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The following video transcript is generated automatically by a computer algorithm that learns and gets better on a daily basis. Please accept our apologies if some content below doesn’t make sense:

Another thing that’s been sort of big in the news over the last week or so has been the fight, outcall fight between epic games and Apple. So epic games are a very large company who make the very popular game fortnight, amongst many other things. And basically what’s happened is, is that Apple has banned the sale of fortnight or their distribution a fortnight on the App Store. And the reason being is because Apple, for every app that’s on the App Store, if there’s some sort of monetisation associate with that app, then Apple charges like a 30 percent cut or fee on any of the income from that. And so epic games argument is that that’s sort of like it’s a monopoly kind of distribution channel. And that Apple aren’t really adding too much into the mix in terms of distribution, that they already have a massive distribution outside of the App Store. You know, they sell plenty on consoles and pieces and other platforms and things like that. So why should they pay the 30 percent tax? And they’re also they’re not the first ones to complain about this a few weeks ago. The base camp people were complaining of the same thing for their new email product called Hey. And so basically, EPIC has has forced this issue by doing something that was going to force Apple’s hand. Basically, they they were doing these in in-game virtual currency that you could buy. And so they were changing the way that work, which meant Apple couldn’t get their cut. So then Apple turned around and stopped it. Which then epic it obviously pre pre created this lawsuit that was just sitting there waiting for Apple to sort of pull the plug before they sort of rolled out, complete with a massive PR push where they had a spoof Apple 1984 and all this kind of stuff. So they’re probably well prepared for it. And then they did they turn around, did exactly say Google, because, you know, the Google App Store play or whatever it’s called on the Android platform, that’s the same thing. So they’re suing them as well. And it’s all coming to a massive head. And I think it’s basically it’s been characterised as the fight between the two teams. So there’s Tim Cook of Apple on this, Tim Sweeney of Epic and Tim Sweeney. Tim Sweeney is a very sound like nerdy programmer guy, and he’s characterising all of this as a sort of freedom of software and freedom of. Freedom from Monopoly and sort of closed ecosystems. But there’s obviously a lot of money behind both companies. You know, Epic Games is a multibillion dollar company. Apple always I’ll say, you know, at various points, either the largest or second largest company in the world. So this is a lot of money on each side. But I think there’s some fairly important kind of economic, straight, philosophical kind of arguments to be made on each side here. What’s what’s your take on this?

Yeah, it’s a very interesting dynamic that’s going on. Yes. If you’re pragmatic from capitalism point of view, Apple has the platform so they have the right to charge for that, probably whatever they want. If they abuse on what they charge, then people may end up going somewhere else. So that’s the playing very, you know, minimalistic and simplistic argument, which is fine. But what they are, I think fortnight, as you said, they were well prepared. So they know exactly what they are doing, that 30 percent tax. It’s so much money that for them, like you and going on out, they can afford to go on a big lawsuit with them. Big five long term it will be when cheaper than paying that tax.

So I think problème, yes, regulation would need to catch up. And there is all this.

Well, not like I think we talked about that. She will break up the monopolies on big tech. So it was like one month ago. So that they were in Congress. So it’s not a fortnight on alone. Yes. So many others are feeling this pressure, let’s say. So were there grey lines start merging? So I would I would say my my black and white opinion, Apple is right.

But then there should start being some grace on regulation for that, because then you have all these cases were, for example, fortnight. They as you said, they’re worrying consults or they have their own website or whatever. So then they have customers that they source those customers first and then it happens that those customers have an iPhone.

So but those customers who are paying for are already in other decision channels. And then just for the sake of convenience, they want to allow them to also play on their iPhone.

But it’s arguably the saw Apple is not bringing them new customers or new revenue, but it’s aiming to take a cut of 30 percent off the existing revenue, which came from somewhere else.

That’s a bit insane. You know, like probably you could go on a grey line there and say, OK, any after they download the app, any light in app or additional revenue that they are generating, you will need to pay us 30 percent. I think that will be a fair claim.

How you track that.

Yeah, that’s also said that is what that is what they’re arguing about at the moment. So you can download Fortnight for Free on the App Store and you can then buy upgraded stuff from within the app stores in purchases. And it’s the upside eight percent that they’re arguing over.

Yeah. I think for that there will need to pay. But if the customer let’s say if they are on subscription, that it started outside the ecosystem, I’m not so sure.

So, yeah. And there is lots of it will take a while. Probably others would join. For sure. It will be interesting to see what’s the end game of for fortnight. But whatever they get a better deal, let’s say, which is clearly what they are looking for. Probably others will try to get swap.

So, yeah, it’s you know, I do say I do think it’s very it’s very related to the discussion that we had about sort of breaking up the tech monopolies because. You know, the Apple App Store platform is a it’s a de facto monopoly on their own ecosystem, right. So, like, that is the only place if you if you want to sell to anyone with an Apple device, that’s the only place you can sell it through, which is, you know, fair enough. But when the apple market share gets above a certain kind of gets to a majority of devices or a majority of stuff, then there is an argument to be made. A way then becomes a de facto monopoly in general. And then there’s an argument about, you know, well, actually is that, you know, if you’re a small player and you’ve got a platform, then then if someone wants to play on your platform, there’s benefits to them, then obviously there’s a quid pro quo. Okay, you should you know, you pay us for access and then you choose to pay us for access because it’s beneficial to you. As you said, because there’s you know, there’s more customers on that platform or you benefit. And so it’s a win win in both directions. Right. Whereas with the Apple stuff, it’s now becoming because they have they have such a large market share that it’s now becoming it’s just a straight up rent seeking tax to to get involved. And, you know, usually when something like that happens, then that’s that’s you know, that’s getting into the legal definitions of monopoly monopolies. Right. Where it then becomes, you know, regulators or government or whatever need to need to start thinking about what is the Apple App Store or the ecosystem. Actually, a public commons, i.e., is something which the majority of people have access to. And so therefore, it needs to be regulated differently to know that, you know, that’s that’s effectively that’s almost a mark of success for Apple. Right. You know, they’ve become so good that they are now like the de facto way of doing things. And so therefore, they they do need to be sort of treated in a different sort of regulation schedule. So epic. Now, another point about epic. So they themselves, as well as selling fortnights, doing stuff like that, is they themselves are a platform. So on P.C. games, there is if you want to buy a piece of game lives, you can go to a store or Amazon, whatever. But the place that most people get their games from is a platform called Steam, which is run by a company called Valve out of Bellevue in Washington, US. And they’re a platform where you can go in there, you buy and download games like digital games. And most people who play games on PCs, that’s where they mostly get their games and they charge 30 percent fee for selling stuff on there. So epic a couple years ago set up their own store called the Epic Store, and they charge 12 percent. And so epic set up in competition to steam as a platform so that people can come along to their store. And, you know, and they only charge twelve percent. So there they were actively trying to sort of disrupt this platform as it existed on the P.c. And they’re getting a bit of a fight back from people saying, well, you’re a platform company yourself. You know, they have they create and market the underlying game engine, which one of which sort of drives 50 per cent of games on the planet. They’ve got their own store platform on p.c, et cetera, et cetera. But their argument is, well, the P.C. is an open platform. I you don’t you don’t have to distribute your game through our store. You can choose to do so. You don’t have to like, you know, anyone can produce a game if they’ve got the sort of programming mouse and sell it in however they want. And someone else can get it, buy it and get it onto their P.C.. Whereas with Apple. By definition, you have to go through this marketplace in order to get it on your device. There’s no side loading, there’s no other ways of doing it is literally it has to be through that direction or nothing.

I think it’s still it’s I still if I go black and white and you respect the underlying principles of capitalism, have things. All right. I’m a meritocracy. So then are police, right? Basically because they build the hardware and so forth, people you start. So then if you don’t want to know, platform, go somewhere else. And by the way, they charge the same high school as many others. So they can. They can also argue, go further and say fortnight became really popular and grew because of Apple’s distribution. At some point and now that they grew enough, they don’t want to pay us much. So it’s a battle between the big boys. But I think it’s so you have even even though I think Apple is right from a technical point of view, potentially black and white being very, very simplistic, I think fortnight is doing a favour on behalf of everyone else. So you need one of those big guys to stand up to it. Otherwise, no one can do anything. So then if there is someone that they can do it on, then if you are up a bit more of these cases, like two, three, five, 10 of those big players, they can do something about it which ultimately will benefit the end user. So, yeah, I think that it’s interesting. So I have, you know, my support to the underdog in this case for the oral benefit, even if I don’t think it’s right.

Absolom.

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