Microsoft Corp. is actively working on launching a mobile app store that will directly compete with industry giants Apple Inc. and Google, according to Phil Spencer, the head of Microsoft's Xbox video-game division. In an interview at the CCXP comics and entertainment convention in Sao Paulo, Spencer stated that the development of the online store is a crucial part of Microsoft's strategy, and they are currently in discussions with potential partners who are also interested in offering alternative monetization options for mobile apps.
Although Spencer did not provide a specific launch date, he did express confidence that it would not be a long wait. He stated, "I don’t think this is multiple years away, I think this is sooner than that." Microsoft's recent acquisition of Activision Blizzard Inc., known for its successful mobile games like Candy Crush and Call of Duty Mobile, further solidifies the company's commitment to expanding its presence in the $90 billion mobile-gaming market.
However, Microsoft's app store plans have faced delays due to the lengthy process of finalizing the Activision Blizzard deal, which was completed in October after nearly two years. The timing has also been unfavorable, as the mobile gaming market has experienced a downturn in recent years. In 2022, player spending decreased by 5% compared to the previous year, according to Data.ai research.
The regulatory landscape surrounding smartphone-based digital marketplaces presents another challenge for Microsoft. Epic Games Inc., the creator of Fortnite, has previously sued Apple and Google over what it perceives as restrictive and unfair practices in their app stores. Apple does not allow competing stores on its platforms and collects a 30% commission on most purchases, which has drawn criticism from game developers. Epic lost its legal battle with Apple but has petitioned the US Supreme Court to intervene. The case against Google is still ongoing.
In addition to legal challenges, there is hope for change in regulations that could impose greater openness on app store ecosystems. The recently implemented European Union Digital Markets Act could potentially force Apple to allow third-party app stores on its platform, although Apple is challenging the regulation.
Taking advantage of the discontentment among industry leaders, Microsoft may be able to rally support for its app store offering. With its cloud gaming technology already allowing users to stream games to mobile devices, Xbox is positioning itself to be a strong player across various platforms in the future. Spencer emphasized the need for choice, stating, "To make sure that Xbox is not only relevant today but for the next 10, 20 years, we’re going to have to be strong across many screens."
While the specifics of Microsoft's app store plans remain undisclosed, the company's dedication to expanding its reach in the mobile market signifies a drive for innovation and competition in an industry that has long been dominated by Apple and Google. It will be interesting to see how Microsoft's app store will differentiate itself and provide more options for developers and consumers alike in the mobile app ecosystem.