Epic Games and Google have signed a secret deal worth 120 billion yen for Fortnite and Unreal Engine


by

Sergiy Galyonkin

It has been reported that Epic Games and Google have entered into a confidential $800 million (approximately 127 billion yen) contract centered on Unreal Engine and the popular game 'Fortnite' during the settlement hearing of the two companies' antitrust lawsuit. The court reviewed the nature and status of the contract, stating that it could affect settlement negotiations and the requested remedial measures.

Tim Sweeney says it's not quid pro quo because he's paying off Google with his secret deal. | The Verge
https://www.theverge.com/policy/866161/tim-sweeney-says-its-not-quid-pro-quo-because-hes-paying-off-google-with-his-secret-deal

Epic and Google have a secret $800 million Unreal Engine and services deal | The Verge
https://www.theverge.com/policy/866140/epic-google-fortnite-android-unreal-deal-antitrust-settlement

Epic Games, the developer of Unreal Engine and Fortnite, introduced a unique payment method that bypassed the app store, leading to Google deleting the app for violating its terms of service. The lawsuit, which lasted for about five years from 2020, has now been resolved with a settlement between Epic Games and Google.

Epic Games and Google settle lawsuit over app store, Google agrees to lower standard fees to 20% or 9% depending on transaction type - GIGAZINE



At issue in the settlement hearing was that while Epic Games and Google were seeking to resolve their long-running feud, they were also secretly pursuing partnerships related to Unreal Engine, Fortnite, and Android. Judge James Donato of the U.S. District Court for the Northern District of California noted that the new arrangements between the two companies include joint product development, joint marketing commitments, and joint partnerships, and questioned whether these could affect the settlement assumptions.



While Judge Donato kept most of the specifics of the agreement confidential, he elicited an outline through witness testimony. The judge noted that 'a new relationship may be created in which Epic Games helps market Android and Google helps market Fortnite,' indicating his understanding that this is a new deal at the time of the hearing.

Regarding the size of the contract, Judge Donato stated in court that it would involve '$800 million in expenditures over six years.' Epic Games CEO Tim Sweeney, while vague about the details during his testimony, fearing it could violate confidentiality obligations, stated that the agreement relates to the 'metaverse.' Sweeney also cited undisclosed documents and asserted that 'this transaction is not an unfair settlement offer.' Sweeney explained that value will be transferred from Epic to Google in the form of Epic Games purchasing certain services from Google at market price.

The Verge, a technology media outlet, said, 'This 'metaverse' is a term Sweeney has used to refer to 'Fortnite,'' suggesting that it may include talk of Google making more full-scale use of Unreal Engine.

Regarding the question of whether there was joint development, Judge Donato pointed out a passage in the document that read, 'Google and Epic Games will work together,' but Sweeney countered, refusing to directly acknowledge the term 'joint product development,' arguing that each company was building its own separate product line. This, The Verge argued, suggests that there remains a gap between the court's understanding of the contract and the parties' stated position.

In addition, CEO Sweeney said on X (formerly Twitter) that 'Scandalous details from the Epic Games and Google settlement hearing!' and introduced the article in The Verge.

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