Thread by @nickstatt

Epic v. Apple Day 5 kicks off at 111:15AM ET. Wrapping testimony of Apple's Trystan Kosmynka and then onto some Epic execs. Here’s today’s list:

- Kosmynka, senior director of marketing / app review
- Steve Allison, EGS chief
- Matthew Weissinger, Epic VP of marketing

Kosmynka is being asked to define the difference between Roblox, Minecraft, and other games.

"There’s experiences within Roblox that we did not look at as a game,” Kosmynka says.

"I don’t understand the distinction your making,” the judge says.

"Allowing a store within a store on the app store would create safety issues?”

"Absolutely," Kosmynka. Apple trying to establish Roblox as not a store within the App Store, but of course Roblox also gives 30% of all in-game purchases to Apple so there’s a reason Roblox can exist

We’re pretty deep in the weeds with Kosmynka right now explaining various intracasies of app review and how Apple analyzes code before it's approved. It is not the most riveting of testimony!

Okay this is pretty fascianting: Apple has a testing tool, Mercury, that runs static and dynamic analysis on apps submitted for review. Apple doesn’t receieve soure code, but it’s able to see inside these apps to check for abuse or hidden code.

Here’s some documents submitted to the court regarding App Store review. Some interesting stats — 33-36% rejecting rate from ’17-’19, and around 4.8-5 million apps submitted per year.

"Some take hours, some up to a minute. Many of our app submissions are updates,” Kosmynka says of the variety of submissions from developers.

Okay, so Apple likes “explorers” and musicians for its App Review codenames. Now we have Columbus, in addition to Magellan, and Mozart.

"Purpose of Columbus was to heavily invest in app review automation and efficiency,” Kosmynka says.

Kosmynka asked to reveal the rejection rate of App Store submissiomns for 2020. He says it’s 40%, higher than the past three years by a give or take 1-2 percentage pointt per year.

Kosmynka also asked about 2020 App Store rejections for privacy violation. Says 215,000 submissions.

Kosmynka says he “takes offense” to App Store review being considered a “sham.”

With regard to Fortnite hot fix: "The App Review re-review process took the appropriate actions to make sure that app was no longer on the store, not in compliance with the rules.”

Is TikTok a game? I’m not sure why this is coming up exactly.

"Tiktok itself is not a game.”

Do you consider the challenges within Tiktok a game?

"I’m not personally familiar” with the challenges.

I guess we’re back on game ontology.

Interesting stat just revealed in court: App Store receives roughly 100,000 app submissions per week, and about 40% per 2020 rejection rate get turned away.

Epic’s lawyer trying to establish how major a factor privacy is in App Review rejection. Lays out how 215,000 rejections from 7 million submissions in 2020, or about 2-3%.

Kosmynka now being questioned by Epic about scam subscription apps that slip through App Store review which Kosmynka has called “shocking” privately. He also characterizes these slip throughs as mistakes.

Kosmynka getting grilled about school shooting apps that slip through App Review. He says in an email ready to the court that he was "dumbfounded with how this could be missed.”

Clearly App Review isn’t perfect. But I guess it will depend on how much imperfection is permissable

Uhhhhh Epic lawyer brings up an app that, if I heard this correctly, is called "illuminati eye rape app” and whether Kosmynka is aware of it.

“…No,” he says, audibly confused.

Kosmynka asked whehter App Review is unneccesary because of mistakes.

"It makes me believe we have to continuously be better. These mistakes came from customer and developer reports. That tells me our store is a trusted place to get apps and this is an issue.”

"We work diligently to try and close those loopholes,” Kosmynka says. Without the systems and people to catch offending apps, iOS would be a "free-for-all.”

“It would be incredibly dangerous to customers, to kids,” he says.

Epic’s lawyer brings up macOS, a key point for its argument that iOS should be open like other general computing platforms.

“The safety on Mac is superior when downloading apps from the Mac App Store,” Kosmynka says.

Very critical line of questioning from the judge, about whether Apple’s lack of competition on iOS for app stores stifles innovation in in app review.

Kosmynka says Apple looks at Android and aother app stores to see how they approach scams, fraud, takedowns, etc.

Oh hell yeah Judge Yvonne Gonzalez Rogers is now saying Kosmynka needs to explain why Roblox doesn’t offer what Apple would consider games, because it doesn’t make sense.

How many app developers are just going to say their app isn’t a game because they say it’s not?

Seems like you could get away with that so long as Apple insisting developers self-classify their apps.

🤔

https://twitter.com/mortenpremier/status/1390739365488250883

Now we’re onto Steve Allison, general manager of the Epic Game Store.

He’s being asked to explain the old-school retail model for selling video games, which… still exists lol because the video game industry.

This is seriously interesting stuff. Allison explains how retail stores used to split revenues and profit with game makers.

A $50 sale would net a publisher/developer $42, he says. But the publisher/developer would have to cover cost of distribution and other costs.

Allison says in the old retail model, a publisher/developer woudl end up taking home about 20 percent of a sale after factoring in all the costs of distrbution, royalities to console makers, and then the hard retail cut.

Allison just ran down the sheer amount of PC game stores and launchers on the market. Epic trying to establish that there’s massive competition on Windows for game purchases because there is no restrictions on distribution.

Allison gives us a crash course in Steam history, as well as where the 70-30 rev cut came from.

"What happened was PC developers in particular were left in a lurch with limited distribution options. Digital distribution was pretty early, in its infancy.”

Then came Steam.

Among the reasons the retail indsutry more or less “abandoned” PC games, in Allison’s telling, was that console games were easier to sell.

"PC games didn’t have a standard box size,” he says, as one factor.

:When they established the 70-30 split in 2005, it was very well received by the development community. It was a big shift from the conomics of physical retail,” Allison says.

So App Store didn’t establish the 70-30 for app stores, as he explains. It was more Valve with Steam.

"The sentiment in 2018 was fairly broadly was that the 30% could be considered unreasonable,” Allison says of Steam.

"We wanted to provide an alternative that was reasonable,” with the Epic Game Store.

Allison says Epic wanted to get out of the gate quick, so it used a 88-12 revenue split and focused on games “you couldn’t get anywhere else, initially.”

"Our goal was to provide something as close as possible to self-publishing economics as we could,” he says.

"We had very enthusiastic potential partners in front of us,” Allison says on early EGS meetings with developers.

They had 100 meetings in less than a week at Gamescom in 2018, apparently.

Allison says many developers expressed hestiation because leaving Steam could decimate their PC business.

“We presented our partners with a recuperable minimum guarentee,” he says. They paid them what would be 12 months of sales on Steam to assure them.

Allison says Epic Games Publishing has 14 projects in development, and it’s other major strategic investment for its PC game store alongside first-party games.

We know of Playdead, Remedy, Fumito Ueda’s Gen Design. theverge.com/2020/3/26/2119…

Allison says Epic Game Store does not require developers use its payment system.

Couple of examples is Wizards of the Coast, who make Magic: The Gathering Arena. Ubisoft also uses its own payments system.

Allison reveals third-party developers have made about $500 million from Epic Game Store to date. Epic itself has generated $800 million revenue from first-party titles on PC alone.

Allison, back on the stand after break, says Epic Game Store would be conisdered profitable by 2022 or 2023 if you factored in revenue for first-party games like Fortnite, Rocket League, etc.

Allison asked about bringing Epic Game Store to iOS. He says they wanted to, but Apple policies forbid it.

What commission rate would EGS charge on iOS?

"We would charge 88-12,” Allison says.

I am extremely interested in how Apple’s lawyers are going to go after EGS and Allison here, who is now on cross-examination. Seems like he made a lot of good points about PC market competition.

Lumberjack’s Dynasty gettin a shout out in court, which is amazing. For some reaosn we’re taking a tour of EpicGames.com and the digital store front page.

Okayyyy I can see where they’re going with this. Epic Game Store FAQ has a warning, "Do not trust other sources, as they are likely unsafe.”

Apple’s lawyer says “if you’re goig to download software, trust is important.”

Apple’s lawyer pointing out that Spotify, the first non-game app in the Epic Game Store, arrived only just a few months ago.

She also refers to Spotify as a member of the Coaltiino for App Fairness, the industry trade group that’s targeted the App Store with lobbying efforts.

"That’s true, you do heart games” is a very weird thing for a lawyer to say to any witness in any trial tbh

Apple’s lawyer is focusing now on Allison’s history of game distribution.

They’re focusing on Steam setting the industry standard. Allison says it’s not the standard on PC anymore.

Here’s another case of one of the wintesses in this case having to reconcile something they say as a positive in a promotional context but that appears negative in a testimony context.

https://twitter.com/thedextriarchy/status/1390768173683781635

Cloud gaming is great, until Apple says it’s a worthwhile substitute for a native app.

This is an perplexing path Apple is taking. They’re trying to use the hatred of the Epic Game Store for its exclusive strategy as evidence of… something? I’m frankly not sure.

But now we’re transitioning to EGS not accepting certain types of games.

Apple’s lawyers clearly steering this toward comparing Epic Game Store to the App Store. Apple wants to argue that store owners should have power to control what they sell.

This is fun, ok. Apple’s lawyer is saying Epic is responsible for itch.io’s sexual and “offensive” content because it distributes its launcher on the Epic Game Store.

That got a bit dicey. Judge asks Allison if they want to do that on phones, as in distribute another app store within its app store that maybe has adult content.

“I don’t know that we’d do that with itch.io,” he says.

Apple’s lawyer says Epic’s projected total gross revenue in 2024 declined by $341 million over ’19 and ‘20, from $1.1 billion to $836 million.

I’m assuming this is to cast the fight against Apple as a financial play. Even though Fortnite on iOS is not the dominant platform.

Apple’s lawyers says its apples to oranges to compare an app store’s fees with that of a credit card company. That’s important because Epic CEO Tim Sweeney has cited the low Visa/Mastercard feees as what would be fair for the App Store and Google Play. theverge.com/2019/3/20/1827…

Allison is thrown a bone during redirect. Asked to clarify his comment on 88-12 rev split being outside the norm, which he appeared to have contradicted.

He mentions that things have changed, like Microsoft lowered its fees and changes to App Store and Google Play commissions.

Appel’s lawyers really going after itch io. "I don’t support sexualized content of any sort,” Allison says when pressed. But he asserts Itch has different moderation standards, and its their store and platform. Epic just lets you download the launcher.