Epic Games CEO Slams Apple & Google as 'Gangster-Style'

Epic Games CEO Criticizes Apple and Google’s Business Practices

Tim Sweeney, CEO of Epic Games – the company behind Fortnite and the Unreal Engine – publicly denounced Apple and Google as operating with “gangster-style” tactics and engaging in unlawful behavior. His statements were made during a recent Y Combinator event on Wednesday.

Impact on Epic Games

Sweeney detailed how these large technology firms’ policies have negatively impacted his own company. Specifically, he cited a decrease in user installations of the Epic Games Store software and difficulties in attracting developers to their platform.

Epic’s Legal Battles

Epic Games has been a prominent challenger to the dominance of Big Tech over the past few years. The company initiated legal action against both Apple and Google concerning monopolistic practices within their respective app stores.

While Epic secured a victory against Google, the case against Apple was not fully successful. Nevertheless, the court mandated Apple to foster greater competition by altering its App Store regulations.

App Store Rule Changes and Ongoing Disputes

The court ruling stipulated that app developers should now have the ability to direct users to alternative purchasing options beyond Apple’s own system. However, Epic continues to contest Apple’s implementation of this change.

Epic alleges that Apple has not fully complied with the court order, permitting developers to process payments independently but only with a minimal 3% reduction in commission – a change deemed insufficient to incentivize adoption.

Allegations of “Malicious Compliance”

Sweeney reiterated his criticism of the tech giants, accusing them of “malicious compliance” with court decisions. He asserted that Apple and Google no longer operate in good faith or adhere to the law.

“They’re run, in many ways, as gangster-style businesses that will do anything they think they can get away with,” Sweeney stated. “If they think that the fine is going to be cheaper than the lost revenue from an illegal practice, they always continue the illegal practice and pay the fine.”

User Deterrence Through Warning Screens

The gaming executive explained how these practices directly harm his business. He highlighted the use of warning screens that deter users from installing the Epic Games Store.

On Android devices, Google displays a warning message when users attempt to install the Epic Games Store, labeling it as software from an “unknown source” and potentially harmful. Sweeney refers to this as a “scare screen,” which he claims leads to a 50-60% abandonment rate during installation.

Similar Issues on iOS

A comparable decline in installation rates is observed on iOS. While the Epic Games Store is permitted in Europe due to new regulations, Apple presents a warning to users attempting to install it, resulting in similar 50-60% drop-off rates.

Self-Preferencing Concerns

Sweeney characterized the use of these warning screens as “textbook self-preferencing,” arguing that the companies are exploiting loopholes to maintain their dominance. He believes that “crime pays for big tech companies” and that more stringent enforcement is necessary.

Financial Disincentives for Developers

Furthermore, Sweeney explained that the friction and associated fees with third-party app stores on iOS discourage major game developers from distributing their games through the Epic Games Store.

Apple imposes a “core technology fee” of 50 cents per install per year for apps exceeding 1 million downloads, in addition to a reduced commission. Sweeney noted that this fee structure makes it financially unviable for many free-to-play games.

Future Plans for the Epic Games Store

Despite these challenges, the Epic Games Store on iOS has attracted some older titles. Sweeney expressed optimism that opening the store to developer submissions later this year will expand the catalog on both Android and iOS platforms.