Fee War (5)
What were the odds of winning a lawsuit against Enple and Guble?
Almost none, if I were being honest.
Even so, Archer & Harrison had decided to take the case because they believed that, in the long run, it could win them not only Legend Games, but also Snow Crash and Continue Capital as clients.
Fiona Harrison, the lead attorney on the case, felt the weight of that responsibility keenly.
Fortunately, our client seemed to understand that this wasn’t the kind of lawsuit you expected to win anyway, and had said in advance that whether we won or lost didn’t matter.
That didn’t mean we intended to go down quietly, though. If we did, the firm’s reputation would take a serious hit.
Win or lose, we had to make sure we didn’t look weak.
Along with the fifteen other lawyers working on the case, she reviewed the relevant statutes, Enple and Guble’s terms of service, and case law from around the world.
CEO Tom Scott helped prepare for trial, providing every document she requested.
I handed the paperwork to Attorney Harrison and said,
“I’ve roughly sketched out our arguments and the points the other side is likely to make. Please find the supporting materials and organize everything. Some of it will probably require direct requests to the companies involved. I also listed a few names, so please ask whether they’d be willing to appear as witnesses.”
“Understood.”
It was a little ridiculous, honestly.
What exactly do I know that makes me think I can give these kinds of instructions?
But clients like that weren’t unusual.
The kind who should just leave everything to their lawyers, yet somehow tried to run the trial themselves as if they were the judge or the attorney.
Managing and placating clients like that while pushing a lawsuit forward was exhausting work.
Still, since they were being paid and hired to do the job, they had no choice but to follow the client’s direction.
She planned to review everything first and quietly weed out whatever seemed off. But once she actually looked over the materials, her opinion changed.
Our arguments were consistent and logical, and at the same time they pointed out the contradictions in the other side’s position.
It even laid out what kind of legal theory Enple would likely advance next, and how we should respond to it.
The more she read, the harder it was not to be impressed.
It felt as if the entire course of events had already been laid out in the palm of my hand.
This was something even we hadn’t thought of.
Attorney Harrison looked at me, startled, as I spoke with CEO Tom Scott.
Maybe this lawsuit… really could be won.
After reading the complaint, Enple’s vice president, Johnny Myren, muttered in disbelief.
“Hah… I can’t believe they actually went through with a lawsuit.”
Block Games had handed everything off and stepped back, and Legend Games had taken up the fight.
Johnny Myren had done a thorough investigation into the other side.
In his view, Tom Scott was, in a word, a maverick.
Legend Games was a game developer, yes, but also the company behind Surreal Engine.
Then, all of a sudden, they had declared that Stream’s thirty percent fee was absurdly high, launched the Legend Games Store, and cut the existing thirty percent commission to less than half.
Its early market share had been tiny, but after taking Continue Capital’s investment and working with Snow Crash, it had evolved into a comprehensive gaming platform, and its share had risen sharply.
As more and more game companies and users fled to Legend Games, Stream could no longer hold out and eventually dropped its fee to twenty percent.
Are they hoping Enstore will follow the same path?
Of course, they had no intention of doing that.
For one thing, Enple was an incomparably larger company than Stream.
Last year, Enstore generated 85 billion dollars in sales.
Enple’s fee revenue came to roughly 25 billion dollars.
If they lowered the commission from thirty percent to twenty, profits would fall by a staggering 8 billion dollars.
And with Enstore’s sales growing by more than twenty percent every year, future earnings would be slashed as well, dragging the stock price down with them.
The thirty percent app store fee had existed since the market first took shape, and it remained an unshakable golden rule.
Everyone accepted it as common sense.
Even far larger IT companies than Legend Games paid up without protest. And yet some upstart game company had dared to challenge Enple’s policy head-on.
And not just that—it had even gone so far as to file a lawsuit it had little chance of winning.
In truth, there were many parts of Legend Games’ suit that were hard to understand from a common-sense standpoint.
Nightright had already generated about 800 million dollars in sales through Enstore and Play Market. Even after paying the thirty percent fee, it had still earned more than 500 million dollars.
And now, with the app stores removing it, there would be no more revenue to make.
The size and scale of the case were much smaller than the patent dispute Enple once fought with Yuseong Electronics. But compared to that, the attention from the industry, the media, and the public was much greater.
That was only natural. The “Enple v. Yuseong Electronics patent lawsuit” had been just a fight between two companies. No matter who won or lost, the ripple effect outside those two firms was minimal.
But this “Legend Games antitrust lawsuit” centered on in-app payment fees, which meant it involved the gaming industry, the tech industry, and consumers as well.
If Enple somehow lost, the whole market would be turned upside down.
Of course, that won’t happen.
Even so, the lawsuit itself was a burden for Enple.
Because they couldn’t say it openly for fear of looking weak before Enple and Guble, many developers were deeply unhappy about in-app payment fees.
If they didn’t respond properly this time, that dissatisfaction might spread like wildfire.
So they had to handle it correctly from the start. Enple retained Gibson & Simpson, a firm they had worked with before, to prepare for trial, while also filing a countersuit.
In fact, there was someone more worrying than CEO Tom Scott.
“Han Miru…”
Unlike David Lockhart, his name wasn’t widely known.
But a little digging revealed astonishing things.
He had been involved in Facenote’s hearing and in the Pether short campaign. And before that, he had shaken the entire Korean stock market with the GL Entech crisis.
He never appeared directly, but he was at the center of every major event that had unfolded lately, as if he were the one who had caused them all.
What is he? A ghost?
How closely was he tied to this case?
It left a bad taste in his mouth.
From the beginning, this lawsuit wasn’t meant to destroy either side completely. And in cases between major corporations, it was more common for the matter to end in settlement before ever reaching a verdict.
At the moment, there was simply a disagreement over fees.
It was in everyone’s interest to get the games back on Enstore. The other side probably wanted that just as badly.
He gave his lawyer an order.
“Reach out to them and hear what they have to say.”
“Understood.”
Attorney Gibson contacted Legend Games.
But the answer that came back was unexpected.
“What did you say?”
Johnny Myren asked for clarification after hearing him out, and Attorney Gibson repeated himself.
“They said if we have something to discuss, we should meet in person. They say the representatives from Legend Games and Continue Capital will come together.”
“Ha…”
Johnny Myren let out a short laugh.
So the lawsuit was just a bluff after all?
They had filed first, but deep down they wanted an amicable settlement. Well, that would be the best way to minimize losses.
Johnny Myren nodded.
“Fine. Tell them to come here.”
We met in a conference room at the Mayners Hotel in Cupertino, California.
Through the window behind the room, Enple’s headquarters loomed in the distance.
I met the two men there with CEO Tom Scott and Attorney Harrison.
“It’s a pleasure to meet you. I’m Han Miru.”
The white man in his late forties took my hand and shook it firmly.
“Johnny Myren. I’ve heard about the co-CEO of Continue Capital for quite some time. I had no idea you were this young.”
He oversaw Enstore and, more broadly, Enple’s service division. In the entire company, he was one of the top five power players.
His companion was Don Gibson.
He was the chairman of Gibson & Simpson.
According to Attorney Harrison, it was one of the largest firms in California, one of the top three in the entire United States, and the same firm that had handled the old patent lawsuit between Enple and Yuseong Electronics.
“It’s been a while, Vice President.”
“I hope you’ve been well.”
CEO Tom Scott and Vice President Myren had met once before.
After the greetings, we each signed a confidentiality agreement. It was a contract promising not to disclose anything said here to the outside world.
Needless to say, none of it could be used as testimony in court.
We weren’t exactly being frisked, so if someone wanted to, they could easily hide a recorder or smartphone and capture everything.
But there was no need to worry about that.
Forget legal penalties—if it became known that someone couldn’t even honor a simple agreement like this, who would ever trust them enough to do business?
We took our seats.
Vice President Myren smiled and said,
“We received the complaint you sent over. Quite an interesting read, really. Enple abusing its monopoly power, you say.”
His tone and expression were relaxed, full of confidence.
I answered calmly.
“We received yours as well. It said we had to disclose the revenue generated through external payment methods and pay a thirty percent commission on it.”
“That’s only fair. Because of your two companies’ breach of contract, Enple suffered losses equal to the profits it should have originally earned.”
“I can see how you’d think that.”
The argument had merit.
In the first timeline, Legend Games lost this lawsuit and paid 3.2 million dollars. The amount mattered less than the symbolic point: Enple had to be seen collecting its fee.
He leaned back in his chair.
“So what does Legend Games want?”
“If I tell you, can you agree to it?”
“That depends on what it is. We’re very sorry that the top two games on Enstore were removed. A lot of customers are inconvenienced, and we’ve been getting plenty of inquiries and complaints. I’d very much like to resolve this quickly myself.”
Then he added, almost as a joke,
“And if the lawsuit drags on, won’t it just be good for the lawyers?”
“That’s true.”
People always talk about how terrifying medical bills are in the United States, but legal fees were no joke either.
Companies went bankrupt under that burden all the time. Sometimes people even filed lawsuits on purpose, hoping to ruin a competitor by forcing them into those costs.
Back when Yuseong Electronics and Enple fought over patents, both sides had spent more than 400 million dollars on legal fees.
That astronomical sum hadn’t gone to the rival company at all, but straight into the lawyers’ pockets.
No wonder people said corporate disputes only fattened the law firms.
Of course, neither Enple nor we were in danger of being crushed by legal fees. But if we could resolve this without spending a fortune, that would be better for everyone.
Vice President Myren smiled gently.
“I don’t think Legend Games or Block Games wants this to turn into the worst-case scenario either. So please, feel free to tell us what you want.”
He made it sound as if he were magnanimously granting us an audience from a position of strength.
I had come with the hope that there might be room to talk, and honestly, I was a little surprised.
In the first timeline, Enple hadn’t even bothered to negotiate. But now, it felt as though they wanted to wrap this up quickly.
Was that because Block Valley had been added into the mix? No… probably not. Then was it because of Continue Capital?
At any rate, since he’d told me to speak freely, I decided to do exactly that.
“We have three demands.”
He smiled. “Three, huh? All right, let’s hear them.”
I held up one finger at a time and said,
“First, lower the thirty percent commission. Second, allow external payment links inside the app. Third, introduce another app marketplace on NOS besides Enstore. If you agree to those three conditions, we’ll withdraw the lawsuit.”
Vice President Myren’s face stiffened.
“What exactly do you think you’re doing?”
I gave a small snort of laughter.
“You asked me to tell you what we want, so I did. Has the federal court somehow ruled that you must charge thirty percent and ban external payment links? Or is the contract Enple wrote itself some sort of Magna Carta that can never be revised?”