Simply EPIC - a perfectly executed Antitrust production - move over Elizabeth Warren!
A Perfectly Executed Antitrust Production
Step 1. Let Apple and Google know that you won’t be paying their 30% tax to them on the Fortnite mobile app anymore
Step 2. Wait for both to play along by cutting you off from their app stores
Step 3. Slap a couple of brilliant Antitrust suits on the table, complete with violations of both the Sherman Act and California’s Cartwright Act, and an entertaining trailer of content, “Nineteen Eighty Fortnite” that would bring a smile of “yes!” to most faces. Move over Elizabeth Warren and your “Big Tech is bad” Medium post. Are we witnessing the most creative execution of an activist moment we have seen from a company in history?
See Complaint below for Injunctive Relief with Epic Games, Inc as plaintiff vs Apple as defendant below - is this a court filing or a screenplay?
Also awesome protest entertainment / mockery of Apple’s declaration in 1984 that they are saving the world from IBM here - “Nineteen Eighty Fortnite”
It's probably clear but my overall take is that, so far, this production from Tim Sweeney and Epic Games is so good, so creative, so perfectly executed, and not to mention for the good of innovation everywhere. Who doesn’t want to root for creators everywhere? This move could finally help every developer who sells digital goods or services anywhere who is beholden to this 30% tax. And even more impactful, what does Epic want from this? See below excerpt from the Apple case - No Money, Just Justice!
The suit against Google is a little more specific and disconcerting.
Epic lured Google to remove it from the store by implementing an additional payment mechanism to allow players to pay Epic directly for in-game currency. Like clockwork, Google removed Epic, and then Epic sued Google.
Similar to the Apple filing, the opening scene is grab-the-popcorn material -
In 1998, Google was founded as an exciting young company with a unique motto: “Don’t Be Evil”...Twenty-two years later, Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolize.
It then describes the ways in which Google forces phone manufacturers OnePlus and LG to comply with their demands. Epic and OnePlus came to an agreement to include a special
Fortnite launcher to be preinstalled on OnePlus phones, until the deal was eventually strong-armed off of the devices by Google, with the exception of India.
Surely, companies everywhere are cheering. We have seen so many cries for help from companies. As we have mentioned in the past, analyzing stock performance before and after these events, as a gauge of impact, indicates that they fell on deaf ears.
Similarly, the drumbeat in Washington has been loud and consistent. Perhaps it helps that this is mostly a bi-partisan issue. The House Judiciary Services Committee Antitrust subcommittee hosted a many-part series called, “Online Platforms and Market Power”. In January, the Verge wrote about one part in the series in which tech execs testified one after the next. A clear thread ran through the presentations - dealing with big tech is effectively a “shakedown”. Tile said Apple made its product harder to use after Apple launched a similar product. PopSocket said Amazon forced very bad terms to sell its phone add-ons. Basecamp said Google was putting competitors’ ads above searches for its name, forcing it to pay more. Epic’s case highlights a key question which is, how did the internet and the mobile economy go so terribly wrong, ending up in the hands of two behemoths Apple and Google?
Epic stands out to me from other tech and policy voices as one that could be more successful in affecting real change. They literally produced this action, as one might produce a play or a movie.
In terms of financial impact, Epic will likely be less impacted than others by removing itself from the two most powerful mobile distributors on the planet, mainly due to Fortnite’s massive player base. This is truly an act of leadership but one should assume there will be some cost. Remember, Epic already rage quit the Google store once before in August 2018, only to relent to the 30% fee eight months later with a very grumpy run-on statement -
“Google puts software downloadable outside of Google Play at a disadvantage, through technical and business measures such as scary, repetitive security pop-ups for downloaded and updated software, restrictive manufacturer and carrier agreements and dealings, Google public relations characterizing third party software sources as malware, and new efforts such as Google Play Protect to outright block software obtained outside the Google Play store.”
This is war.
Tim Sweeney has a lot of people and companies on his side. In the same way that it is cute to think that Steve Jobs would even care to throw stones at IBM for their dominance of the computer industry in 1984, Tim Sweeney is attacking companies who may one day stand in his shadow as a leader in tech innovation. In the same way that some might have laughed in 1984 at the suggestion that Apple’s MacOS upgrades could dominate the headlines over IBM’s new mainframe cycle, I think we need to take a minute to imagine a world in which Epic’s Unreal Engine 5 is the Operating System that dominates the headlines.
As detailed back in May when it launched (great trailer here), Unreal Engine 5 will allow games to look more like movies, by bringing more cinematic quality, specifically lighting, tech to gaming.
It sounds cool, but what is more exciting is the concept that I have been writing about since 2018 in our first piece on Non Fungible Tokens and the Metaverse; or, as I like to put it, I want to take my Gucci bag from the holiday party to the Mario party.Gaming is the first digital “hang out” space but as we can do more and more in digital worlds, we will migrate to doing more than just playing games. Meeting up in a digital space to do work isn’t too far away. In fact, it could be a natural next step in Zoom’s user interface. Spending hours on end in front of a screen full of little boxes will surely get old - wait isn’t it already old? Of course, this behavior will require financial transactions along the way and we have already seen this behavior happening in gaming for decades.
Signum Growth Capital Truth #1: Jumping into emerging technology and merging onto the highway of behavior that is already happening is very powerful.
Source: Fortnite, TopShop 2018
Speaking of this truth…
If anyone would like to talk about what Mythical Games is doing, please let me know and first check out the trailer for the awesome upcoming game BLANKOS. In case you missed it, this is a great Dean Takahashi Gamesbeat article.
Also speaking of Zoom, we have recently launched WIGZ on WEDZ - W(omen) I(n) G(aming) Z(oom) with my friend Zsuzsa James of the Consulate General of Finland in LA.
We host a gathering of accomplished women in gaming (executives, founders, investors) over Zoom every other week and our Community space is on our WIGZ on WEDS server on Discord. Please let us know if you are interested in joining as we started an application form. Our goal is simple - to help each other!
Finally, please let us know if you are interested in joining a book party discussion with the author of The Book of Esports: The Definitive Guide to Competitive Video Games William Collis. I'm thankful for my good friend Greg Landegger who asked William to co-host this with us. I have a feeling this is going to be a great way to start the week. If you would like to join, let us know and here’s an easy way to buy the book to read it ahead of the event on Monday.
Thanks for reading and have a great weekend,
Angie
Angela Dalton | LinkedIn | Twitter | Email
Signum Growth Capital Team
Angela Dalton | Founder and CEO | angela@signumgrowthcapital.com
Max Fiege | Director, Digital Assets | max@signumgrowthcapital.com