Epic Games CEO Tim Sweeney opened the Dice Summit game event in Las Vegas today with a call to make the industry more open and liberate it from the monopolistic practices of platform owners such as Google and Apple.
In a talk about his vision for games in the next decade, Sweeney alternated between criticizing all of the big players in the game industry to criticizing specific players with examples of how their behavior isn’t good for consumers or for competition.
Sweeney is able to make this kind of talk because he isn’t as dependent on those he is criticizing. The success of Fortnite, which has generated billions in revenues for multiple years, has given Epic Games the financial freedom to be a “forcing function” for prying open the closed and fragmented platforms of gaming. He also owns the majority of Epic Games, while China’s Tencent is a minority owner, and that gives him the latitude to talk about politics across borders without being muzzled.
And muzzled he was not.
Sweeney called Android a “fake open system” for putting up barriers in front of users when Epic Games wanted to enable players to sideload Fortnite directly from the Epic Games site, rather than through the Google Play store. Sweeney said that Google put up “scary” pop-ups in front of users about the risks of sideloading (viruses, malware) and other steps that users had to engage in order to get Fortnite on Android. Epic also had “tough discussions” with Sony, Microsoft, and Nintendo to make Fortnite available as a crossplay title (meaning you can play against people on other systems, and your progress, items, and so on are available regardless of device) across the platforms.
He said the benefit was that players were able to play with their friends on different platforms, resulting in a single game world and amassing a larger audience for the game.
This example of the difficulties of making the industry more open show that the “operating principles of the game industry are wrong.” To right those, Sweeney had his suggestions to bring about a Metaverse, or universe of virtual gaming worlds, in the coming decade.
A better path
Sweeney said that gamers deserved a first-class social experience, as for many players that was what gaming has become: a social activity first. Players will get together with friends first on social platforms like Discord and TikTok and then decide what to play, Sweeney said.
Making this better should be a priority of the game industry. There should also be a more vibrant user-generated content industry with game economies that support the livelihoods of player creators. This could be a multibillion-dollar-a-year industry, Sweeney said.
He also said that gaming social media could be a place where people can and should express their political views. That’s a reference to a controversy where Blizzard punished an esports player for saying Hong Kong should be free. Blizzard caught a lot of flak from players for enforcing China’s censorship on that player, whereas Blizzard argued it should keep the politics out of its esports forum. At that time, Sweeney said that Fortnite players should be free to say anything they want.
But Sweeney did say that game company marketing departments do not need to engage in politics in the same way. Sweeney said that marketing departments can stay out of politics, but the creative people should be free to say what they want to say.
Analyst Michael Pachter of Wedbush watched the speech and said that was the only part of the talk where he disagreed with Sweeney. He said game companies can and should stand up against threats to democracy, like a certain president we all know.
Ultimately, Sweeney said that game companies could collectively build the “greatest marketplace in history.”
It won’t be easy to make this open world of gaming that Sweeney envisions. Sweeney chose the Dice Summit to make these comments because it’s a gathering place for the leaders of the core game industry, particularly those making console and PC games. But some in the audience were quite skeptical afterward. They noted that some of the benefits that Sweeney talked about are already present, but are not widely distributed. Blizzard, for instance, has its Battle.net gaming service that enables players to play games on mobile, and in that instance, Blizzard does not have to pay Apple or Google when players log into Battle.net on mobile.
The credit card model
One of the principles that Sweeney argued for was that “gamers should be free to engage in any game with their friends anyplace they want without any unnecessary friction.” He said that the platforms have been too balkanized, and Microsoft lost a whole decade of progress as it tried and failed to make its Windows marketplace more like Apple’s closed system. Microsoft has since backed off on that.
Gamers and game vendors should be “free of lockdown.” He drew a comparison to Visa and Mastercard and the global credit card payment system, where vendors charge 2.5% to 3.5% fees for transactions, while store vendors such as Steam, Apple, and Google charge 30%. He said the global payments industry is proof that highly profitable companies can arise from just taking the 2.5% to 3.5% cut.
“Undue power has accrued to participants in the supply chain who are not at the core of the industry,” said Sweeney.
They collect an unfair share of the revenue and, together with player lockdown on platforms, make it hard for developers to make a living. To benefit developers, Sweeney created the Epic Games Store, which only takes 12% of revenues. He was able to get the Epic Games Store established through exclusives that were paid for with the profits from Fortnite.
Sweeney counted crossplay as an example of the past few years where all platforms have become interoperable in a piece of good news. But he said the “bad and the ugly” of the game industry is that there is still a lot more openness to embrace.
Sweeney said one of the bad ideas of games is the notion that a company needs to “own the customer.” With Fortnite, players can log in from just about any starting point, whether it is Facebook or Nintendo or Microsoft, etc.
Sweeney said, “And I think what we all really want and should agree is that we should accept equal access to all customers in the world, the billions of users who have participated, and give up our attempts to each trade or own a private walled garden and private monopolies, and we should really work together and recognize that you’re far better off if we connect our worlds and social graphs.”
He also said that loot boxes and similar ways of making money via “pay to win” are part of a “customer adversarial business model,” another bad idea. After Epic Games bought Psyonix, maker of Rocket League, the company had discussions and ultimately decided to move away from loot boxes.
He said the game industry had a choice of “being like Las Vegas” or become worldwide, highly respected creators of entertainment products that customers can trust. I have asked platform owners for comment.
Sweeney closed by saying, “And I am really hopeful that we get through it. We’re all going to be have to be steadfast in fighting for these things, the opening up of games and cross-platform play, having a lot of tough and painful conversations between parties, which ultimately resulted in great, great things for all gamers. And we need to be prepared to have those unpleasant conversations as much as we need in order to achieve that future.”
Sweeney is consistently positioning himself as the champion of openness in the game industry, and the question will be whether anyone else is going to join him in making this vision happen.