Epic Games & Google Reveal Secret $800 Million Deal During Legal Battle
"We view this as a significant transfer of value from Epic to Google."
Epic Games' willingness to settle its antitrust lawsuit against Google might have seemed sudden, and California District Judge James Donato has some concerns as well.
"The only changed circumstance that I can see right now is Epic and Google – two mortal enemies who pounded each other relentlessly in this courtroom for many years – are suddenly BFFs," he said back in November.
Perhaps there is one multi-million dollar reason behind the truce: turns out, there is now an $800 million partnership between the companies that includes "joint product development, joint marketing commitment, joint partnerships" (via The Verge).
Donato believes that this deal, with Epic "helping Google market Android" and Google "using Epic’s core technology", might have made Epic soften its demands for changes to the Android ecosystem. Google agreed to reduce its standard fee to 20% or 9%, depending on the transaction, but Donato said this resolution may not meet the legal threshold required to modify an existing court ruling, as it doesn't show a big enough change in circumstances.
During a recent hearing in San Francisco, Epic's CEO Tim Sweeney revealed that the agreement is related to Fortnite's metaverse: "Epic’s technology is used by many companies in the space Google is operating in to train their products, so the ability for Google to use the Unreal Engine more fullsome… sorry, I’m blowing this confidentiality."
In this partnership, Epic will spend $800 million to buy some unannounced services from Google. However, this is not a joint product made by the companies. "This is Google and Epic each separately building product lines," Sweeney said.
Sweeney doesn't see anything wrong with paying Google "to encourage much more robust competition than they’ve allowed in the past," he said. "We view this as a significant transfer of value from Epic to Google."
And that's the problem. What looked like a decision that would help developers fight Google's monopoly now seems like a strategy Epic used to help itself only.
The Epic-Google deal hasn't started yet, and Judge Donato suggested that the companies would only make the deal if the settlement goes through. Meanwhile, Sweeney says that the Epic Games Store won't get any special treatment from Android even under the agreement.
Don't forget to subscribe to our Newsletter and join our 80 Level Talent platform, follow us on Twitter, LinkedIn, Telegram, and Instagram, where we share breakdowns, the latest news, awesome artworks, and more.
