Tim Sweeney, CEO of Epic Games, known for Fortnite and Unreal Engine, called Apple and Google “gangster-style businesses” engaged in illegal practices during a speech at a Y Combinator event. He also highlighted how these tech giants’ practices have negatively affected his business by scaring users away from installing the Epic Games Store and preventing Epic from attracting developers to its platform.
Epic Games has long been involved in the battle against the monopolistic practices of big tech companies.
The company sued both Apple and Google over their dominance in their respective app stores. Epic won its case against Google but lost against Apple. However, the court forced Apple to open up to more competition by changing its App Store rules. The court ruled that app developers should be allowed to link to alternative payment mechanisms other than Apple’s own. (However, Epic is still battling Apple in court because Apple allegedly violated the court’s order by allowing developers to process their own payments, but only with a small 3% reduction in commission, which is not seen as beneficial.)
On stage, Sweeney once again criticized Apple and Google’s practices and their “malicious compliance” with the court’s decisions.
“The sad reality is that Apple and Google are no longer good-faith, law-abiding companies,” Sweeney said. “They are run, in many ways, as gangster-style businesses that will do anything they think they can get away with. If they think the fine is cheaper than the lost revenue from an illegal practice, they will always continue that illegal practice and pay the fine.”
Sweeney pointed out how these practices hurt his business. For example, when Android users try to install the Epic Games Store, Google issues a warning that the software is from an “unknown source” and may harm their device. This “scare screen,” as Sweeney calls it, is meant to warn users about the risks of installing non-Play Store apps. However, he says this screen causes 50-60% of users to abandon their attempt to install the software.
A similar drop-off rate is observed on iOS. In Europe, the Epic Games Store is allowed due to new regulations, but Apple still displays a warning to users attempting to install it. Again, this leads to a 50-60% drop-off rate, Sweeney said.
He calls this use of scare screens “textbook self-preferencing,” noting that the companies are “getting away with it.”
“Crime pays for big tech companies,” he said. “Obviously, we shouldn’t expect this to change until enforcement becomes much, much more vigorous,” he told the audience.
Additionally, the Fortnite executive stated that due to the friction and associated fees with third-party app stores on iOS, no major game developer has been willing to distribute games through the Epic Games Store. Instead of the usual 30% fee, Apple reduces the fee but collects a “core technology fee” of 50 cents per install per year for any app with more than 1 million downloads.
“Unless your app is enormously high grossing per user, any free-to-play game is largely discouraged from that,” Sweeney explained. “It’s too expensive for them. Apple would bankrupt them if they did that.”
He did note that the Epic Games Store on iOS has managed to attract some back-catalog games. Meanwhile, the store will open up to developer submissions later this year, which Sweeney hopes will expand the catalog further on both Android and iOS.