Microsoft plans mobile games app store to rival Apple and Google

Microsoft is preparing to launch a new app store for games on iPhones and Android smartphones as soon as next year if its $75 billion (€70 billion) acquisition of Activision Blizzard is cleared by regulators, according to the head of its Xbox business.

New rules requiring Apple and Google to open up their mobile platforms to app stores owned and operated by other companies are expected to come into force from March 2024 under the EU’s Digital Markets Act.

“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,” said Phil Spencer, chief executive of Microsoft Gaming, in an interview ahead of this week’s annual Game Developers Conference in San Francisco.

“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.”

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Microsoft is fighting with regulators in the US, Europe and Britain, which have all raised concerns about the potential impact on competition from the owner of the Xbox console buying the developer of Call of Duty, one of the world’s most popular games franchises. PlayStation maker Sony has been a vocal opponent of the deal.

However, Mr Spencer argued that the deal could boost competition in what he called the “largest platform people play on” – smartphones – where Apple and Google operate what some antitrust authorities have called a “duopoly” over distribution of games and other apps.

“The Digital Markets Act [DMA] that’s coming – those are the kinds of things that we are planning for,” he said. “I think it’s a huge opportunity.”

Under the DMA, the EU is expected to designate Apple and Google as “gatekeepers”, requiring them to change the rules that govern how apps are distributed on iPhones and Android devices. However, the big tech companies could appeal against the designation, delaying enforcement beyond next March’s deadline.

While acknowledging it was hard to predict exactly when Microsoft would be able to launch its own store, Mr Spencer said it would be “pretty trivial” for the company to adapt its Xbox and Game Pass apps to sell games and subscriptions on mobile devices. Microsoft’s current lack of mobile games was an “obvious hole in our capability” that it needed Activision Blizzard to fill, he added.

Hit titles such as Call of Duty Mobile, Diablo Immortal and Candy Crush Saga, as well as more in development, would be “critically important” in attracting players away from Apple and Google’s marketplaces to an Xbox mobile store, he said.

Microsoft and Apple have tussled for years over how the software giant’s cloud-based gaming service, which is part of Xbox Game Pass, operates on iPhones.

Microsoft has argued Apple’s App Store rules restrict its ability to offer cloud gaming through a single app that runs natively on the iPhone, forcing users to access the service via a web browser, resulting in lower performance. – Copyright The Financial Times Limited 2023