More from Epic v. Google: everything we learned in Fortnite court
“Yes, I believe we do,” says Apple’s Oliver.
He agrees that Apple and Google’s stores compete for “the highest quality apps,” as Google put it, and on “the safety and security of the user experience.“
Apple nominally charges game developers the same 30 percent as Google, but Oliver says “the vast majority of game developers are eligible for the small business program... they would be able to pay 15 percent.” It applies to developers that earn less than $1M in annual revenue — so we’re talking about the long tail, not game companies at the scale of Epic.
I’m half an hour late to court, I’m afraid, due to a BART train delay (and me missing BART’s make-up transfer point by one stop), but I’m here, listening to Apple’s Carson Oliver, a senior director of business management for the App Store on iOS.
He’s Google’s witness, and Google’s wrapping up questioning with him. The part I caught when I came in was mostly background on the fees Apple charges and why, but... see my next QP:
Epic’s attorney Bornstein says he’s now only pursuing per se on the Project Hug deal for Activision Blizzard King, dropping Riot and Supercell. He’s justifying it because ABK could have had a compelling store and Google seemingly nipped it in the bud knowingly.
But Judge Donato is still inclined not to do per se, bringing up an analogy about an “entrenched medical supplier that has a monopoly share of pulse oximeters,” which, he revealed to laughs, was not a theoretical example but a real case he was involved in.
As I wrote earlier, Epic wasn’t even trying to argue it didn’t breach its contract, and it appears that Epic is formally conceding to its breach as well — Judge Donato says we’re going to eliminate the breach of contract jury instructions and have the jury decide “how much, if anything, that breach is worth.”
Google is trying hard to argue that Judge Donato should consider an aftermarket theory, but he says it’s “completely inconsistent with the evidence that’s been presented in this case” and doesn’t agree it should apply at all. I will admit I do not know what aftermarket theories are or how they work, but Google’s lead attorney tried to argue that Google has been arguing from the beginning that people buy their phones for apps — so that gives me a clue.
We’ll be back tomorrow — yes, we do have court on a Friday for once, since day 8 got partially canceled. Tomorrow will be the close of evidence in this trial, and then we’ll be off for a week. Closing arguments and the verdict should come the week after that.
Each party will get an hour for closing arguments, says Judge Donato, and we should expect to be here until 5PM or later each day on the last week of trial.
Stolfus just gave the jury the most compelling description of the uphill battle a consumer would have trying to install Fortnite on a phone yet in this trial — and spoke a little faster than I could type, unfortunately.
He says the majority of Android owners will go search for Fortnite within Google’s ecosystem, but there’ll be no mention of it in the Play Store, and it might not appear in the first or even second page of search results — so Epic would have to advertise in Google Search to change that, paying Google more money. Should they indeed find the app, consumers don’t understand the process because they’re familiar with downloading games through Google Play.
“Then they’re hit with the first prompt, which is that this APK can damage your phone... the unknowing consumer is always on the back foot, they’re scared up front... then they’re put through an install flow that’s prohibitive to downloading the app,” he said.
We just saw the email where OnePlus’ Eric Gass blames Google, but... it sounds like what Google was blocking was a hacky workaround?
Gass wrote: “Apparently at the final stage-gate of software testing before MP release, Google is blocking our Game Space silent install solution bypass of the stop trusting unknown sources.”
Neither Epic nor Google has suggested it was a workaround yet, nor have we seen OnePlus’ subsequent explanation for why Google might have blocked it.
Stolfus tells Epic’s attorney that Google “didn’t want the ability for a store ultimately to be preinstalled and bypass the installation restrictions that exist if you sideload an app.”
LG, too, blamed Google. “They let us know that Google was preventing them from moving forward with the installation of an app that could install other apps,” says Stolfus.
Verizon, too. “We were led to believe by their partner Digital Turbine that it was related to Google,” he says.
“The ultimate goal with OnePlus... would allow OEMs to not only preinstall the Epic Games app with an optimized one-touch install flow, but also make that same install flow available on all legacy devices as well,” says Stolfus.
But that didn’t happen because OnePlus decided not to go all in outside India, and Stolfus says Epic couldn’t dedicate the same “significant” engineering resources to other OEMs, save Samsung.
“That’s insane, we should reject the Fortnite-only proposal,” said Sweeney, according to Stolfus.
He rejected it because the larger goal was to get the Epic Games app on phones, not just Fortnite.
“I just told him I’m not really comfortable being the Face of this on Android with zero leadership support,” he told his colleague Alec Shobin at the time.
We’re now hearing what he meant:
At this time, I didn’t feel like anyone had approached me personally and said this is a potential path that we’re really considering. It wasn’t just speculation or meetings to determine what could be, couldn’t be. No one came to me from a leadership perspective and say we know we just did this, we had you establish a relationship, this is a potential path we’re going down and this is what the outcome could potentially be, and therefore I felt I didn’t have support internally or was being involved in what I could potentially be involved in.
He says that after the plan was set in motion, he needed to continue to maintain a relationship with Google — but no one else from Epic would join him in meetings and calls. He asked: “are we just pawns in Tim’s game?”
It looks like Stolfus was not happy with his employer’s Project Liberty trap. “Sweet Jesus,” he wrote privately, referring to Epic CEO Tim Sweeney’s email describing that plan.
“I just spent a significant amount of my time and my energy helping launch our game product on Google Play,” he testifies under oath. “I had hoped that we could pursue that option... and this email led to that not being possible.”
Tim Sweeney is watching his testimony with an open mouth. He seems surprised or amused. That’s new: I haven’t seen Tim with an expression on his face any time I’ve checked for a reaction so far during several weeks of trial.
“I understood what Tim was ultimately trying to accomplish,” Stolfus says.
Ah yes, I forgot we already knew Stolfus was internally skeptical about the plan. We’ve just been reminded about (and the jury has just seen for the first time) what he wrote internally: “I mean, everything we’re attempting is technically in violation of Google’s policies.”
I believe I saw that same email in Epic’s complaint filed in 2020, or perhaps when I was sifting through docs in the Epic v. Apple trial.
“Google was unaware that we were going to do this,” Stolfus admits, about the Project Liberty trap.
But, he seems to be saying, Epic didn’t lie when it said it would submit a build of Android that “fully complies with Google’s policies and restrictions.”
“Did Epic in fact do so?” he was asked.
“Yeah, we submitted it, and it went live on April 1st,” he said.
Huawei put it on Honor phones — “until we were no longer able to communicate with Huawei from a technical perspective and because of government restrictions with Huawei,” Stolfus says.
Epic had a deal with LG for a gaming-targeted phone. It still had a deal with Samsung as of 2022, four years running, to put it in the Galaxy Store. It talked to Razer and Lenovo and more.
And it had a deal with OnePlus, as we’ve repeatedly heard — Stolfus says his contacts at OnePlus promised to preinstall the app globally but “ended up only having preinstallation in India.”
Why? “Because Google blocked the proposal to preinstall our app on their devices outside of India,” he claims his OnePlus contacts told him. Google says OnePlus made its own choice.
The Samsung deal was the big one. In 2018, Epic estimated, 56 percent of devices that could run Fortnite, outside of China, were Samsung devices.
Nobody had more questions for Epic Games engineering director Andrew Grant, so we’ve moved onto a February 2022 taped deposition of Hans Stolfus, a strategic partnerships director at Epic.
He says his job was to maintain and grow partnerships with OEMs in the Android space and work on the direct carrier billing business with carriers globally. He worked at Samsung as a manager of partnerships before that.
He was listed as a team lead for OEMs and partnerships in a “Fortnite Mobile Business Update / Deep Dive” document that just briefly flashed onto the screen.
Andrew Grant is still here, but Google has passed the witness — and Epic is now asking him about the website warning screens.
Grant says that on the web, websites are identified to cause harm before those warning screens show up (as opposed to Google’s Unknown Sources flow, where the assumption is that everything unknown is a risk.)
He’s also explaining that streaming games are highly reliant on a good internet connection because they can’t buffer for a couple of seconds like a Netflix video and latency is so important for responsiveness.
(I’ve personally covered cloud gaming for over a decade, so I can confirm that’s true; they also depend on the distance between you and the cloud gaming server, your Wi-Fi, etc. There’s a lot of potential friction.)
Ah, it was actually simpler than I expected — I should have guessed when he asked whether Grant’s in-laws had a good internet connection.
“The bottom line is, there are many ways to play Fortnite on mobile devices, right?”
“You can play Fortnite on cloud gaming with no download, right? Just launch it and play.” Mach suggests there’s the Galaxy Store, Xbox Cloud Gaming, GeForce Now, and Amazon, as well as downloads.
Grant keeps trying to suggest there aren’t “many” but rather “several” or “a couple.” But Epic’s own website fortnite.com/mobile says, “There are many ways to play Fortnite on mobile devices!” and the jury just got to see that for themselves.
We’re going on a short break now.
I’m sure this will become relevant soon, as Google’s attorney Kyle Mach is winding up a whole line of questioning around cloud gaming. We’re not there yet, but Grant got a laugh when he said he made sure his in-laws don’t have a terrible internet connection. “I’m a good son-in-law,” he says.
If I had to guess, we’ll come back to how Epic tipped off Microsoft gaming boss Phil Spencer about Project Liberty, but not others, because it seems self-serving? We’ll see.
Here is a passage from Epic’s old blog post about the launch of Fortnite on Android:
So far, Epic has instigated action on 47 unauthorized “Fortnite for Android” websites, many of which appear to be run by the same bad actors. We continue to police the situation with a goal of taking them offline, or restricting access by leveraging Epic’s connection to a network of anti-fraud partners (including ISPs, browser companies, and anti-virus companies) who can implement an in-browser alert like the following:
See image below. Today, Grant admits that warnings can be helpful.
We’re looking at a 2018 blog post from Epic that gives Google credit for contributing on-site engineering resources to make the game work — a blog post that Epic seems to have removed from its website, but you can access the text here.
Grant says he doesn’t know if partner support was “crucial,” as the blog post claims, “but it was very helpful,” he says.
In an old deposition, Grant was asked if Epic compensated Google for any of its services. He had a very diplomatic way of saying “not directly,” saying Fortnite fixes would lead to changes in Unreal Engine that would provide better performance for all mobile games that use the Unreal Engine.
He concluded: “I think it was a win-win as to compensation.”
(Big picture: Google is arguing it helped launch the game, only to watch Fortnite skip its store, twice, to avoid paying Google its cut of the proceeds.)
We’ve now got Epic Games senior director of engineering Andrew Grant on the stand, and Google attorney Kyle Mach asked straight-up: “You know that Project Liberty violated Epic’s contract with Google?”
With no hesitation whatsoever, Grant replied: “Yes.”
Of course, Google has him dead to rights in internal communications. In 2020, Grant wrote: “The needle we are trying to thread is to not fall foul of any agreements we have with Google, other than as needed for Project Liberty.”
(Google has counterclaims against Epic for breaching its contract.)
We’ve known for years that Epic’s Project Liberty was a hush-hush plan to draw Apple and Google into a legal antitrust battle — and Epic just admitted it built a “coalition” lobbying group to help achieve its aim.
But the company’s Project Liberty never targeted Samsung, Weissinger just admitted on the stand — after also admitting that, yes, Samsung does things that the Coalition for App Fairness rejects.
“You do not believe that Samsung abides by the principles for app fairness that are on your coalition’s website?” asked Google’s attorney.
“I agree with your statement,” he replied.
“Epic has a special deal with Samsung Galaxy, correct?” Correct.
“Epic chose not to focus Project Liberty on Samsung, correct?”
“Yes, that’s correct,” said Weissinger.
Epic’s attorney got a chance to redirect, and Weissinger started off weak, suggesting that Samsung are “exceptional promotional partners that really go above and beyond.”
Epic attorney Moskowitz tried again. “Does Samsung have the same reach and control and power as Google?”
“No it does not,” said Weissinger.
I personally broke this story in 2021, but Epic would not confirm or deny the details to me back then.
Weissinger just did that today on the stand. “Yes, it was our idea,” he said, confirming that Epic paid a consultant $100,000 to start the lobbying group, and that there were no other founding members.
In 2020, the “Coalition” told press that Epic Games, Spotify, Basecamp, Match Group, Tile, Blix, and Deezer were all “founding members” of the organization, but Google just asked if any of them were indeed founding members.
“If you’re referring to the incorporation, no they were not,” said Weissinger.
Here’s how my request for comment went in 2021, in case you’re curious:
But Epic would not confirm or deny whether it provided the original funding, hired a consultant to form the group, or bound that consultant to report directly to Epic, after repeated requests, and no CAF member we contacted would comment on that.
We’ve heard a lot about the friction Google erected to keep “unknown” sources from installing apps on Android phones and how Epic believes it’s detrimental, but Google just showed that Epic knew Fortnite’s high minimum requirements to play on Android phones and its huge download size were also barriers.
Epic estimated that 37 percent of users gave up between “Clicked Download on Web” and opening the Epic Games app — but 40 percent dropped off after opening the Epic Games app and before passing a minimum spec check.
Weissinger says 40 percent is not bigger than 37 percent “in terms of absolute players,” suggesting more players were dissuaded by the former, but had to admit that 40 is bigger than 37 “as a number.”
Update: Weissinger has now explained that the 40 percent was of the remaining players after 37 percent of those attempting to download had already been dissuaded.
Only 260M phones met Fortnite’s minimum system requirements, compared to billions for competitors, the document showed.
“Download and Patching Process remains a challenge on mobile due to Fortnite Download Size relative to competitors,” reads another line from Epic’s document, showing that Fortnite’s first download took over 14 minutes, compared to under a minute for PUBG and Call of Duty: Mobile.
That’s Epic’s VP of marketing today.
In a February 2020 internal document, Epic wrote that “mobile drives new accounts,” with 38 percent of daily new accounts in 2019 coming from a mobile platform.
But it also wrote that “mobile retention is low compared to other platforms,” with iOS retaining just 6 percent of players and Android retaining just 4 percent after the 30-day mark, compared to 16 percent on PS4, 11 percent on Xbox One, and 21 percent on Nintendo Switch.
And as we’ve already covered, players weren’t buying their V-Bucks on Android but, rather, on console. Just 0.7 percent of purchases were on Android as of 2018. Players who were introduced to Fortnite on PS4 bought 94.2 percent of their V-Bucks on PS4, but only 21.6 percent of those who started with Android bought their V-Bucks there. (34.8 percent of them bought them on PS4. Over 5 percent bought them on iOS.)
These all predate Fortnite’s launch on the Play Store — they’d have been from the sideloading days.
Google’s Paul Gennai was dismissed just before lunch, and we’re now hearing from Epic’s marketing chief — but he’s Google’s witness, which means Google is asking the questions, which means we’re not starting with pleasantries.
Google has just asked about Fortnite’s low retention of players on mobile — a point I myself brought up the other day.
In a March 26th, 2019, email from Google’s Paul Gennai to Atul Kumar (bolding mine):
In terms of the Samsung proposal, a few thoughts:
I realize that Jim noted a $50M a year number, but it’d be helpful to put that into perspective. What would that be in terms rev-share number, recognizing we might prefer to hide it in some way?
Note that I do think that a rev-share would be better at disincentivizing other app stores from being preloaded (given it’d defray revenues), which is why I liked the idea of offering a rev-share across Search and Play, but not breaking out the figures in our accounting to them.
I’m confused on the homescreen exclusivity part. If they’re distributing via Play, is the fight to have them remove Galaxy Store from the homescreen really worth fighting? I can see them digging in here and I’m not sure it’s worth us being tied to it.
Google did wind up doing the revenue sharing arrangements with RSA 3.0. Wouldn’t companies have to factor in this lost revenue share before preloading another store? asked Epic. “Yes, another app store would have to compete on a similar basis,” said Gennai.
We’re going to lunch now.
Epic just showed us an internal Google proposal document from May 23rd, 2016, where it was figuring out its “next steps with Samsung.”
Within that document, there’s a list of what “Google Gets” and what “Samsung Gets” for each of the proposed items.
One of those proposed items was “Samsung Zone in Play replaces Galaxy Store.”
The “Google Gets” field reads: “No Galaxy Store.”
The “Samsung Gets” field reads: “Stop wasting resources on Galaxy Store.”
Epic’s attorney summed up: so, there was an offer for Google to pay Samsung $50 million a year to close the Galaxy Store?
Gennai said he didn’t recall it like that. “I recall it being a separate storefront that would use Google Play infrastructure.”