Microsoft banks on regulations to build a mobile games store

Apple and Google have had a stronghold on mobile app distribution through their app store. While Google’s Android allows alternative app stores, they have failed to compete in any significant way with the Play Store. Microsoft is now preparing to build its own mobile games store to break this duopoly, and the company is banking on regulations for that.

In an interview with the Financial Times, Microsoft’s gaming head Phil Spencer said that the EU’s Digital Market Act (DMA) — which will come into effect in March 2024 — will help the company fulfill the mobile app store ambition. DMA will allow companies to load their app stores on iPhones and Android phones by asking Apple and Google to open up their systems.

“We want to be in a position to offer Xbox and content from both us and our third-party partners across any screen where somebody would want to play,” Spencer told FT.

“Today, we can’t do that on mobile devices but we want to build towards a world that we think will be coming where those devices are opened up.”

Microsoft has had troubles with Apple around its Cloud Gaming app. The iPhone maker required users to download each game available to play through Microsoft’s cloud offering — including Fortnite. So Microsoft now asks people to sign in through the Safari browser and follow instructions, which are not easy as downloading an app from the App Store.

Given Apple’s restrictions around downloads and in-app purchases, Microsoft’s move to start building its own games store is not unusual.

Apple and Google didn’t immediately respond to queries about Microsoft’s ambition to build an alternative app store.

In the last five years, Microsoft has acquired a ton of games studios including Ninja Theory, Playground Games, Bethesda owner Zenimax Media, and most recently Activision Blizzard. The company’s latest acquisition can give it a footing in the mobile market through a separate store with titles like ‘Call of Duty Mobile’ and ‘Candy Crush Saga’ along with upcoming releases. Notably, Activision Blizzard has been making significant money from mobile games. So controlling distribution through its own store will give Microsoft an edge.

The biggest challenge Microsoft is facing is completing the Activision Blizzard deal as regulators from the US, the UK, and the EU are scrutinizing the merger. Last month, the UK’s Competition and Markets Authority (CMA) said it is launching an antitrust investigation into the deal as it could harm the country’s gamers with ‘higher prices, fewer choices.’ Microsoft has tried to appease the regulators by saying it is ready to provide a long-term commitment to make popular games like ‘Call of Duty’ available on competitors’ platforms.

The tech giant recently signed a 10-year deal to bring Xbox games to Nintendo consoles. What’s more, Microsoft has also agreed to get these games to cloud gaming services from Nvidia, Boosteroid, and Ubitus.