Microsoft’s official PR was quick to walk back the claim, making sure everyone knew that the overall Xbox business is profitable in spite of the hardware subsidy.Īpple pressed the issue even further, trying to force Microsoft to release its profit-and-loss statements for the Xbox business if it wanted to keep Wright’s testimony in the record. But any new information about the Xbox business was interesting far beyond Epic and Apple, so things started to spiral almost immediately. But the most exciting turn came when Xbox boss Lori Wright took the stand, testifying that Microsoft doesn’t make money from Xbox hardware.įor lawyers on the Epic side, the goal was to distinguish the Xbox from the iPhone: Microsoft sells Xbox hardware at a loss (or a near-loss), so the company’s approach is different from Apple, which makes money off every iPhone it sells.
Microsoft was a kind of unofficial sidekick to Epic for the trial, providing executives to testify in court and abruptly lowering its Windows Store fees to put extra pressure on Apple. 5] The economics of the Xbox is kind of weird That would leave Apple with more than $45 billion in profit from the App Store alone - but don’t expect them to admit it out loud. The firmest number came from an expert witness hired by the Epic side, who pegged the profit margin as high as 78 percent.
Phil Schiller said outright that he had no idea if the App Store had brought in more money than it spent since 2009 “because that’s not how I look at the business.” (For context, the App Store brought in more than $60 billion in 2020, which would be quite a lot to burn through without realizing.) Tim Cook was a little bit more reserved, saying he believed it was profitable but hadn’t calculated by how much.
One of the running jokes of the trial was Apple’s insistence that it had no idea how much money the App Store makes in profit. But for a while, Apple was willing to do just about anything to keep Netflix from giving in to the obvious economics.Īpple says it doesn’t know how much money the App Store makes 4] The App Store is wildly profitable, but Apple won’t admit it This trial turned up another instance, with emails that showed Apple employees scrambling behind the scenes to keep Netflix from removing in-app purchases from its iPhone app in 2018.įor Netflix, the logic was hard to avoid: Apple’s 30 percent cut was costing it money any time someone signed up through the iOS app instead of through a web browser. 3] Apple pulled out all the stops to keep Netflix selling subscriptions on the iPhoneĪpple insists it treats all App Store developers equally, but it’s clear big players like Amazon have gotten special treatment because of their sheer number of users.
It’s a unique arrangement - but since we also learned PlayStation is the top revenue driver for Fortnite, Epic seems to have been willing to make concessions for the platform. Apparently, Sony saw crossplay as a business liability for its business and was only willing to adopt it after Epic agreed to a complicated cross-platform revenue sharing agreement. But a handful of new emails with Epic Games showed the deal was even knottier than was publicly known. Sony took its time enabling crossplay between different console versions of Fortnite, eventually relenting late in 2018. Sony saw ‘Fortnite’ crossplay as a business liability 2] PlayStation’s Fortnite crossplay deal is even sketchier than we realized The idea was rejected for the same reason both times: opening up iMessage would just mean one less reason to buy an iPhone. Internal emails show Eddy Cue pushing to expand iMessage into a WhatsApp-style messaging platform as early as 2013 - and the issue reemerging in an email to Phil Schiller in 2016.
We’ve known for a while that Apple isn’t going to make iMessage available outside of iOS devices, but this trial showed exactly how thoroughly Apple has considered expanding iMessage into other operating systems - and exactly why the company doesn’t want to.
1] Apple keeps iMessage closed in order to sell more iPhones Once you start digging through CEO Tim Cook’s inbox, all sorts of interesting stuff comes out. A lot of the juiciest points didn’t speak directly to the verdict - like the profit structure of the Xbox or the troubled history of Fortnite crossplay - but that’s part of the fun of a massive trans-corporate dustup like this. So as we wait for a verdict to roll in, we’re taking a quick turn through all the biggest takeaways from the trial. Apple proceedings kicked off, and the news has been relentless. It’s been just over three weeks since the Epic v.