Epic Games vs. Fortified Philosophies

During an impassioned keynote address at the DICE 2020 conference, Epic Games CEO Tim Sweeney commended the developers of Roblox for their vigorous support of user-generated content. Fortnite was still in what Sweeney called the "early stages" of UGC exploration, but he promised to make it an essential pillar to the game's future.

He also cautioned other studios against working in isolation, arguing that a philosophical evolution must take place:

I think the critical thing is gamers should be free to engage any game with all of their friends wherever they want without any unnecessary friction...Gamers and creatives are really at the core. I think we have to recognize that platforms and stores and engines and all the services supporting them are secondary, right? We're participants in the supply chain of game development.

When it comes to making the Metaverse, a rising tide raises all ships. The success of fellow travelers like Roblox will only make it easier to convince other studios to try adapting to a new paradigm—which is exactly what Epic Games hopes to achieve. Collaborative synergy is key to creating the optimal conditions for a user-powered Metaverse to take on a life of its own.

Over the past three years, Sweeney and his team have become the righteous enforcers of an industry humbling that stands to crown gamers as king.

We are all susceptible to the pull of viral ideas. Like mass hysteria. Or a tune that gets into your head that you keep on humming all day until you spread it to someone else. Jokes. Urban legends. Crackpot religions. Marxism. No matter how smart we get, there is always this deep irrational part that makes us potential hosts for self-replicating information...The only thing that keeps these things from taking over the world is the Babel factor—the walls of mutual incomprehension that compartmentalize the human race and stop the spread of viruses.

— Neal Stephenson, Snow Crash

DON'T HATE THE PLAYER

In the same speech, Sweeney highlighted the classic symptoms of what he calls the "customer adversarial business model," a prevailing attitude where fear for the bottom line causes companies to restrict the quality of user experiences.

The prior ten years had been an exercise in walled garden mentality. Every gaming platform had its own online service that precluded gamers from joining friends on other consoles. Unless game studios embrace a spirit of open exchange, the 2020s might become another "lost decade" of entrenched philosophies.

It's high time, he said, to abandon practices that "do harm" to both customers and the supporting ecosystems that power our games. He criticized the ongoing reluctance to embrace crossplay as a way to maintain platform lock-in on game purchases. If you can play a game with friends across systems, why shouldn't you also be able to play a game you've purchased on any system?

Sweeney likened the current status quo to the interregnum period between the invention of email and its widespread use as a tool for telecommunication. Before the introduction of the "@" symbol and domain suffixes, there was simply no way to "connect and federate" email systems. What would the world look like if email was still restricted to a local server?

Stubbornly insisting on closed access can only limit mutual progress, and knowingly hinder innovations that might benefit every gamer in the world. A radical excoriation, to say the least.

OVER THE GARDEN WALL

To get to the Metaverse, games must become interoperable enough to trade digital assets, and standardized to enable seamless player transitions from one to another. Once these connections exist, tomorrow's 'versers will navigate digital experiences like an archipelago of interdependent islands.

Through the lens of traditional competition, it seems counterintuitive to ask a company to purposefully dilute its market share. To a Metaverse true believer, that's not the half of it. Rather than settle for "stopgap solutions'' that might inch us closer to the Metaverse, Sweeney advised a holistic reassessment of industry business models.

By fully embracing the free exchange of knowledge and resources, he hopes to equalize the playing field to move away from "a whole bunch of walled gardens" to something that "resembles an open Metaverse," where friends can move seamlessly around and experience things together.

Leveraging Fortnite's unlimited appeal, Sweeney aims to bring everyone to the table—by force, if necessary. Those developers who are still reluctant say his vision of the Metaverse would imperil not only profits but all motivation to develop, and for those reasons it will never come to pass. But that's what they said about crossplay.

CROSSING THE RUBICON

In September 2018, Epic Games accomplished the impossible. The allure of Fortnite's thriving economy (and an alleged boatload of cash) had finally overcome Sony's resistance: the PlayStation network would add the final piece of the Triforce, making Fortnite the first game ever to link play from mobile devices, desktop computers, and all three major console platforms. As Sweeney put it:

Fortnite had the honor of being kind of a forcing function. It was a game that had gained such wide adoption among so many players on so many different devices that it had become a real problem that you couldn't play on your iPhone and connect to somebody on Xbox or PlayStation. This was actually dividing up social groups, you know? And creating fissures through actual gaming communities and real world social associations of players.

Breaking through was a true gaming milestone. A few years laters, memories of the time before are getting kind of fuzzy. Crossplay has fast become the standard of excellence.

In recent months, major players like Blizzard and Ubisoft have unveiled cross-platform support for their flagship titles. Overwatch crossplay is already in beta (a fact Sweeney himself applauded), with customized matchmaking for console and desktop users in ranked play. Blizzard also announced an overhaul that brings your entire Battlenet social circle into a global group, eliminating the need to change regions (unless you happen to get your Internet through Communist China).

Not to be outdone, Ubisoft recently revealed Rainbow Six Siege crossplay during a surprise announcement at E3 2021. Players on PC, Stadia, and Luna will link up later this month, with additional support for inter-console play arriving next year.

VICTORY ROYALE

The gamers have finally been heard. Online games with enormous communities are beating their chests over their newly interoperable social networks. Whether cross-platform play first arose by accident or not, the positive community reception is a testament to the value of free exchange. Users now spend twice as long in-game. As studios signal baked-in support for future gaming platforms like Stadia, there's little reason to think the holdouts will win anyone over to their side of the aisle.

Using Fortnite's ubiquity as a forcing function, Epic Games has already promoted a sea change in industry practices. Now the company hopes to become the depth charge to sink foundering business models. Whether you call it "leading by example" or ramp-rushing the competition, you can't deny that it's working.

In April, Epic Games announced a $1 billion raise explicitly reserved for building infrastructure to power its Metaverse ambitions. That cool billion curiously included a $200 million investment from none other than Sony—a sure sign of favorable relations between two giants once at loggerheads. Crossplay may adversely affect title sales on a particular platform, but money sure talks when everybody gets a piece of these revitalized game economies. And if anybody would know, it's Epic Games.

A RIGGED GAME

Last time, we talked about Roblox as a self-referential Metaverse—a semi-closed system that might one day become massive enough to pull every other game into its gravity. If Roblox is a dark star, Epic Games is like a wild exoplanet disrupting the established orbits of everyone around it.

With more than $4.2 billion in annual revenue, Epic Games has rapidly become the seventh most-profitable gaming studio in the world. You could say it's hypocritical of an industry behemoth to put its competition in the crosshairs—and you'd be right. At DICE, Sweeney actually saved both barrels for third-party publishers:

Facebook and Google have long been the leaders in this trend. They give you a service for free and then make you pay for it in a form of currency that's dearer than money. They make you pay for it in loss of privacy and loss of freedom. That model has pervaded the industry to the point where it gives everybody—not only the user climate, but also the political climate—an incredibly negative view of the entire tech industry.

In his mind, the biggest obstacle to building a user-focused Metaverse is (fittingly) the pernicious "mind virus" that publishers should monopolize the customer relationship. Sweeney railed against the Android and iOS platforms that charge exorbitant fees that are "completely decoupled from all cost equation whatsoever" and tantamount to "unfair monopoly profits." He even accused Google and Apple of marking up their actual payment processing operating cost "by a factor of five or six."

If you've been following the Epic Games vs. Apple saga, you'll know exactly where that kind of talk was headed. After Apple deplatformed Fortnite from the App Store for supposed terms of service violations in 2020, Epic Games sued Apple for engaging in monopolistic business practices. Without addressing the merits of either argument, it's obvious that Epic Games sees itself as the paragon of a contrary design.

LOOT GETS THE BOOT

Shortly after acquiring developer Psyonix, Epic Games purposefully dismantled Rocket League's lucrative loot box economy. The move caused consternation among ardent supporters of the loot system, but the majority of players welcomed the Credits in-game currency as a more equitable replacement.

Loot boxes have a notorious history. If you're unfamiliar, this controversial marketplace mechanic offers in-game items or perks through a lottery system. Players spend some amount of real-world or platform-native currency for the chance to redeem high-value rewards—without knowing what's at stake. Gamers regard them as a predatory practice, but some game developers have defended loot boxes as a way to boost player engagement and bolster budgets for ongoing content updates.

Though Fortnite Battle Royale has never included a loot box mechanic, Epic Games was forced to modify paid loot boxes in the Save the World cooperative survival mode after a backlash of user criticism. As part of a class action settlement, the company later refunded $8.00 to anyone who had ever purchased a premium loot box.

BUCKING THE TREND

Despite a few sins of their own along the way, it's clear that Epic Games has come around. At DICE 2020 Sweeney defended the decision to remove loot boxes from Rocket League as a matter of principle. Any company, he said, should be reluctant to "create an entertainment experience where two humans compete and have an outcome that's influenced by spending."

Fortnite's robust V-Bucks economy likely has something to do with it. At $7.99 for 1,000 V-Bucks, you could theoretically buy-in for a lifetime of Fortnite for half the price of a movie ticket. The latest season's Battle Pass can be purchased for 950 V-Bucks. Play enough Fortnite while the Battle Pass is active, and you can earn up to 1,500 V-Bucks back—more than enough to pick up the next Season's pass, plus a nice cosmetic or two.

Buyback incentives (and consistent novelty) keep players returning, and offer more touchpoints to stimulate the game economy. With a greater emphasis on UGC in the works, Fortnite may soon enable users to monetize their own in-game creations. That may be all Fortnite needs to catalyze a fully self-sustaining Metaverse economy. Should all go well, there's reason to think Sweeney and his team might expand the V-Bucks model to its other IPs via interoperable Epic Bucks.

ECONOMIES OF EPIC PROPORTION

Ever since Rocket League's loot boxes went the way of the dodo, there's been some scuttle about Credits. Shrewd PC players scraped the game files and discovered that the currency is referred to as "Rocket Bucks" on the backend. Most people dismissed it as a working title or a tongue-in-cheek reference to the command from on high—but Sweeney's comments might reveal a future intention. Could we be seeing the protocols of a Metaverse Bucks economy?

That may depend on the outcome of Epic Games vs. Apple. Commentators are betting that Apple will prevail against the weightier antitrust claims, given remarks by Judge Yvonne Gonzalez Rogers that seem to undermine the foundations of Epic's case, but it may amount to a pyrrhic victory. The suit has exposed enough revelations about Apple's policies that the court will likely recommend substantive changes to the App Store's fee structure. Gonzalez Rogers acknowledged the scope of the case, admitting that "Apple is not just being sued by Epic. It is also being sued by a class of developers.”

Whatever the outcome, going the whole ten rounds with the top dog might be Sweeney's Rocky moment. He's made no bones about calling out the "undue power" of publishers and social outlets who use their "position and control" to gain an "unfair share of revenues." If Epic's suit fails to move the needle on App Store fees, it may at least embolden others to speak out against prohibitive pricing models.

Lawyers for Apple denounced Epic Games as a "multibillion dollar enterprise" masquerading as a "modern corporate Robin Hood" to pay fewer operational fees—a fair criticism, if you excuse the rhetorical flourish. Epic Games did try to find ways to navigate around App Store fees. Our suspicion? It's all a ploy to get us cheaper tickets to the Metaverse.

MONETIZE THE MASSES

Sweeney argues that ethical game economies should emulate the credit card processing model, where publishers and platforms split 1% micro-fees. Besides making the overall experience more enjoyable for consumers, the elimination of outsized fees would actually produce even greater profits through increased transaction volume. After all, who ever heard of a broke credit card company?

We need to start rethinking the way we structure these large-scale game economies, especially as they get bigger and more complex. They should not simply be a means for the developer to suck money out of the users. It should be a bi-directional thing where users participate. Some pay, some sell, some buy, and there’s a real economy.

He sees the directional flip in games monetization as a way to embrace creativity. By supporting "participatory economics," brands can make an honest claim to supporting their customers. These creator economies would make games a venue for both publishers and users to express their ideas.

If we're approaching a moment where people can meet friends in any game, from anywhere, create together, and monetize those creations, the last hurdle is equalizing access to participate in the economy. Disabling prohibitive fees is only part of it; you also have to ensure that there are reliable systems to power those economies.

Sweeney's greatest fear is that the Metaverse may be forced to rely on proprietary technology. He likened the unchecked power of Google and Facebook to Eisenhower's remarks on the military-industrial complex, calling them "a grave threat to our democracy." He has already expressed an interest in decentralized technologies as a way to circumvent the pernicious power of third-party platforms:

You come to the realization that the blockchain is really a general mechanism for running programs, storing data, and verifiably carrying out transactions. It’s a superset of everything that exists in computing. We’ll eventually come to look at it as a computer that’s distributed and runs a billion times faster than the computer we have on our desktops, because it’s the combination of everyone’s computer.

Sure sounds like a certain network we could mention. With your help, the Salad Kitchen is now outpacing some of the world's fastest multimillion dollar supercomputers. Not only will we power the future infrastructure of the Metaverse together—we're going to pay our own fare for the journey to the other side.

MASTERS OF THE METAVERSE

Every Metaverse experience will have its own economy and democratized creative tools. Salad will level the playing field so everyone can actively participate in that flowering world. Whether you need a fresh helping of V-Bucks, Robux, or any other flavor of Metaverse mammon, Salad will give you the spare income to dabble in its every creative arena.

Our mission has always been to offer a simple way for the heroes at home to extract meaningful value from their hardware. As we move to incorporate a full marketplace for advanced computing tasks, you're going to power the persistent Metaverse, and you're going to get paid to do it. Salad will make your PC a passport to the Metaverse.

As science fiction becomes fact, only decentralized societies of sovereign creators can forge the future. The Metaverse will never belong to a Buy n Large corporatocracy or a Weyland-Yutani conglomerate. People like us will be the Hiro Protagonists of our own stories, with a defined stake in the igneous mindshare of the Metaverse. Though Stephenson's Metaverse resembled a massive, black pseudo-planet, the 'verse of tomorrow will look a lot like things we're living today.