Microsoft’s Xbox head, Phil Spencer, said that if regulatory authorities approve its $68.7 billion acquisition of Activision Blizzard, the company plans to launch a new game app store on iPhones and Android smartphones as early as next year. According to the EU’s Digital Markets Act (DMA), Apple must open its mobile store after March 2024, forcing the platform to allow users to install and uninstall software outside of the official store and prohibiting large companies like Apple and Google from obstructing developers from integrating third-party payment methods to bypass platform fees. Spencer said in an interview before this week’s annual game developer conference in San Francisco, “We want to offer Xbox and our third-party partners’ content on any device people want to play on. Today, we can’t do that on mobile devices, but we want to build a world with open devices.”
Microsoft’s Head of Gaming, Phil Spencer, believes that the acquisition of Activision Blizzard by Microsoft will improve competition in the mobile gaming market. He sees an opportunity in the upcoming Digital Markets Act, which designates Apple and Google as “gatekeepers” and requires them to change their app distribution rules. However, he acknowledges that Apple and Google are unlikely to give up their profits easily and may appeal the order or delay enforcement. Spencer admits that Microsoft is unable to predict when its own store will be launched, but he believes that adjusting Xbox and Game Pass apps on mobile devices is “fairly insignificant”. He adds that Microsoft’s current weakness is mobile gaming, which Activision Blizzard can help fill. Spencer highlights popular games such as Call of Duty Mobile, Diablo Immortal, and Candy Crush as crucial for attracting Apple and Android players to the Xbox mobile gaming store. Furthermore, Microsoft and Apple have been in a long-standing dispute over how Microsoft’s cloud-based gaming service, Xbox Game Pass, can run on iPhones due to App Store rules. Spencer argues that these rules limit Microsoft’s ability to provide cloud gaming on iPhones, forcing users to play through a browser and compromising their gaming experience. However, Apple denies blocking cloud gaming, and its App Store rules require game publishers to list each game separately and prohibit users from purchasing other games within the app. The acquisition of Activision Blizzard by Microsoft has raised competition concerns, and the Competition and Markets Authority (CMA) has proposed divesting the Call of Duty franchise to address these concerns. Microsoft argues that divesting Call of
Duty would be unnecessary and would not address the competition concerns raised by the acquisition. Microsoft’s position is that the acquisition will bring more competition to the gaming market by creating a more diverse range of gaming experiences for players. The company also argues that the acquisition will benefit consumers by improving innovation, increasing investment, and expanding access to games.
In terms of the Digital Markets Act, Microsoft sees an opportunity to challenge the dominance of Apple and Google in the mobile gaming market. The Act aims to increase competition and prevent the abuse of market power by large tech companies. Microsoft believes that the Act’s requirements for app distribution and payment systems will create a more level playing field for all app developers, including those in the gaming industry. However, Microsoft acknowledges that Apple and Google are likely to resist any attempts to change their app distribution rules.
In summary, Microsoft’s acquisition of Activision Blizzard is expected to have a significant impact on the gaming industry, particularly in the mobile gaming market. The company sees an opportunity to challenge the dominance of Apple and Google, but it also acknowledges that this will not be an easy task. The acquisition has raised competition concerns, and Microsoft is currently in discussions with regulatory authorities to address these concerns.
