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  • Kyle Chua

Microsoft Wants to Build Xbox Store on Mobile Devices

Microsoft has quietly revealed it’s building an Xbox store on mobile devices that’ll rival Apple’s App Store and Google’s Play Store.

Credit: Microsoft

The plans were first spotted by The Verge as part of Microsoft’s filings with the UK's Competition and Markets Authority (CMA) regarding its US$68.7 bid to acquire game publisher Activision-Blizzard. The software giant supposedly pursued the deal to help build out its mobile presence, including launching an Xbox platform and store. The content of which leverages existing mobile properties of Activision-Blizzard and King like the popular Call of Duty: Mobile and Candy Crush Saga.

"The transaction gives Microsoft a meaningful presence in mobile gaming," reads the filings. "Mobile gaming revenues from the King division and titles such as Call of Duty: Mobile, as well as ancillary revenue, represented more than half of Activision Blizzard’s ... revenues in the first half of 2022."

The filing also indicates that the Activision-Blizzard deal could help Microsoft gain some "much needed expertise" in mobile game development, marketing and advertising. But currently, the CMA is focusing its investigation on console gaming rather than mobile.

Microsoft sees mobile gaming as an important market that could help boost its overall revenue. According to one of the company's graphs, mobile gaming accounted for more than half of the US$165 billion total revenue of the gaming market in 2020. Consoles and PCs, in contrast, only accounted for 20% and 24%, respectively.

Call of Duty: Mobile, for instance, in February of this year announced that it has crossed US$1.5 billion in microtransaction sales across both iOS and Android after only two and a half years. This means there's a lot more money to be made on mobile than on console or PC.

Call of Duty: Mobile. Credit: Activision

Microsoft's entry, however, won't come without some resistance, which the company seems to be well aware of. Launching a new mobile storefront, it believes, would require a "major shift in consumer behaviour". And that's if it even manages to launch in the first place. Being the operators behind the two biggest mobile software in the market, iOS and Android, Apple and Google's respective app stores have virtually remained unchallenged for years and years.

Apple has been quite strict with its policies regarding the App Store. The Cupertino company booted Fortnite from iOS after its developer and publisher Epic Games bypassed the App Store's payment systems and took direct payments for microtransactions. Epic would later take Apple to court over what it claimed were unfair practices that restrict app makers on the App Store from using third-party payment systems. Apple's App Store policy requires all developers to adopt its own payment systems as it takes a cut from any in-app transactions.

Microsoft wants to challenge Apple and Google's policies with its own open store philosophy. Part of this is supposedly allowing developers to use the payment system of their choice. They won't be forced to adopt Microsoft's, and they won't be disadvantaged by their choice. The company likely wants to use this same philosophy when it launches the Xbox mobile platform to attract developers.

The possible problem that Microsoft could face though is that it probably won't be able to compete with the App Store and the Play Store when it comes to app exposure. iOS and Android have millions and millions of users. If Apple, for example, doesn't allow the Xbox store on the App Store, which seems likely, the number of users is already cut significantly. Microsoft previously failed to bring Xbox games to iOS and could only offer Game Pass via browser streaming. So, it might be forced to settle with just Android users if Apple doesn't change its stance.

Credit: Reuters

As for how the Xbox store could possibly attract users, Microsoft might have to offer exclusives that aren't available on the App Store or the Play Store. That's perhaps one of the best ways it can have a strong advantage out of the gate. Once the Activision-Blizzard deal is completed, Microsoft can pull the mobile games it owns from other stores and bring it to its own. Considering the popularity of Call of Duty: Mobile, the company can entice fans of the game to make the switch and continue to reel them into the platform from there.

Microsoft has also developed a relationship with Epic Games, which it supported against Apple in court. The company can take advantage of this and have Fortnite, another game with a huge player base, on the Xbox mobile store. Until today, Apple has yet to allow Fortnite back on iOS.

Of course, at this point, these are all just speculation. Microsoft isn't even certain yet if it'll launch the Xbox store, which, as previously mentioned, depends a lot on the Activision-Blizzard deal. Regulators are still weighing that deal to see how it could affect competition in the market.

  • Microsoft has quietly revealed it’s building an Xbox store on mobile devices that’ll rival Apple’s App Store and Google’s Play Store.

  • The content of which leverages existing mobile properties of Activision-Blizzard, which the software giant is in the process of acquiring, like the popular Call of Duty: Mobile.

  • Microsoft sees mobile gaming as an important market that could help boost its overall revenue, having accounted for more than half of the total gaming earnings in 2020.

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