-play and cross-wallet transactions, Sweeney agrees, and not all platforms did.

Sweeney confirms that there were “significant negotiations throughout 2018” between Epic and Sony over cross-play.

Apple’s citing an email Sweeney sent to Sony exec Phil Rosenberg in 2018 calling lack of cross-play an “untenable position” — saying it would tear kids’ friendships apart and might not be legal.

Lawyer notes that Epic and Apple later reached a deal for cross-play that would include potential commissions for Sony (this was discussed yesterday) and wouldn’t let people buy V-Bucks on other platforms and use them on PlayStation.

Lawyer’s getting at the fact that Sony (and Nintendo) lock down how people can spend money through Fortnite, and Epic chose to strike a deal with Sony instead of doing something like suing.

Apple lawyer’s now introducing a speech Sweeney gave at the DICE gaming conference in 2012, apparently the one here:

Lawyer’s citing that in 2012, Sweeney said there were “too many platforms” for computing and the field would sort itself out with a platform war.

Lawyer has moved on to asking Sweeney about the benefits Epic gets from being on iOS — specifically the Metal graphics API. Judge touched lightly on this point yesterday, pushing back on Epic’s portrayal of Apple as sort of a parasitic middleman.

In fairness Epic has also made a point of saying Apple tech is great — that’s not really an inconsistency. But it’s downplayed how much direct help devs really need from Apple, beyond just building a platform and opening it up.

Pretty funny email exchange where Epic CTO Kim Libreri (aka the guy who helped invent bullet time) complains a PR quote about Metal is “a bit dry and not as hip as one would have expected from the coolest game developer on the planet.”

Apple’s lawyer is discussing the larger-scale maneuvering around Fortnite — alleges that getting Fortnite on iOS helped Epic push Microsoft to support cross-play.

Lawyer’s quoting from a 2019 Eurogamer interview here now, specifically the Stadia question: eurogamer.net/articles/2019-…

Apple’s taking advantage of the fact that *of course* Tim Sweeney is going to profess to be excited about all the awesome options for Fortnite and developers in interviews, and that rhetoric conflicts with Epic alleging that Apple is causing it substantial harm.

Judge asks about a specific quote, where Sweeney says "a great game will succeed wherever it's sold” and “developers have the real power in the industry”. Sweeney says he means on PC. “Does that mean that the opposite is true in other contexts for games?” judge asks.

“On iOS developers can’t go anywhere but the iOS store,” Sweeney says — whereas on PC, you’ve got a choice of app stores.

Apple is asking about Epic’s recent decision to host Itch.io as a store-within-a-store. Asks if Sweeney has reviewed all the games on Itch. (No.) Sweeney cites Itch’s library as “at least hundreds” of games, which is a hell of a lowball. itch.io/blog/108659/th….

The court is arguing over whether to allow some info in an unreleased document. It’s during a discussion of just how much money (hundreds of millions) Epic is prepared to lose in deals with developers.

The document apparently concerns the terms of Epic’s deal with Paradox. Sounds like we’re not going to get details on that, though Apple’s lawyer wants to discuss “general concepts” from the filing.

Still talking about return on investment for the Epic Games Store. Sweeney wrote in an email that "obviously the direct ROI scenario here is super crappy. The long-term value is in bringing consumers into Epic’s multi-game, multi-platform social and ecommerce system.”

Lawyer citing an October 2019 5-year plan for EGS. Included an “aggressive pursuit model” with heavy investment and a “winding down” one. Sweeney says “this was looking at the worst-case scenario where the store failed” and they still had to pay a minimum guarantee to developers.

The “aggressive pursuit” model had Epic turning an operating process of $15 million but a cumulative loss of $854 million in 2024 on the Epic Games Store.

The “winding down” model in 2024 had a projected operating profit of $36 million but a cumulative loss of $654 million. By 2027, a cumulative loss of $642 million.

BTW anybody who’s following me specifically for Epic/Fortnite/Apple should probably know that outside this trial I spend most of my time tweeting about immersive sims and Section 230. In the words of Lelush, don’t love me, you’ll get no results.

Apple is back on the sinister implications of Project Liberty, Epic’s plan to sneakily add in-app purchases to the App Store. Epic has never really denied that it was sneaky!

Sweeney wrote an email about the Apple 30% charge saying specifically he wanted to “solve this problem before AR [augmented reality] takes off.”

(I also tweet a lot about VR/AR outside the trial I guess? So you’ve got that to look forward to.)

We’re now getting into a message that Sweeney wrote to Phil Spencer from Microsoft, telling him he’d be pleased with the hotfix strategy.

"Epic has certain plans for August that will provide an extraordinary opportunity to highlight the value proposition of consoles and PCs, in contrast to mobile platforms, and to onboard new console users."

This email came out previously — it’s the one that referenced “fireworks,” you can find it as part of a Wall Street Journal article here wsj.com/articles/fortn…

Lawyer’s now discussing the Nineteen Eighty-Fortnite ad that satirized Apple as part of Epic’s PR strategy theverge.com/2020/8/13/2136…

(Re: earlier tweet, that email quoted was separate from the “fireworks” quote email, but they’re part of the same conversation.)

Lawyer reiterates the fact that Sony and Microsoft don’t have cross-wallet capabilities, while Apple does let you buy V-Bucks from elsewhere (say, Epic’s site through Safari on iOS). Judge jumps in.

Judge asks why Epic didn’t let people buy V-Bucks on its website via iOS before Project Liberty. “It wasn’t a very attractive option for our customers,” Sweeney says. Had they even started working on it an option? “We hadn’t programmed it.”

We’ve now moved back to counter-cross-examining by Epic’s lawyer.

We’re talking about the commission structure for Sony/Nintendo/Microsoft, Epic’s asking if he knows whether console makers negotiate lower rates than 30%.

Sweeney’s talking about how Epic has negotiated with Microsoft holistically, but Epic has “never negotiated a different commission structure with the console makers, to my knowledge.”

Taking a break for a 20-minute recess, then we’ll be back with more Sweeney.

We’re back — Sweeney delving into the difference between a console and a general-purpose device. “A user doesn’t expect the ability to plug in a keyboard” or other similar flexibility on a console, says Sweeney.

Epic lawyers are arguing with the judge over whether they’re drawing a meaningful distinction between computers/consoles via a somewhat fine-grained hypothetical about whether you could check your bank balance at the doctor’s office if you loaded a banking app onto a console.

I understand what they’re going for here, but this is getting pretty tortured.

I can’t see this personally, but the courtroom has actual consoles as exhibits, and Epic’s attorney is asking Sweeney to explain how to attach controllers to a Nintendo Switch. “You can see I’m not a Switch player,” says Sweeney. “Now the whole world knows,” the judge jokes.

We are way down a garden path of trying to explain why game consoles aren’t equivalent to iPhones because of their controller configuration or size or various other somewhat random-seeming distinctions Epic has come up with.

Sweeney says if he could give the 2012 DICE speech now, he’d give a different one. Epic’s lawyer is leading him to talk about open platforms, and the difference between an open platform and simply allowing cross-play.

“Do you know whether or not Google Stadia is in existence today?”

Judge objects that this would be confidential info. Lawyer says there’s public reporting it was shut down.

Sweeney: “My understanding is that after a public launch, Google Stadia has been very significantly scaled back.”

Here’s what he’s plausibly referring to: theverge.com/2021/2/1/22260…

Judge is a little skeptical of the idea that Fortnite is a non-gaming-exclusive virtual world rather than just a game with extra perks like concerts. “People were there in their kinda game mode, weren’t they?"

“Do you have any data that anybody goes to the concerts that aren’t already Fortnite players?” judge asks.

Sweeney says there’s an influx of users around concerts.

We are in a legitimately delightful debate right now about the distinction between an interactive virtual world and a video game. I live for this.

Sweeney keeps bringing up the difference between concerts and competitive play, but judge notes that “people play games all the time that are not competitive.” She asks if it’s fair to compare Fortnite to Ready Player One (the movie.)

“I haven’t seen any evidence here presented in how this actually looks on your game platform, but would that movie be the most readily acceptable analogy to what is going on?”

“I think Ready Player One is a great movie example. There’s also Snow Crash the book,” says Sweeney.

"How would you define a game?” the judge asks Sweeney.

“A game involves some kind of win or loss or progression, whether it’s an individual or a social group.” A game builds up to some kind of “outcome” or something quantifiable like a score.

hell yes formalists and narrativists let’s all go fight

Epic lawyer has moved on to talking about ARKit, something Apple has made unavailable to web apps.

Lawyer is talking about why Sweeney has called mobile in-app purchases an “existential issue.” Sweeney goes back to his definition of Fortnite as a metaverse rather than a game.

Sweeney: “The long-term evolution of Fortnite will be opening up Fortnite as a platform for creators to distribute their work to users … and creators will make the majority of profits.”

“With Apple taking 30 percent off of the top, it makes it very hard for Epic and creators to exist in this future world.”

Epic’s lawyer notes that buying V-Bucks through the website is inconvenient. Judge jumps in, asks if Fortnite’s userbase is mostly young. “Isn’t that a responsible way to deal with a young client base? Why should we want them to have the ability to just on impulse buy something?”

“What you’re really asking for is the ability to have impulse purchases,” judge says.

Sweeney. “Yeah. Customer convenience is a [paraphrasing lightly from memory: huge factor for us].”

Totally irrelevant aside about Tim Sweeney: in the ‘80s he created the freeware design tool ZZT, which was a huge inspiration for writer/designer Anna Anthropy, who is ironically one of the biggest proponents of expanding people’s perception of what a “game” is.

To be clear I think we shouldn’t take this testimony as Tim Sweeney’s true philosophical position on games or anything. Epic is explicitly trying to argue that this isn’t just a case about gaming, therefore Fortnite isn’t a game.

All right. We are *done* with Tim Sweeney! As a wrap-up, judge asks what happens if he loses. “Apple would definitely have the right to remove their developer program for any reason or no reason. If Apple cut us off, we would have to live with not supporting the iOS platform.”

Our next witness is Benjamin Simon, the CEO of Yoga Buddhi, which makes a yoga app. YB submitted some exhibits where customers keep emailing because they discover it's got a cheaper price outside the App Store, but it can’t advertise that in-app.

Simon’s scheduled for a 1-hour examination and 30-minute cross-examination, for the record. Compared to Tim Sweeney’s 6+ hours.

As expected, Simon is laying out some well-known complaints about the App Store: you have to get updates reviewed, which delays them; you can’t support refunds personally; and you can’t tell users inside the app that they can sign up cheaper elsewhere.

“We had no ability to negotiate these terms, and we feel like we can’t grow our businesses without an iOS app,” Simon says of policies.

“Apple in addition to prohibiting us from implementing an additional payment method, does not allow us to direct users to a separate payment method or even add a link to our website.” So roughly half the users simply pay (substantially) more to sign up through iOS.

On Android, about 10% of users use the in-app purchasing option. Why keep offering this option for a higher price on iOS? “We don’t feel like we have any other choice.”

Simon says that Apple has rejected updates that add even very subtle links to the website where you can find lower prices.

Google had a similar policy and removed Simon’s app, but it does apparently let them tell users there’s a cheaper price elsewhere and a much higher proportion of Android users sign up on the web.

“We’re restricted in our ability to communicate with our customers from within our product” thanks to Apple’s policies, says Simon.

Google isn’t yet enforcing the “no linking to the website” rule, Simon says — it enforced it briefly (i.e. the removal) but it delayed implementing it. Helping explain the disparity in signups.

When the company ran an experiment where some people on Android didn’t get shown the link, they saw 28% fewer subscriber signups in that group.

A lot of the harm questions here involve weighing the importance of friction points. Down Dog (the Yoga app) can send emails to customers, for instance — it’s just not able to advertise right inside the app. Epic and Apple have vastly different estimates of how much that matters.

On one hand there’s “come on just work a little harder and read the email.” On the other there’s a running debate about the importance of little UI nudges to online behavior — see the whole debate about “dark patterns” in social networks.

Now we’re moving to one of Apple’s big talking points: that third-party payment processing introduces security risk. Lawyer asks if web signups have caused any security issues — Simon says no. And who provides a better payment processing service: Apple or Stripe? “Stripe."

Down Dog wanted to offer a “true” free trial that didn’t ask for subscription info, instead of what Apple required, which was an autorenewal with a trial period. “We don’t want to make our money from users who forget to unsubscribe,” says Simon.

“They basically just doubled down and said ‘no, you are in violation.’” Down Dog tweeted a screenshot of the interaction, then Apple called and recanted. “We were correct and the guidelines didn’t prevent” that “true" free trial. They ended up offering it.

Would they have done this two years ago? Probably not, Simon says. "We had a substantially larger userbase” at this point. "I also, I think users hate autorenewing trials, so this issue in particular, we were likely to get user support.”

Down Dog matters here because it’s dependent on iOS in a way Fortnite isn’t. We’re going to see a much broader attack on the App Store in the days to come, including a deep dive into its app review process.

Huh — Simon says Apple refused to let it prominently mention COVID-19 in an update that appeared in its app, because it worried the topic —including just mentioning lockdowns — would be “potentially triggering.” This was the day before it released its own COVID-19 screening app.

Finaly, we’re going to take a 45-minute recess. Judge Rogers has very strictly warned Ben Simon to not talk to anybody (particularly either side’s lawyers) during this period. Rough! Anyway, back at 4:15.

Cross-examination of Ben Simons has resumed, after some conferring over redaction of documents.

Apple starting cross-examination by having Simon establish that Down Dog does not compete with gaming apps, including Fortnite. Lawyer also asks whether he considered joining an existing class action case brought by developers against Apple.

Apple went to the Supreme Court in a big class action case to argue developers didn’t have standing to sue it for antitrust violations; the court disagreed in 2019. theverge.com/2019/5/14/1861…

(Refresher: Down Dog is the app made by Yoga Buddhi, whose CEO is currently testifying. It’s slightly confusing, and also I keep almost typing the company name as “Yogi Berra”)

Apple’s taking on the claim that Down Dog was rejected for featuring COVID-19 content. It says the real problem was that it had just announced a requirement that only health orgs could include content covering COVID-19. I.e. what we covered here: theverge.com/2020/3/14/2117…

Judge is asking, similar to discussion with Sweeney, whether you can just go to Safari and pay for Down Dog. Unlike Sweeney, Simon says it’s actually “easy” to do — iOS Safari saves credit card details and streamlines login.

Testimony’s wrapped for Simon. Epic is now calling its witness Aashish Patel, director of product management at Nvidia.

Patel is here to talk about GeForce Now, Nvidia’s streaming game service. Lawyer’s asking for a quick history of cloud gaming and explanation of its logistics.

Now we’re getting into some meatier stuff: lawyer asking why Nvidia doesn’t offer a native app for iOS, just a web app. Nvidia says Apple rejected it.

This is tied to a broader controversy from last year — Apple put significant restrictions on cloud gaming apps, including nixing anything that seemed too much like a store-within-a-store theverge.com/2020/9/18/2091…

Nvidia has mostly stayed quiet about the Apple rejection. Now, it says it submitted the app through the approval process. It approved the app, then a few days later rescinded approval. They “provided a pointer to their application guidelines” and said the app was not conforming.

brief confusion over someone maybe giving the judge the wrong binder of evidence. whole lot of binders in play here.

Lawyer asks: Does Nvidia have limits on GeForce Now capacity? Yes, says Patel.

What happens if users overload it? Users will have to queue till capacity is available. Paid users are favored for getting that capacity over free ones.

What percent of GeForce Now users are in the free tier? “I would say it’s the vast majority.”

Based on data from November, less than 2% of users play GeForce Now on both an Android and an iPhone device.

Apple comes out on the attack. Accusing Patel of “wanting Epic to win” for retweeting an Elizabeth Warren tweet critical of Apple

Apple is arguing that even without a native app, iOS users are being drawn to the platform, and problems like latency and server capacity apply on both native and web experiences. Patel says “I honestly don’t have the technical depth” to say precisely how they manifests.

Patel is basically answering “I don’t know” to questions about whether multiplayer works across GeForce Now and other platforms. Which seems… weird?

Latency is “not preventing folks from signing up and enjoying your service,” Apple lawyer says. Cites improvement in broadband between 2012 and now, or even 2 years ago and now. “I don’t have numbers to state that as confidently as you are,” Patel says of the latter.

Patel kind of fumbles through Apple heaping quotes from good reviews of GeForce Now on him.

I assume the actual motivation is “Patel doesn’t want to perjure himself and he hasn’t read every single GeForce Now review recently,” but it’s fun imagining he’s incredibly embarrassed by praise and mumbling “sure i guess, not a big deal, y'know"

For Apple it’s a win if Nvidia is providing an amazing service through the Safari browser outside the App Store, obviously. “Has Apple done anything to stop Nvidia from offering GeForce Now on Safari?” lawyer asks. Patel says no.

We’re wrapping up again for the day. Court’s going back to a sealed session, we’ll be back around 11am tomorrow.