Tim Sweeney’s Last Laugh
Three and a half years ago, Epic looked like they had a bit of egg on their face after losing basically across the board in their case against Apple. And nearly every story about the verdict said as much. But that wasn’t my read.
The key was that while Epic lost on most counts, those were also all the counts they were expected to lose. But they didn’t lose on all counts. In fact, they won a potentially big one that would force Apple to open the App Store. Even if just a crack, by striking down the "anti-steering" elements the company was employing to ensure that their entire app economy flowed through the App Store. My read was that, if played correctly, Epic might be able to shove their foot in this opening and eventually kick the App Store door down. And my read was that this is exactly the game Epic CEO Tim Sweeney was aiming to play.
And well, if so, it worked.
It would be impossible to overstate how damning the new ruling by Judge Yvonne Gonzalez Rogers is against Apple. I mean, my god. No, it won't destroy the company, but it will force major changes, certainly to the App Store. And possibly to the entire way Apple does business going forward. If anyone was still under the illusion that Apple is a principled company just looking to do right by their customers and developers – that this wasn't all about money – this isn't just a wake up call, it's a middle of the night pulling of the fire alarm. Because there was and still is an actual raging fire. One that Apple now must extinguish.
But there will be much more to say about the broader picture and ramifications here over the next days and weeks – suddenly, WWDC seems like it could be even more interesting this year! For now, I just want to focus on the Epic and Sweeney element. Mainly because I think I was right, and damnit, people thought I was crazy for reading it this way three-plus years ago. As I wrote in a post entitled, Apple Won a Battle to Lose the War:
Apple may think that they’re doing enough in a piecemeal fashion to stave off major change, but they’re not. If anything, they need to make a major change to stanch the bleeding. But they won’t do that. They’re both too proud and too arrogant. They’re so sure that they’re in the right here that they don’t see that it actually doesn’t matter.
Epic, I think, sees that. They’re coy about it, but my suspicion is that they’re a lot smarter about all of this than they’re letting on. And that we’ll only find that out well after the fact. After the App Store has been majorly reformed by Epic’s “losses” here.
As I’ve said before, this is some Sun Tzu shit.
And I’m really not sure Apple sees this. They’re failing to read the room and more importantly, the courtroom. They’re going to interpret this court order in the way that best serves Apple, obviously. But others are going to challenge that, obviously. Regardless of who wins, it just continues the bad vibes yielding bad blood within Apple’s own developer community. And it’s going to keep the pressure on them, politically.
Yeah, I mean, nailed it, if I do say so myself.
Still, I obviously can't know what Sweeney's true intentions and game plan were here. But again, it sure read to me that he was playing Apple, in a way. The argument against this would be that he runs a massive company which was undoubtedly hurt by his decision to pull their biggest title, Fortnite, from Apple devices. But if you're still looking for a principled one in all this, perhaps he is the one.
And it wasn't just that specific moment in time, there continued to be many examples that indicated Sweeney might be playing a different game here – ever since he first started his campaign nearly five years ago. At first, I thought Epic may have misjudged how Apple would respond to their clever trolling, "1984"-esque viral moment and all. But actually, that's what led me down the path of thinking this was all a part of the plan, in an almost crazy Joker way.
Soon, I was diving into pure Kremlinology – using Jack Ryan examples, no less – in trying to read between the lines of the emails between Sweeney and Phil Schiller.1 The Appeals Court seemed to hand Apple another win, but actually just reinforced Epic's window. And the Supreme Court implicitly agreed with all of it. Once the European Commission took up the same general fight in the EU and started to demand App Store changes big and small – changes which in some cases caused Apple to change and in others, they're still fighting – the good times continued to roll as Sweeney continued to troll. Fortnite was coming back to the iPhone! Actually, this may have just been a gambit to get Apple to take another swipe at them. Which worked, and Apple once again looked silly.
And then Epic beat Google in a major way in a major trial. This was always sort of a sideshow to the Apple situation, even though it was similar. But whereas Apple deftly deflected a lot of Epic's attack in their initial go-around, Google failed miserably to do so. I continue to believe this loss is actually a bigger deal than their actual antitrust losses. And while it made Apple look good and smart by comparison, Google's loss here also likely hurt them in the bigger picture. Because it kept the ball rolling against Apple's (ridiculous) App Store control contortions.
And so here we are now. If Epic started this all by rolling a rock down a hill, Judge Gonzalez Rogers added some mass to the rock while the Appeals Court, the EC, and the jury in the Google trial helped push it even faster. And suddenly it was a boulder. One that just flattened Apple's reputation.
Perhaps I'm giving Sweeney too much credit here. And reading way too much into his actions over the past five years. It's entirely possible, I'll admit. But if this wasn't his strategy all along, it probably should have been. Because it played out almost exactly as I thought it would, strategy-wise. It has less to do with knowing Sweeney and Epic and everything to do with knowing Apple. How they would misread the situation, dig in their heels, and be done in by their hubris.
That's a good thing for all of us as consumers – and especially consumers of Apple products. Because this will force changes that Apple should have been doing proactively years ago. The App Store and its economics were created in the image of iTunes, which itself had a fee structure that stemmed all the way back to Nintendo producing physical game cartridges for Hudson. That's ridiculous, but regardless, keeping the same rules in place in such a dynamic market for nearly 20 years is just dumb. The world changed and Apple refused to. And now they must.
I think Sweeney Sun Tzu'd Apple. And I think I Jack Ryan’d that shit.
Update: A follow up on the "winners" and "losers" here...
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 Schiller is the one person on Apple's side that comes out looking good in Judge Gonzalez Rogers' beatdown. Mainly because it seems like he wanted to do the right thing with regard to not taking fees outside of Apple's own App Store ecosystem, but he was overruled. But like a good company man, he continued to tow the line on the decision, which in turn led to these epic email back-and-forths with Sweeney...