By KIM BELLARD
You might have missed it amongst all the headlines about the U.S.P.S., the 2020 elections, and, of course, that little thing we call the pandemic, but Fortnite got kicked off Apple’s App Store (and subsequently Google Play).
I’m not a gamer, but I am fascinated by gaming, because, as Steven Johnson put it, “The Future is where people are having the most fun.” Tim Sweeney, the founder and CEO of Epic Games, Inc., which makes Fortnite, seems to be having a lot of fun. And he thinks the future is the Metaverse.
Healthcare, take note.
The tech giants were reacting to Epic allowing “permanent discounts” on developer fees for in-game purchases made directly, rather than going through Apple or Google. Developers thus avoid the 30% commission charged in those Stores. Mr. Sweeney has been railing about the commission level for some time, leading to the recent decision.
Apple tried to justify its action:
Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.
Epic had, not surprisingly, already gamed this out: it immediately sued both Apple and Google in federal court, charging:
Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the” market for in-app payments on iPhones.
Even better, they rolled out a slick ad, its own version of Apple’s iconic 1984 ad attacking IBM:
Mr. Sweeney charged: “We must all choose to fight a painful battle now, or accept an all-powerful middleman with unbounded ambition to extract tribute and limit innovation in the decades to come.”
All this is happening, of course, when regulators in both the U.S. and Europe are eying tech giants warily for monopolistic actions, so kicking off a major app because it wouldn’t say a tribute — umm, “commission” — means they feel there is a lot at risk here. In just three years, Fortnite has accumulated some 350 million users worldwide.
Some view this as just about money, a tech giant battling two bigger giants for more favorite deals. Mr. Sweeney see it as a fight about platforms and exactly what a platform can dictate to its users.
Some view this as just about money, a tech giant battling two bigger giants for more favorite deals. Mr. Sweeney see it as a fight about platforms and exactly what a platform can dictate to its users. He tweeted: “We’re fighting for open platforms and policy changes equally benefiting all developers. And it’ll be a hell of a fight!”
In an interview with Joseph Kim, Mr. Sweeney said:
…they say something is only a platform when the majority of the profit is made by creators rather than the company that built the thing right? Windows is a platform. Gee, is iOS a platform? Not sure.
It should be noted that Epic offers its own platform, Epic Games Store. More importantly, Epic is more than Fortnite; in addition to its Store, it has a game development software (Unreal Engine), the game/social network Houseparty, and this spring hosted a virtual concert watched by more than 12 million people. Mr. Sweeney has made it clear: Epic is gearing up for the Metaverse, which some believe will be “the next version of the Internet.”
The concept of the Metaverse has been around for years — science fiction writer Neil Stephenson is believed to have first introduced it in his 1992 novel Snow Crash — but Mr. Sweeney elaborated on it in his interview with Mr. Kim:
But the Metaverse is going to be some sort of real time 3D social medium where instead of sending messages and pictures to each other asynchronously, you’re together with them and in a virtual world and interacting and having fun experiences which might span anything from purely games to purely social experiences.
The other critical element of the Metaverse is it’s not just built by one mega corporation, right? It’s gonna be the work, the creative work of millions of people who can each add their own elements to it through content creation and programing and design. And the other way of adding value.
Apple, he says, “has outlawed the Metaverse,” since it does not permit “cross-platform ecosystems and games,” something he has pushed for years. The Metaverse, he believes, “It’s going to be from more and more companies and brands connecting their products and services until you have a much, much more open thing that everybody participates in…And so it’s in everybody’s interest to really interconnect and standardize over time.”
Mr. Kim put it to him directly:
JK: And you just want to see competition at every point in the value chain, where every component of the value chain that there’s a healthy competition there. Is essentially… Is that what you’re advocating for?
Tim Sweeney: Yeah, exactly. Healthy competition at every point and facilitated by technical interoperability standards. Right
I think of all this in contrast to healthcare. Oh, sure, healthcare has plenty of middlemen, each collecting its “tribute” and too many of them limiting innovation. But while Mr. Sweeney and others are looking for the next version of the Internet, healthcare hasn’t even gotten to the platform stage, much less platforms with open standards, interoperability, “healthy competition at every point,” and real time collaboration, eventually in 3D space.
Healthcare still works in your grandfather’s economy and uses your parents’ Internet.
Look, I don’t really care if I can’t download Fortnite from either App Store. I don’t have strong feelings about whether 30% is a “fair” commission for Apple and Google. I do wonder what healthcare’s first real platform will be, and worry that, once it comes, it will stifle competition and innovation rather than spur it. I’m all in on cross-platform products and services, with open standards and interoperability, especially for healthcare.
Most of all, I wonder who healthcare’s Tim Sweeney is — fighting to open up today’s “system” and thinking hard about what comes next, whether that be the Metaverse or something else we haven’t imagined yet.
As Mr. Sweeney said:
I think we should all be advocates for the world that we want. If we aren’t forceful and fighting for the world that we want…then we’re going to get a very different world. And by the time it’s set in stone, it’s going to be too late to change it.
Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.
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