Epic lawsuit shows Sony asks publishers for compensation if MTX / playerbase ratio falls below certain amount compared to the cross-platform revenue

[nonoriri]

But they know they won't meet the requirements as proven by the documents with Fortnite revenue and the tweet above.

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It says "some" though, not that they do it consistently. However, I think my point still stands, if Epic knows that they can generally meet the requirements, or even if they can't, having the flexibility to price things how they want may be more a better deal to them even if it means paying a fee to Sony. If their customers expect a certain price point or sales, they risk alienating them by altering them to match what Sony charges and they can see if directing folks on PSN to the Epic store on occasion brings in more money even if they have to pay Sony a cut. Epic has to cut a deal either way but I can see benefits to a more flexible deal than a strict price match.

 

[Podge293]

some takes here are not aging well lol

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they'll just shift the goal posts like they did when it also came out that Sony was infact the only ones doing this

 

[Don Dada]

It says "some" though, not that they do it consistently. However, I think my point still stands, if Epic knows that they can generally meet the requirements, or even if they can't, having the flexibility to price things how they want may be more a better deal to them even if it means paying a fee to Sony. If their customers expect a certain price point or sales, they risk alienating them by altering them to match what Sony charges and they can see if directing folks on PSN to the Epic store on occasion brings in more money even if they have to pay Sony a cut. Epic has to cut a deal either way but I can see benefits to a more flexible deal than a strict price match.

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They don't have flexibility on pricing either.

 

[Guaraná]

LoL

Hey for the plauers, right?

And remember, if it's a business, no one can criticize it.

 

[lmcfigs]

really bad that sony is screwing over small guys, like epic games, on this one

 

[PopcornMegaphone]

To be honest, I thought our article on this was very informative and it seemed to explain it well to readers based on the feedback I saw. The initial negative reaction to the news was based on the assumption that Sony was charging developers to implement crossplay, which wasn't what the documents actually said. The conversation then shifted to Sony being the only enforcer of this clause, so the article was updated. It's standard practice for us to change headlines when the story develops.

I really appreciate Tom being a reader and I think he did an awesome job with this report!



Thanks for reading but, as I'm sure you know from reading the story, there was no rush to defend any party -- the original article clarified the misinterpretation that was rife on social media at the time. It's been preserved on the page and can still be read in full (because it's correct).

The story changed because we later learned that Sony was the only enforcer of the clause, and that's now the current topic of discussion. Hence it was updated to add new information!

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In retrospect, I was likely tougher on your article than I should have been. I think you were acting in good faith. I do think there are some legit criticisms, but it doesn't define your site or anything.

Anyone who thinks you're a fanboy should read your takes on the MLB/GamePass thing lol

 

[thecaseace]

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Frankly, the Push Square article was pure Sony Defense Force nonsense. Even the modified version is claiming that this makes business sense, which is false.

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Whilst the Push Square article was informative to a degree, its main motivation was clearly defending Sony from the perceived 'meltdowns'.

Just a little time taken could've produced an article with a bit more balance that actually add something to the conversation.

And given the recent update from Tim Sweeney that Epic has paid Sony this royalty this statement in the Push Square updated article is now incorrect:

Sweeney didn't, however, reveal whether Epic Games has ever actually had to pay this fee with Fortnite or any of its other titles. The legitimate worry from some players is that this clause may deter some publishers from supporting crossplay, although the number of All PS5, PS4 Crossplay Games grows every month. We'd need additional insight from publishers to know if that's the case.

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Also the same updated article mentions that 'well actually':

It's worth noting that PlayStation is all in on the crossplay bandwagon these days: MLB The Show 21 is the first sports game to our knowledge to support the feature, and it's developed by an internal Sony team.

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Without noting that a Sony studio paying Sony royalties seems like an odd and unnecessary concept.

 

[nonoriri]

I don't play Fortnite so don't know but seriously doubt Epic have ever undercut any of their 3rd party partners's stores on v bucks prices on Fortnite.

They may have technically done so with an epic games store coupon but never on the store RRP.

They don't have flexibility on pricing either.

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That's literally the basis of the Apple lawsuit. Apple booted Fortnite because they tried to ecnourage players to bypass paying on the App Store. Here is straight up an example of Epic undercutting iOS and Android. This type of revenue loss is what Sony was concerned about by allowing cross-progression, hence the deal. Now Epic could encourage people to go off and use the Epic store but they risk paying up if the ratios shift. So they either have to keep the ratio inline or ensure that revenue on other platforms exceeds the loss.

Epic certainly has pricing flexibility in their own store unless they want to sign a deal like the one you suggested and there is no evidence they have and in my opinion it would be extremely foolish. I work in marketing and price is a huge component. To give up the ability to flex prices on your own store would be a huge restriction. Hence why I am not surprised they chose Sony's plan instead of agreeing to strict price parity.

 

[Podge293]

Whilst the Push Square article was informative to a degree, its main motivation was clearly defending Sony from the perceived 'meltdowns'.

Just a little time taken could've produced an article with a bit more balance that actually add something to the conversation.

And given the recent update from Tim Sweeney that Epic has paid Sony this royalty this statement in the Push Square updated article is now incorrect:



Also the same updated article mentions that 'well actually':



Without noting that a Sony studio paying Sony royalties seems like an odd and unnecessary concept.

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wasnt MLB the Show cross platform also forced by the IP holder?

 

[Sameer Sedlar]

It is taking advantage of your market position. Think of indie games and how they are basically at the mercy of one platform knowing full well that without content on it it may fail, so you are forced to sign certain deals, or maybe even get your game censored that does not meet their standards.

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I don't disagree per say, but when you take into consideration how the PS4 almost makes up 50% of the players, that comes as Sony own work in expanding its console, from Sony's point of view they are capitalizing on their market position that they earned through tons of investments. Don't get me wrong, I'm thinking out load and taking into consideration all possible angels, in case of an indie dev I think this may be a risk involved with introducing MTX, cause if there is no MTX involved, then cross play has no effect on Sony's revenue.

 

[Snake__]

LOL
People are really bad at reading/ understanding legal documents
And this is just a slide summarizing those documents

Granted this sounds super convoluted, but it basically amounts to nothing
It seems like it is just a safety net so that devs dont favor another platform over PlayStation (for instance a platform with better rev share/ especially the epic games store in the case of Epic)

 

[cjelly]

This is some late-360 Microsoft shit for sure.

 

[Don Dada]

That's literally the basis of the Apple lawsuit. Apple booted Fortnite because they tried to ecnourage players to bypass paying on the App Store. Here is straight up an example of Epic undercutting iOS and Android. This type of revenue loss is what Sony was concerned about by allowing cross-progression, hence the deal. Now Epic could encourage people to go off and use the Epic store but they risk paying up if the ratios shift. So they either have to keep the ratio inline or ensure that revenue on other platforms exceeds the loss.

Epic certainly has pricing flexibility in their own store unless they want to sign a deal like the one you suggested and there is no evidence they have and in my opinion it would be extremely foolish. I work in marketing and price is a huge component. To give up the ability to flex prices on your own store would be a huge restriction. Hence why I am not surprised they chose Sony's plan instead of agreeing to strict price parity.

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Why did they have price parity on consoles?

 

[shadow2810]

It seems like it is just a safety net so that devs dont favor another platform over PlayStation (for instance a platform with better rev share/ especially the epic games store in the case of Epic)

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Or I can read this as "Devs have to favor Playstation over other platforms"

 

[hollows100]

Jesus this looks bad with every document coming to light. Would crossplay hurt smaller teams due to this? I don't Sony would do that, but you never know.

 

[tazmin]

More and more it seems like Epic is playing 4D chess here. From my personal perspective, everything about this points to Apple and Sony being the bad guys. I want to say that everything about this court case was engineered by Epic so they wouldn't have to cave in to the big platform publishers to split their revenue.

Epic's scuffle with Apple that started all this was oh so carefully planned.

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So Epic started the scuffle to get at their real target Sony...
Honestly that would an exciting finale to season 1 of this

 

[AcademicSaucer]

Wild. Sony wanted a cut not just on consoles and also wanted to disable use of vbucks.

Apple is going off scot free because Sony will be painted as the bigger villain. Lol

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If the trial was in a reality tv judge show sure.

Also I dont know if the games industry as a whole wants all thi shit to come out, I'm sure way more outrageous and anti consumer clauses could come out and the whole thing end im government regulation

 

[MatrixMan.exe]

LoL

Hey for the plauers, right?

And remember, if it's a business, no one can criticize it.

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I don't think anyone here said no one can criticise it.

 

[nonoriri]

Why did they have price parity on consoles?

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Marketing agreements? Ease of sales channels? Just because there is price parity doesn't necessarily mean it's because it's mandated that Epic can never charge less or offer special deals in their store. Anyway, I think I've pretty clear why I think agreeing to never undercut Sony would have been a worse agreement for Epic. It would mean giving up control of pricing on their own platform. Even if they never would actually undercut a third party, it's still a huge thing to give up. With this agreement, they don't have to.

Not to mention, once again, the Apple lawsuit is about Fortnite encouraging people to purchase from Epic directly instead of the third party, not necessarily price undercutting. An agreement on price wouldn't protect Sony from this either so why would they offer it up as a deal at all? It would be a dumb business move for both parties honestly.

 

[Era of not Yakuza]

So, this "tax" only occurs if it is shown that the majority of players come from PlayStation consoles, but are people spending elsewhere?

Spoiler: If true...

Well, as a consumer, it doesn't give me anything, but it makes sense for the platform owners

Companies with smaller player base have everything to gain from crossplay
I gave up playing some games on PC because the community was dead and went back to play on Ps4, which had the biggest player base

 

[Deleted member 2791]

I don't think anyone here said no one can criticise it.

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Shutting down every discussion by saying that it makes sense business-wise, and that it's the only thing that matters, is implying that.
Not directed at you specifically.

 

[TheYanger]

So, this "tax" only occurs if it is shown that the majority of players come from PlayStation consoles, but are people spending elsewhere?

Spoiler: If true...

Well, as a consumer, it doesn't give me anything, but it makes sense for the platform owners

Companies with smaller player base have everything to gain from crossplay
I gave up playing some games on PC because the community was dead and went back to play on Ps4, which had the biggest player base

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Again, this does not mean 'people play on PS4 but spend money elsewhere" - it literally just means people spend less per player, on playstation. There's a difference. if you and I play on PS4 and Xbox respectively, and I spend twice as much as you, it triggers that clause, even though I have 0 to do with the playstation market in the first place.

If somehow I play o nplaystation and decide to go elsewhere, why would you think that is? there's some reason the PS store is ACTIVELY unappealing to me, that's sony's fault, again not the dev's problem.

 

[Guaraná]

I don't think anyone here said no one can criticise it.

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LoL

I see this thread is full of people who don't actually understand what they're reading. Reading it further though, I'm failing to see anything 'scummy' here when it's ultimately a business protecting their bottom line. If my platform and services which I operate at cost have more users but those users spend their money elsewhere disproportionately then I'm obviously not going to just accept that.

This just seems like smart, albeit shrewd business.

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Smart business tbh. Dunno why anyone is surprised.

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[bsigg]

LoL

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I just want to say the last 15 seconds of watching you edit this post has been amazing lol

 

[Guaraná]

I just want to say the last 15 seconds of watching you edit this post has been amazing lol

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I hate smartphones :(

 

[MatrixMan.exe]

LoL

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Where did I say no one could criticise the decision? If you're trying to make a point, at least make it in good faith.

 

[jaymzi]

I fail to see how saying it is smart business means no one can criticize?

 

[gundamkyoukai]

Again, this does not mean 'people play on PS4 but spend money elsewhere" - it literally just means people spend less per player, on playstation. There's a difference. if you and I play on PS4 and Xbox respectively, and I spend twice as much as you, it triggers that clause, even though I have 0 to do with the playstation market in the first place.

If somehow I play o nplaystation and decide to go elsewhere, why would you think that is? there's some reason the PS store is ACTIVELY unappealing to me, that's sony's fault, again not the dev's problem.

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It don't trigger the clause just because you spend twice as much .
How much time the player base on PS play vs how much revenue is made else where is what does that .
Also for some reason you think Sony has all the power here .
If the game big enough pubs sure as hell have leverage .

 

[TheYanger]

It don't trigger the clause just because you spend twice as much .
How much time the player base on PS play vs how much revenue is made else where is what does that .
Also for some reason you think Sony has all the power here .
If the game big enough pubs sure as hell have leverage to make something unappealing for other user base in some ways .

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Yes, it exactly does what I said.

If we both play 10 hours, you play 50% of the game on playstation, if I spend double what you spend, it's a 25-75 split PS revenue vs Xbox revenue, and Sony gets a cut even though NOTHING they did has earned it.

Also, no, Sony does not have all the power here, but they had power, Epic had more power, but that's why Epic got what they want, and Sony's power caused it to have concessions.
What we DO know is Sony has MUCH MUCH more power over everyone that isn't Epic, meaning it's highly unlikely that others are getting BETTER deals on crossplay.

 

[Snake__]

Or I can read this as "Devs have to favor Playstation over other platforms"

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an over 100% ratio would favor PlayStation
an 85% ratio actually favors other platforms slightly

 

[Don Dada]

It don't trigger the clause just because you spend twice as much .
How much time the player base on PS play vs how much revenue is made else where is what does that .
Also for some reason you think Sony has all the power here .
If the game big enough pubs sure as hell have leverage .

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The biggest game on PlayStation didn't have the leverage - nobody will. They just about had the leverage to ask Sony for crossplay between consoles and that's about it.

 

[Teiresias]

Yes, it exactly does what I said.

If we both play 10 hours, you play 50% of the game on playstation, if I spend double what you spend, it's a 25-75 split PS revenue vs Xbox revenue, and Sony gets a cut even though NOTHING they did has earned it.

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Providing and growing a platform on which the game is able to have the largest audience on that platform rather than a combination of the others is the literal opposite of having done nothing. Without Sony's stalwart stewardship of the Playstation brand for nearly 30 years, the devs wouldn't have this platform with enthusiastic gamers on which to build an audience. It's like saying Apple did absolutely nothing to make the phone app ecosystem a reality.

 

[Foltzie]

Jesus this looks bad with every document coming to light. Would crossplay hurt smaller teams due to this? I don't Sony would do that, but you never know.

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Maybe? The question I had back when this came to light was might a studio get tagged by this the month they launch on a new platform or if the title goes free. I could foresee revenue spikes that might trigger the Sony PSN royalty clause, especially if a title has been on PS+ before.

The I dont think the clause itself is crazy as a platform leader trying to defend their position, but if its trying to claw revenue that wouldn't reasonably been in it sphere otherwise, thats prime anti-trust territory.

 

[gundamkyoukai]

The biggest game on PlayStation didn't have the leverage - nobody will. They just about had the leverage to ask Sony for crossplay between consoles and that's about it.

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They ask for more that and got it since there loads of games with cross play but not cross progression .

 

[TheYanger]

Providing and growing a platform on which the game is able to have the largest audience on that platform rather than a combination of the others is the literal opposite of having done nothing. Without Sony's stalwart stewardship of the Playstation brand for nearly 30 years, the devs wouldn't have this platform with enthusiastic gamers on which to build an audience. It's like saying Apple did absolutely nothing to make the phone app ecosystem a reality.

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This has to be a troll post. " Without Sony's stalwart stewardship of the Playstation brand for nearly 30 years, the devs wouldn't have this platform with enthusiastic gamers on which to build an audience. " is literally memeworthy tier posting.

 

[BradleyLove]

I'm pretty confused. I've read this entire thread and I'm still seeing conflicting takes on what this contract actually represents.

My interpretation is that if Sony had 100 people playing and that generated 85 revenue when there was no cross-progression, if under cross-progression those 100 people now only generate 75, Sony want compensation as agreeing to this new model has resulted in Sony taking a hit in revenue.

Is my interpretation correct here?

 

[shadow2810]

an over 100% ratio would favor PlayStation
an 85% ratio actually favors other platforms slightly

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If the event that devs not doing anything but the ratio is moving toward under 85%, what will they do then? trying their best to make PS a favourable platform to avoid stupid fees

 

[thevid]

I'm pretty confused. I've read this entire thread and I'm still seeing conflicting takes on what this contract actually represents.

My interpretation is that if Sony had 100 people playing and that generated 85 revenue when there was no cross-progression, if under cross-progression those 100 people now only generate 75, Sony want compensation as agreeing to this new model has resulted in Sony taking a hit in revenue.

Is my interpretation correct here?

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No. It has nothing to do with revenue loss pre/post cross-play. It only deals with the ratio of money generated by people who play on PlayStation and the hours those people spend on PlayStation vs other platforms.

Basically PlayStation wants a proportion of the money generated by a player to match the proportion of time that player spends on PlayStation. In aggregate, not per player.

 

[TheYanger]

No. It has nothing to do with revenue loss pre/post cross-play. It only deals with the ratio of money generated by people who play on PlayStation and the hours those people spend on PlayStation vs other platforms.

Basically PlayStation wants a proportion of the money generated by a player to match the proportion of time that player spends on PlayStation. In aggregate, not per player.

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Right, which is a large part why it's bullshit, because you're demanding that people's spending habits line up in ways that are beyond your control as a dev. You can't control which players spend more and less money, short of doing shit like giving playstation exclusive skins and whatnot.

Anyone pretending Sony has done anything to 'earn' that money is kidding themselves. Sony earns that money by getting people to spend money on their system, not any other way.

 

[Snake__]

If the event that devs not doing anything but the ratio is moving toward under 85%, what will they do then? trying their best to make PS a favourable platform to avoid stupid fees

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It could be a problem, but I doubt it would be since you are averaging out all players
a 15% margin of error seems reasonable and I doubt it would ever actually take effect

But I could see it becoming an issue for a game with a small player base if they just happen to have their whales on a platform other than PlayStation out of bad luck

I would say that $500,000 a year cutoff should probably be a lot higher so it doesn't effect smaller games/ devs

 

[BradleyLove]

No. It has nothing to do with revenue loss pre/post cross-play. It only deals with the ratio of money generated by people who play on PlayStation and the hours those people spend on PlayStation vs other platforms.

Basically PlayStation wants a proportion of the money generated by a player to match the proportion of time that player spends on PlayStation. In aggregate, not per player.

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Ok, thanks for that.

But it must have some basis in previous metrics. I don't see how Sony could arbitrarily decide on the percentage, and Epic agree, without there existing some underpinning.

 

[RoaminRonin]

Not a good look for Sony. Hopefully all this negative press will force them to make changes to their cross play policies.

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"Negative press" ask any gamer that's not a forum dweller and almost all of them will tell you they don't know or care about things like this. Does anyone here actually think that any of this is going to hurt Sony outside of this forum?

 

[brawndolicious]

Tada. Now you know why this part of the contract will not get into effect easily.

A ( very unlikely scenario ) could be that Basically MS would decide ( hypotethically ) to sell 10$ worth of V-Bucks for 5 Dollar, every PS-User could create an account there and buy the V-Bucks there and use it on their Playstation account instead and continue gaming there.
However If the same User would buy the V-Buck on Xbox and then continue playing on the Xbox, this contract wouldn't have any effect on them.

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If you have multiple platforms that you play the same game on (common with MP games) but your best experience is on the non-PS platform, then it's most likely that you would occasionally play on Playstation but never go through the purchasing/content management process on Playstation. This might only be triggered by like 5% of PS4/5 owners. I understand that.

The point is this puts pressure on devs/players to not try out the competition. With a game as large as Fortnite, they definitely didn't need to do cross-play to make more money. In fact they probably break even or lose money with the terms of this contract so I'm guessing their incentive was more about responding to the requests of their hardcore players who are more likely to want cross-play. Could explain why Genshin Impact doesn't support cross-play (edit: my bad, it has cross-play but not cross-progression as pointed out by gundamkyoukai).

At the end of the day, no gamer/studio should support this since it strong-arms ecosystem loyalty. We can debate how much it matters but it's still shitty.

 

[gundamkyoukai]

If you have multiple platforms that you play the same game on (common with MP games) but your best experience is on the non-PS platform, then it's most likely that you would occasionally play on Playstation but never go through the purchasing/content management process on Playstation. This might only be triggered by like 5% of PS4/5 owners. I understand that.

The point is this puts pressure on devs/players to not try out the competition. With a game as large as Fortnite, they definitely didn't need to do cross-play to make more money. In fact they probably break even or lose money with the terms of this contract so I'm guessing their incentive was more about responding to the requests of their hardcore players who are more likely to want cross-play. Could explain why Genshin Impact doesn't support cross-play.

At the end of the day, no gamer/studio should support this since it strong-arms ecosystem loyalty. We can debate how much it matters but it's still shitty.

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Genshin Impact does support cross play but not cross progression .
People are using them intermix but there are different things business wise in certain ways .

 

[Chindogg]

Hi. I'm sorry, I just read the OP and saw his banning then tried to skim through 32 pages of discussion but I'm not quite sure exactly what's happening here.

Could someone please cliffs notes the situation a bit so it's at least a bit more understandable to grasp?

 

[thevid]

Ok, thanks for that.

But it must have some basis in previous metrics. I don't see how Sony could arbitrarily decide on the percentage, and Epic agree, without there existing some underpinning.

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Obviously I don't know, but I imagine the percentage was decided like this.

Sony: "Give us a lot."
Epic: "How about a little."
Sony: "How about some?"
Epic: "Fine."

 

[darfox8]

Hi. I'm sorry, I just read the OP and saw his banning then tried to skim through 32 pages of discussion but I'm not quite sure exactly what's happening here.

Could someone please cliffs notes the situation a bit so it's at least a bit more understandable to grasp?

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The Threadmarks has a story to explains it pretty plainly. But that's getting accused of being fanboys stuff. It's a mess. Everyone is a pretend legal expert.

 

[Oregano]

Hi. I'm sorry, I just read the OP and saw his banning then tried to skim through 32 pages of discussion but I'm not quite sure exactly what's happening here.

Could someone please cliffs notes the situation a bit so it's at least a bit more understandable to grasp?

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Sony only allowed Fortnite to have full cross progression/cross play on the condition that Epic pays Sony a commission if PS4 (Cross-platform?) players' spending is disproportionately low compared to time spent playing.

A simplified version would be that if you spend 15 hours playing Fortnite on PlayStation and then signed on on another device and spent money Epic would have to pay Sony. Except it's averaged out across players.

 

[TheGhost]

I'm surprised Sony acts like this with Crossplay
It allows people to play with their friends on other consoles......without them going out and buying into another consoles eco system.

for example why would you buy a Xbox to play COD and Fortnite with your friends if you can just play with them from your PlayStation?

 

[Chindogg]

Sony only allowed Fortnite to have full cross progression/cross play on the condition that Epic pays Sony a commission if PS4 (Cross-platform?) players' spending is disproportionately low compared to time spent playing.

A simplified version would be that if you spend 15 hours playing Fortnite on PlayStation and then signed on on another device and spent money Epic would have to pay Sony. Except it's averaged out across players.

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Thanks guys.

Wow that's sounds rather scummy.