Is an iPhone more like a PC or an Xbox?
This question was asked – implicitly and explicitly – on the third day of over and over again Epic v. Apple Testimony. The cartel process started on Monday with some intoxicating debates about Fourteen days, the Game and / or metaverse in the heart of the case. Yesterday both sides argued about whether iPhones and iPads were really locked up. And today, Apple and Epic addressed one of the biggest questions in the process: whether iOS violated antitrust law would turn any major game console into an illegal monopoly as well.
Apple’s lawyers warned Sony, Nintendo and Microsoft in their opening speech against the background that their business models are fundamentally similar. “If Epic catches on, other ecosystems will fall too,” they warned. But today, Epic called Lori Wright, Microsoft’s head of Xbox business development, as a personable witness. In response to a series of questions, Wright divided computing devices into “specialty devices” and “general-purpose devices” – in a way that iPhones clearly defined the latter.
As Wright describes, the Xbox is a specialty device. “You’re basically building a piece of hardware to do a certain thing,” she told a judge. “The Xbox was designed to give you a gaming experience. People buy an Xbox because they want to play games. As a result, Microsoft maintains tight control over what content users can access – it’s a ‘curated, bespoke hardware / software experience’. The market is also much smaller: tens or hundreds of millions of copies sold versus “billions” of Windows devices. Later that day, Epic engineer Andrew Grant gave his own, similar definition of game consoles in general, calling a console “a single-purpose entertainment device.”
According to Wright, Windows computers are general-purpose devices. “You buy it to do a variety of things and that changes every day as new ideas arise,” she said. “It can already do a lot of things, and it has the opening to do a lot more things.” These platforms can support unexpected, emerging applications in more areas of life, especially if it is easy to do so receive an app on them in the first place.
Wright paid a lot of attention to the various ways users could get apps on Windows. This includes Microsoft’s own App Store, but also Steam, the Epic Games Store and direct downloads from a website. Microsoft recently stopped commissioning Windows apps to 12 percent to compete with Epic, while Xbox still receives a 30 percent commission. Wright says there is no plan to change this discrepancy. That is despite the fact that there is under the hood no massive hardware difference between an Xbox and a desktop PC.
According to Wright’s definition, the iPhone is difficult to call an all-purpose device. (She described an Apple special-purpose product as an iPod.) Intentionally or intentionally, Wright also linked the distinction to one of Epic’s main themes: profit.
Epic describes profit as one of the biggest differences between iPhones and consoles. It is argued that console makers need to treat app makers better because, unlike Apple, they lose money on hardware. Therefore, they have to plan to attract developers to the platform. From Microsoft’s perspective, Wright stressed in the testimonial that no Xbox console was sold for a profit, even late in a generation’s life after manufacturing costs dropped. Part of that curated hardware / software experience is planning a particular genre of app and attracting the developers who will create it, rather than just getting rid of it and seeing what happens.
Microsoft later backed up in a statement that “profits are made from game sales and subscriptions to online services,” but that didn’t really contradict the claim – it was just made clear, like Wright, that the operations as a whole are profitable.
Will these distinctions convince the court? It’s hard to say, and Judge Yvonne Gonzalez Rogers has asked questions that Epic’s hard lines between consoles and iPhones are easily skeptical of and Wright’s strict distinction between “general” and “specific” devices.
Apple’s attorney didn’t spend as much time arguing over exact definitions. Apple’s strategy was more based on questioning Wright’s credibility by finding that it had not submitted any documents requested by Apple. A lawyer later similarly accused Grant of working on the hotfix that secretly introduced a new payment system Fourteen daysand insisted that “You knew you were dishonest, didn’t you?”
But Apple did Press Wright to lay out in detail only How Xbox is much more locked down than Windows and asks if it supports competing game stores or streaming services, for example. (This survey was puzzled by the fact that Microsoft is referring to both consoles and General games department as “Xbox” so you can have an “Xbox Store” on PC – a fact that created confusion during the cross-examination.)
Why is this useful for Apple? Well, Epic started the trial by stating that iOS should work more like macOS. Both operating systems are known for their relative security and seamlessness, but only the latter allow software to be installed from outside the App Store. Epic’s opening speech questioned why Apple had to lock the iPhone when it had already created a perfectly functioning but more open system. But with Wright and Microsoft, Apple has a perfect point of comparison: a large computer company that offers two very different versions of a large black box.