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Apple v. Epic Games opening statements highlight tech antitrust arguments

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Apple v. Epic Games opening statements highlight tech antitrust arguments

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Epic Games started its antitrust trial against Apple today with its argument about why Apple’s control of its App Store for mobile games and apps is an illegal monopoly. Apple responded with an opening statement that painted Epic Games as a big corporation that is overplaying the victim role.

The lawsuit started last August after Epic Games, the maker of the popular Fortnite battle royale blockbuster game, tried to circumvent Apple’s payment system and implement a discount for consumers that avoided Apple’s 30% fee for the App Store’s transactions. Apple kicked Epic’s game out of the App Store, and Epic sued for antitrust violations. (Epic Games also sued Google for similar reasons).

In virtual federal court on Monday, attorneys for both sides made their opening arguments (with slide decks) about why their side should prevail. The case is being tried virtually in the Northern District of California in Oakland, with presiding judge Yvette Gonzalez Rogers. Epic Games CEO Tim Sweeney is currently testifying. The trial is expected to last three weeks.

Epic’s opening statement

Epic’s outside attorney Katherine Forrest, an attorney at Cravath Swaine & Moore, said that Apple’s 30% fee for all transactions on its App Store is nothing more than an unfair tax, as she said Apple hasn’t innovated and that it stands in the way of lower prices for both developers and consumers. She alleged Apple has built a walled garden with the iOS ecosystem using anticompetitive tactics. Apple prevents consumers from moving to other systems because they’re locked in by high switching costs from one platform to another, she said.

“The evidence will show that Epic stands behind its decisions every step of the way,” said Forrest in her opening statement. “When they pick up the iPhone, users enter a different world. They are locked into a closed platform where they can only download apps from Apple, and each and every time they purchase in the app, a 30% tax is imposed.”

Forrest argued that Apple’s strategy to limit choices and lock in customers goes way back to the beginning of the iPhone, which debuted in 2007, followed by the 2008 debut of the App Store.

She cited the words of former CEO Steve Jobs in a 2010 email saying that Apple had moved further than others competitors like Microsoft and Google in achieving ways to “lock customers into our ecosystem.” That same memo said 2011 would be a year of a “holy war with Google.” And in March 2008, Jobs said Apple did not intend to make money with the App Store. But it eventually started turning out “extraordinary profits,” Forrest said.

Above: Steve Jobs wrote this memo in 2010.

Image Credit: Epic Games

It’s like Apple is taking a cut at every stop at a gas station, after a car has been purchased, and it requires an Apple payment at that gas station for every tank of gas, Forrest said. She described Apple as the “largest company the world has ever seen.”

Epic said it is not suing for damages, only for justice for developers.

“Developers became trapped inside the [walled] garden,” Forrest said.

She said Apple’s conduct has resulted in the monopolization of two markets, the iOS app distribution market and the market for paying for app purchases.

Epic Games, which generates billions of dollars from Fortnite’s success, argued that Apple has implemented a series of dependencies and restrictions that prevent switching to competitive alternatives. Epic said Apple takes advantage of “attention density” on iOS that makes iOS users so attractive when it comes to games and other apps. Epic argued that the relevant market for antitrust evaluation is the App Store, as opposed to the larger mobile app and gaming market.

In her evidence, she noted that Apple executive Craig Federighi sent an email to current CEO Tim Cook in December 2019, discussing features “to make our platform more sticky.”

Apple has brought up in its defense the need for better security. Epic argued that Apple’s restrictive policies aren’t made for technical reasons, like security, and rather for business reasons. Forrest cited that reason for preventing developers such as Epic Games from using alternative payments or linking to other transaction systems outside of the App Store. Yet Forrest said an Apple engineer testified that it is not unsafe to use a Mac, even though the Mac doesn’t prohibit developers from using alternatives, in contrast to the tighter control on iOS.

Epic’s attorney said that Apple didn’t do a study comparing its own security to that of others. Forrest said that Epic’s game is far more than a game, as it has features like Party Mode and Creator Mode that are more like features of a larger metaverse, rather than a game.

Forrest showed testimony from Ron Okamoto, the vice president of developer relations at Apple, saying that his company does not routinely negotiate terms of its developer program license agreement. But Epic noted that there are exceptions. And in a message from marketing chief Phil Schiller to executive Eddy Cue, Schiller said that he didn’t think Apple’s 70/30 split with developers would last forever, because of competitive concerns. Epic Games has started its alternative Epic Games Store and it is charging only 12% royalties.

epic opening 3

Above: Epic’s argument about its antitrust case.

Image Credit: Epic Games

In that email in July 2011, Schiller said Apple should consider lowering its royalty rate if revenues start surpassing $1 billion as a way to stay competitive. Profits are now in the billions of dollars, with a profit margin of 78%. Epic Games also pointed out obvious security lapses in the App Store, such as Schiller himself complaining that an obvious clone of Temple Run became the No. 1 app in the world. Epic also noted that one virus alone infected 20 million Apple devices.

“Is no one minding the store?” Schiller asked in the email sent in 2012.

Epic also said Apple has acknowledged removing 400,000 apps from the store to date. At the same time, Apple has a list of “whitelisted” developers such as Hulu that get special treatment, Epic said. That is an example of an arbitrary enforcement of App Store policies, Forrest said. Players can alternatively play games via web browsers, but Epic said that the performance of games from the App Store is better than the performance of web games.

“Apple argues that all this confidence is firmly behind the protective barrier of IP rights. There are real legal arguments here that I will not get into except to say that the evidence will show that IP rights do not override competition law as Apple’s own primary witness on this topic already acknowledged in this case,” Forrest said.

Apple’s opening statement

apple opening

Above: Apple cited Steve Jobs’ words about the App Store from 2007.

Image Credit: Apple

In an opening statement, Karen Dunn, an attorney at Paul Weiss Rifkind Wharton & Garrison and legal representative for Apple, said the company has unleashed a decade of economic growth for developers of games and apps. It described Epic Games as a huge company that no longer wants to pay for Apple’s innovations in creating the iPhone and the App Store. It noted Cook described the App Store as an economic miracle. Apple said there have been more than 180 billion app downloads since 2008.

“Businesses have been launched that would not have otherwise existed,” were it not for the App Store, Dunn said. “Jobs have been created worldwide. … A $20 billion company has decided that it doesn’t want to pay for Apple’s innovations anymore. So Epic is here, demanding that this court force Apple to get into its App Store untested and untrusted apps — something that Apple has never done.”

Apple implemented a 30% fee in 2009. Previously, publishers typically took a 70% fee, Dunn noted. And she noted that almost everyone else in the industry charges a 30% royalty or more now. (Apple amended its rate to 15% for apps with small numbers of downloads, and for the second year of subscriptions).

The Apple attorney said that it created a family-friendly, secure, and reliable app store. Apple noted it handles security well, not to keep people out but to invite developers in because that good security is what consumers wanted. It noted that Epic’s unilateral move to enable linking to other payment systems opened up the App Store to security risks. Apple said allowing “sideloading” to let developers put untested apps into their App Store apps would circumvent security. Apple noted that its iOS devices accounted for only 1.72% of all malware infections, compared to 26.6% for Android and 38.9% for Windows infections.

apple opening 2

Above: Apple argues its store has been great for developers.

Image Credit: Apple

Apple’s Cook, Federighi, and Schiller will testify why its policies are needed to protect privacy, security, and other matters. Apple’s attorney said that Epic has dismissed its intellectual property, but it cited Epic’s praise for Apple’s Metal application programming interface (API) for game graphics. Apple noted it listened to developers to institute the freemium model, where apps could be provided as free-to-play with in-app purchases. Apple said that model enabled Epic Games’ riches with Fortnite in-app purchases.

Apple also said that Epic asked for a “side deal” that lowered the royalty rates for Epic, asking for special treatment in the summer of 2020. (Epic noted that Sweeney’s email asking for that side deal asked for the same royalty rates for other developers). Apple characterized Epic’s “hotfix” change that implemented the changes in Fortnite on iOS that enable alternative payments as a kind of sneak attack, as Epic informed Apple of the changes at 2 in the morning on the day it happened.

apple opening 3

Above: Apple says there is plenty of competition to its App Store.

Image Credit: Apple

Dunn said that Epic deceived Apple, but gave Microsoft a heads up about the change as an opportunity to highlight the practices on the PC and consoles as opposed to restrictions on mobile devices. Dunn said that suggests that Sweeney viewed the makers of consoles and PCs as competitors to Apple when it comes to app stores.

“There’s a stack of competition (of) winners and losers who will be determined not by monopoly power, but by who picks the right direction that successfully executes on them,” Dunn said. “This is truly remarkable.”

Apple referred to Epic’s move to change Fortnite’s pricing as a security breach itself. During what Epic said was a “hotfix,” Epic enabled its iOS Fortnite app with sideloading of a lower pricing offer on its own Epic Gamessite. That led to the banning. Apple said it would allow Fortnite back onto the App Store if Epic would disable the sideloading.

Apple said it has a host of pro-competitive policies, Epic cannot show that Apple’s policies are anti-competitive or have anti-competitive effects, and that Epic is not right about the relevant market definition, as it is “twisting itself into a pretzel” with its argument. Dunn noted that, after Fortnite was banned on iOS, Epic said that the “party continues” on the PC, Android, Sony, Microsoft, and Nintendo platforms. That means that Apple doesn’t control the distribution of Fortnite, Dunn said.

Dunn said that evidence shows that platform-switching does happen, sometimes as much as 26% of the time when people buy new phones. There are also many alternatives to Apple for digital game transactions, Dunn said. Apple said 95% of its customers can use alternatives to iOS in the home, based on a survey. And it noted that 46.8% of Fortnite revenue comes from the PlayStation platform, compared to just 7% from iOS. And Apple said it accounts for only 23% of all gaming transactions. And it notes that the number of apps on iOS has climbed to 1.8 million and the number users is now at a billion and developer revenue has dramatically increased.

apple opening 4

Above: Apple argues that web apps work as well as App Store apps.

Image Credit: Apple

Apple also noted it rejected 150,000 apps last year because they violated its privacy guidelines, and it has removed two million apps because they don’t follow guidelines or don’t work with the latest version of its operating system. Dunn also argued that Apple does not tie its products, meaning you are not required to adopt one product in order to get access to another. Apple also noted that if Epic prevails, other app ecosystems that require a 30% royalty will also fail.

Apple also noted that it dropped royalty rates from 30% to 15% for the second year of a subscription, and also dropped rates similarly for apps from small businesses.

Dunn said that Apple has a host of reasons — security, reliability, protecting intellectual property, quality, preventing liability — for enforcing its policies that Epic wants the court to get rid of. Those reasons are important to everyone, from parents to businesses, Dunn argued.

GamesBeat

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GitHub now lets all developers upload videos to demo bugs and features

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GitHub now lets all developers upload videos to demo bugs and features

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GitHub has officially opened up video uploads five months after launching in beta, allowing all developers to include .mp4 or .mov files directly in pull requests, discussions, issues, comments, and more.

The feature is designed to help developers visually demonstrate to project maintainers the steps they went through when they encountered a bug, for example, or illustrate what a major new code change achieves in terms of functionality.

So rather than having to follow detailed step-by-step textual instructions which may be ambiguous or unclear, it’s now easier to see exactly what’s happening at the other end first-hand and should go some way toward avoiding time-consuming back-and-forth written discussions. This could also be used in conjunction with a voice track with a narrator explaining the on-screen actions.

Above: Video in GitHub

It’s worth noting that with this launch, GitHub also now fully supports video uploads from within its mobile app.

ezgif.com gif maker 2

Above: Uploading video to GitHub via mobile app

Seeing is believing

Native video upload support helps bypass the cumbersome alternative involving recording and uploading a video to a third-party platform, then sharing a link. On that note, GitHub actually doesn’t yet support video unfurling from shared links, but that is something it said that it’s working on, alongside enabling video annotations for specific pieces of code.

At a time when the world has had to adapt to remote work and collaboration, learning to embrace asynchronous communication is one of the fundamental factors for distributed teams to succeed — recorded video plays a big part in enabling this.

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Warhammer III hands-on — A journey into the Realm of Chaos

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Warhammer III hands-on -- A journey into the Realm of Chaos

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Sega Europe’s The Creative Assembly studio showed off a demo of Total War: Warhammer III at a press event, and I got to go hands-on with the game in a battle set in the Realm of Chaos.

Being launched later on this year in partnership with franchise owner Games Workshop, Warhammer III the latest in the Total War series. The franchise has sold more than 34.3 million copies to date. The Total War: Warhammer spinoff is a cataclysmic conflict between demonic powers and the sentinels of the mortal world. I played the first two games, and many others, in the Total War series. This game brings the Warhammer trilogy to its conclusion.

The Creative Assembly has been making Total War strategy games for more than two decades. Most of these have focused on historical wars; until recently, when they’ve expanded into myths such as Total War: Three Kingdoms and fantasy with the Warhammer titles. In a Total War strategy game, you move armies around on a strategic map and fight in a 3D real-time battle when they meet on the battlefield.

In Total War: Warhammer III, each choice the player makes will shape the conflict to come. You’ll explore the mysterious Lands of the East to the demon-infested Realms of Chaos.

“Warhammer III is of course the concluding chapter in the series and we’re planning on going out with a bang,” said Al Bickham, the development communications manager for The Creative Assembly, at a press event. “We’ve crafted a huge arching narrative which ties the trilogy together. There are going to be more playable races out of the box than the previous two games. And it’s all set across a hyper-detailed campaign map which begins at the very fringes of Warhammer lands and takes you deep into the mind-bending horrors of the four Realms of Chaos.”

The game will have iconic races from the World of Warhammer Fantasy Battles, including the video game debut of Kislev and Cathay alongside the factions of Chaos — Khorne, Nurgle, Slaanesh, and Tzeentch. This means players will wage war with the most diverse array of legendary heroes, gargantuan monsters, flying creatures, and magical powers.

Embarking on a new grand campaign, you will be tasked with saving or exploiting the power of a dying god. Each race offers a unique journey through the nightmarish Chaos Realm. The endgame will determine the fate of the world.

The Survival Battle

Above: Everything looks so orderly at the beginning of the Survival Battle in Warhammer III.

Image Credit: Sega/Creative Assembly

The Creative Assembly used the Parsec to let me play a sample Survival Battle, where your goal is to attack into the Realm of Chaos and take objectives and fend off the demon hordes. It’s a new kind of narrated battle that is fresh to the franchise. They’re like boss battles in Warhammer III, and they trigger after you reach key points in the game’s narrative.

“We want the [Survival Battle] to feel epic, really memorable, and full of decisive moments in the course of your campaign,” Bickham said.

My faction was the Kislev, an Eastern human faction that resembles the Russian Cossacks. And I had to take a number of victory locations within the a bloody fortress called the Brass Citadel.

The faction leader, Tzarina Katarin (the Ice Queen of Kislev) has taken her loyal forces into the Realm of Chaos. Khorne, the Chaos God of rage and war, sends a legion of demons to destroy the trespassers. The Kislev forces have been detailed for the first time in the series. Katarin is an Ice Witch with magical powers to both rally her troops and strike fear in the hearts of demons.

I wasn’t exactly impressed with the forces I got in the battle. There were some excellent sword troops, but I only have five companies of them in a place where I had to defend against attacks coming from all directions. I had twice as many archers and a few archer cavalry units.

The Realm of Chaos, of course, is a bad place. It has plenty of blood-red backdrops and one of its decorations is an actual fountain of blood. The four Ruinous Powers rule over this place, ever seeking to slip their bonds and engulf the world in a tide of daemonic corruption. Nurgle, the plague god; Slaanesh, the lord of excess; Tzeentch, the changer of ways; and Khorne, the god of blood and slaughter.

My troops had to fight uphill and sweep some light demon units from the top of a ridge. That was easy enough, and I claimed a victory point in doing so. That allowed me to draw reinforcements from another realm to strengthen my army. But then I was attacked from four directions. At least I was defending a hill, but I had a hard time figuring out where to place my five sword troops, as they were the best units to stave off attacks.

chaos 5

Above: My soldiers are devolving into chaos in Warhammer III.

Image Credit: Sega/Creative Assembly

The cavalry was useful in taking down wolf-borne demons from the enemy, but it wasn’t useful in charging headlong into enemy lines. Rather, it was better to use them to harass the enemy with missile fire from a distance. But I didn’t have nearly enough units to form a full line of defense in all directions. The result was, you guessed it, chaos.

But I tried to survive. One of the goals was to earn a battle currency called “supplies,” which allowed me to build towers and barricades. It also let me recruit new warriors, upgrade my existing units, and bring on reinforcements. Being new to the game, I couldn’t figure out how much to spend on each kind of task. I found I could build barricades and get reinforcements, but I didn’t have enough supplies to build towers, and that meant the hordes of Chaos were going to charge me without being harassed. You generate more supplies by capturing victory points or killing enemies.

Had I looked more, I would have seen that I could have used The Lore of Ice, or ice-themed spells that would slow down the enemy and help my soldiers thin their ranks as they tried to attack. There were six different spells altogether. I also could have used the Elemental Bear, a huge monster on my side, and some of the bear cavalry for the faction. Sadly they were nowhere to be found in my playthrough.

Still, after a few battle restarts, I was able to survive the first wave of attacks and open up a new part of the Brass Citadel, which was circular with a big pit in the middle. Once again, I was forced to divide my forces and try to hold off larger numbers of enemies coming from all sides. It wasn’t pretty.

I didn’t get near the goal of the battle, to fight Khorne’s champion, an Exalted Greater Demon, in a final struggle. It was a very difficult battle, but I enjoyed the idea of being assaulted by endless hordes and figuring out how to stay alive when you’re vastly outnumbered. This is a difficult mode when it comes to figuring out where to throw your troops and when. But it adds some excitement to the pressure that you feel when you have to make decisions quickly to head off disaster.

GamesBeat

GamesBeat’s creed when covering the game industry is “where passion meets business.” What does this mean? We want to tell you how the news matters to you — not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it.

How will you do that? Membership includes access to:

  • Newsletters, such as DeanBeat
  • The wonderful, educational, and fun speakers at our events
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  • Special members-only interviews, chats, and “open office” events with GamesBeat staff
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LinkedIn open-sources Greykite, a library for time series forecasting

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Greykite Silverkite

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LinkedIn today open-sourced Greykite, a Python library for long- and short-term predictive analytics. Greykite’s main algorithm, Silverkite, delivers automated forecasting, which LinkedIn says it uses for resource planning, performance management, optimization, and ecosystem insight generation.

For enterprises using predictive models to forecast consumer behavior, data drift was a major challenge in 2020 due to never-before-seen circumstances related to the pandemic. This being the case, accurate knowledge about the future remains helpful to any business. Automation, which enables reproducibility, may improve accuracy and can be consumed by algorithms downstream to make decisions.

For example, LinkedIn says that Silverkite improved revenue forecasts for 1-day ahead and 7-day ahead, as well as Weekly Active User forecasts for 2-week ahead. Median absolute percent error for revenue and Weekly Active User forecasts grew by more than 50% and 30%, respectively.

Greykite library

Greykite provides time series tools for trends, seasonality, holidays, and more so that users can fit the AI models of their choice. The library provides exploratory plots and templates for tuning, which define regressors based on data characteristics and forecast requirements like hourly short-term forecast and daily long-term forecast. Tuning knobs provided by the templates reduce the search to find a satisfactory forecast. And the Greykite library has flexibility to customize a model template for algorithms, letting users label (and specify whether to ignore or adjust) known anomalies.

Greykite, which provides outlier detection, can also select the optimal model from multiple candidates using past performance data. Instead of tuning each forecast separately, users can define a set of candidate forecast configurations that capture different types of patterns. Lastly, the library provides a summary that can be used to assess the effect of individual data points. For example, Greykite can check the magnitude of a holiday, see how much a changepoint affected the trend, or show how a certain feature might be beneficial to a model.

With Greykite, a “next 7-day” forecast trained on over 8 years of daily data takes only a few seconds to produce forecasts. LinkedIn says that its whole pipeline, including automatic changepoint detection, cross-validation, backtest, and evaluation, completes in under 45 seconds.

“The Greykite library provides a fast, accurate, and highly customizable algorithm — Silverkite — for forecasting. Greykite also provides intuitive tuning options and diagnostics for model interpretation. It is extensible to multiple algorithms, and facilitates benchmarking them through a single interface,” the LinkedIn research team wrote in a blog post. “We have successfully applied Greykite at LinkedIn for multiple business and infrastructure metrics use cases.”

The Greykite library is available on GitHub and PyPI, and it joins the many other tools LinkedIn has open-sourced to date. They include Iris, for managing website outages; PalDB, a low-key value store for handling side data; Ambry, an object store for media files; GDMix, a framework for training AI personalization models; LiFT, a toolkit to measure AI model fairness; and Dagli, a machine learning library for Java.

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