Epic and Google Strike $800 Million Deal for Unreal Engine and Services
A judge is probing whether Epic Games and Google are settling their ongoing antitrust battle partly due to a newly revealed partnership involving the Unreal Engine, Fortnite, and Android. During a hearing in San Francisco, it was disclosed that Epic and Google have entered into a new agreement that seems to encompass “joint product development, joint marketing commitment, joint partnerships.” California District Judge James Donato raised concerns that this deal—where Epic would assist Google in marketing Android and Google would utilize Epic’s core technology—might have influenced Epic to ease its demands for changes within the Android ecosystem.
While most details of the agreement remain confidential, the judge questioned witnesses, including Epic CEO Tim Sweeney and economics expert Doug Bernheim, about its potential effects on settlement discussions, uncovering some insights along the way. “You’re going to be helping Google market Android, and they’re going to be helping you market Fortnite; that deal doesn’t exist today, right?” Donato asked Bernheim, who confirmed this. He characterized it as a “new business between Epic and Google.”
Sweeney’s testimony shed a bit more light on the situation. He described the agreement as related to the “metaverse,” a term he often uses in connection with Fortnite. “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 fully… sorry, I’m blowing this confidentiality,” Sweeney remarked.
Donato then mentioned a significant figure tied to the deal: “An $800 million spend over six years, that’s a pretty healthy partnership,” he noted. It was revealed that this amount pertains to Epic spending $800 million on certain services from Google: “Every year we’ve decided against Google, in this year we’re deciding to use Google at market rates,” Sweeney explained. However, he clarified that Epic and Google are not collaborating on a single new product. “This is Google and Epic each separately building product lines,” he stated when asked about the term sheet’s mention of “Google and Epic will work together.”
Google opted not to comment on the deal, and Epic did not respond immediately to requests for input. Donato appeared cautious about the partnership, questioning Bernheim on whether it could represent a “quid pro quo” that might lessen Epic’s motivation to advocate for terms that would benefit other developers. Currently, Epic is supporting a settlement that would require Google to lower its standard app store fees globally and allow alternative app stores to register for easier installation on Android.
Sweeney rejected the idea that Epic might be compromising its terms for a payoff, emphasizing that it is the one making payments. “I don’t see anything crooked about Epic paying Google off to encourage much more robust competition than they’ve allowed in the past,” he stated. “We view this as a significant transfer of value from Epic to Google.” He also noted that the Epic Games Store would not receive any preferential treatment from Android under this agreement.
It seems the settlement is linked to the business deal, with Judge Donato suggesting that Epic and Google would only finalize the agreement if the settlement is approved. Sweeney acknowledged that while specific terms are still being negotiated, he anticipates they will be finalized. He told Judge Donato that he views the settlement and the deal as “an important part of Epic’s growth plan for the future.”
In previous statements, Sweeney has maintained that Epic will not engage in exclusive deals with platforms. Following the Epic v. Google victory in 2023, he remarked that “we’ve always turned down special deals just for Epic. We’ve always fought on the principle that all developers should be, you know, given the same opportunities.”
