Industry sources suggest Microsoft’s entry into the app store ecosystem will be a pretty muted affair – and certainly not the duopoly-busting breakthrough some had hoped for.
We’re told that a small number of publishers are under NDA with Microsoft already. But several of our contacts were only loosely aware there was an Xbox app store incoming, while others were seeking out more information but coming away with nothing.
Given the widespread desire for a new contender to provide Apple and Google with some competition, there’s remarkably little excitement or information in the market currently.
“There is no detail out there and who knows what the fuck is happening at Microsoft right now,” said one person close to the matter. “It is possible they have no clue either.”
“I am amazed they announced it in the same week they shut down those studios,” they continued. “A perfect way to piss off core gamers is to shut down two of the most beloved studios in your portfolio while announcing a big mobile games shop.”
Microsoft announced it would be launching an Xbox app store earlier this month, stating that it would be platform-agnostic and “start on the web”, suggesting that it’ll be browser-based initially.
One long-time mobile game boss warned of the serious UI and player behaviour hurdles Xbox will have to negotiate for a web-based store to succeed. “You have to create motivations to go to it, like free currency or items not available natively,” they said. “Also, the experience will just stink. If it’s native, I’m curious to understand how that will work with Apple especially. Apple may make it tough too in some way that we can’t predict. It won’t be frictionless.”
“Do they have enough players who are aligned with Microsoft and loyal enough to compete with Google, Apple, and all the other players coming? Stores need a critical mass of users to be successful and it will need to make the revenue needed for Microsoft to prioritise this long-term. Do they need more users than they can get to make it work?”
“Microsoft also doesn’t do stores all that well historically,” they added. “Game stores, app stores in Windows and the like…I’d love to see them prove me wrong, but is it in their DNA?”
Another mobile game CEO we spoke to was more optimistic. “Apple and Google have shut down discovery almost completely,” they said. “Choice is great for players. Walled gardens where you only find games that the platforms surface, or who have massive UA budgets, is the current paradigm and is not good for players.”
“Building a fantastic game is about 20% of success today, so new stores that allow organic discovery helps players and helps small companies who make great games. New gardens is our path out, which will also foster competition, which is currently non-existent.”
One further well-known studio boss added: “I think they will compensate the difference in platform fee to get people on there,” they said. “They will then set up tech to change payment providers away from Apple and Google – this is already possible on Android. And they will have significantly better discovery because they will manage it properly, unlike Apple.”
They also offered a fun ‘what if’ scenario: Microsoft buys Unity – which some believe to be pretty likely right now – and then the tech giant ensures that all mobile games built in Unity are offered incentives and tech support to release on the Xbox app store.
If Microsoft plans to launch a fully native alternative app store, it will have far larger challenges on iOS than Android, says game competition expert and gamesfray.com publisher Florian Mueller. Xbox’s app store would not be “truly platform-agnostic”, as Sarah Bond suggested it would be, as the native sideloading of apps outside the EU is against current Apple policy.
“On iOS they can only do that in the EU because of the Digital Markets Act, not in other markets such as the United States,” he told us. “On Android they can do it worldwide except maybe China.”
Microsoft would also face paying Apple’s Core Technology Fee for those EU-based downloads, which is €0.50 per install of each alternative app store and each game within that. “Imagine a situation where a user downloads a rival app store and two apps: that’s three install fees of €0.50 per year, and one of them is saved if there’s no app store frontend app, but the app store resides on the web,” says Mueller.
“In the short term, the announcement suggests they’re going to encourage gamers to go to that website and sideload apps because they get some in-game goodies in exchange.”
“I’m far more optimistic about the Xbox store having the potential to change the situation on Android,” Mueller adds. “Google has always been more permissive. On iOS they’ll be limited to the EU market, which is only about 12% of global App Store revenues.”
