Sean Hollister

During a jury recess, the judge noted that Epic didn’t seem to be challenging the amount of damages Google’s expert calculated, beyond the payment processing fee. Perhaps the jury won’t need to decide an amount because Epic will simply concede a few hundred thousand dollars to Google.

That’s likely peanuts for Epic, at least compared to Epic’s legal fees for this trial.

There was also a suggestion we might wrap up early today.

Tilting Point suggests its revenues skyrocketed after adopting a strategy of helping developers publish on the Play Store, quadrupling from under $50M in 2019 to over $200M two years later.

But Epic is pouncing on that, in a line of questioning designed to make Burak look biased — Epic gets Burak to agree that the revenue stream from Google is critical to his business, and points out how Tilting Point is in the business of brokering developer relationships with Google and how Tilting Point needs to maintain a strong relationship with Google itself to do so.

Burak says “correct” in response to each of Epic’s questions and agrees that Google asked him to testify today. I would think the jury knows by now that every witness has been called by one side or the other, but hey.

He says that in general, the lifetime value of a user (LTV) on the Google Play Store is much higher than on, say, a Samsung store, but is implying that it’s not just because of Google’s market share.

Google “provides tools for me to understand how effectively I’m doing it and how effectively they convert to install the apps, the games, and how effectively I can convert them after on to be payers,” he says.

The tools help him help developers compare performance to the leading apps (anonymously) in each game genre on the store and “fine-tune” the “stream of players.”

(Basically, when Epic launched its game on the Google Play Store and bypassed Google’s payment system, it breached its contract, and anybody who bought V-Bucks from Epic using Epic’s Direct Pay system didn’t pay Google’s fee.)

Leonard has a doctorate from MIT in economics but says the calculation is pretty simple:

Epic received $1,329,770 in revenue through Direct Pay (during the short period that the hotfix was live)

Google had a 30 percent service fee

So Google lost $398,931, he concludes.

The only thing Epic asked him to clarify was whether he subtracted the transaction fees from that amount — and if he was aware Epic paid Google $3.3 million during the same period. It’s not clear where the $3.3 million number came from.

Has Epic even considered paying for preinstallation?

“I couldn’t answer the question.”

And yet, he agrees that Epic paid developers hundreds of millions of dollars to make their games exclusive to the Epic Games Store on PC.

“Is there anything wrong in your view with Epic paying hundreds of millions of dollars to developers to get them to launch exclusively in the Epic Games Store?”

He says no.

Gelber replies:

How is the cost structure different?

There are “multiple competitors on console,” he says.

“We should have done this two years ago,” said Oliver.

“Even today, 7 years later, Apple still has not implemented this feature int he Apple App Store, has it?” asks Epic’s attorney. Oliver starts to say no, because it has to do with paid apps (and presumably is no longer needed to compete with Google as free-to-play apps are the norm), but gets cut off. He says no, Apple has not.

In 2018, Apple also internally forwarded this Android Police story about how “Google Play Store shows you the streaming apps that have the movie or show you’re searching for.”

Apple’s Matt Fischer, head of the App Store, wrote, “I’ve always wanted the ability to search for content within apps (specific movies, music, etc. ) and show the relevant search results.”

“Google was going to charge 15 percent for subscription transactions starting in year one of the subscription... Apple still has not adopted that policy itself, has it?”

Apple’s Oliver had to agree. He also agreed it sounded correct that Google didn’t implement a subscription discount policy until a year and a half after Apple, a point that Epic has continually attempted to drive home during this trial, as evidence the companies didn’t feel competitive pressure from each other.

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.

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: