Microsoft itself has acknowledged that a proposed Xbox app store will have difficulty breaking Apple and Google’s stranglehold on the mobile games market.
The claim is made within the Competition and Markets Authority’s report explaining why it has blocked Microsoft’s acquisition of Activision Blizzard.
The document also references Microsoft’s attempt to buy another mobile game publisher before its bid for Activision Blizzard, but the detail on that has been redacted.
Here’s the section from the CMA’s report on the proposed Xbox app store, which appears to have had its launch date redacted. We’ve bolded up the key sections below:
“Microsoft’s deal model suggests that it would launch an Xbox mobile platform [REDACTED] However, Microsoft also acknowledges there is no guarantee of this platform succeeding, and the timing for Xbox to launch its mobile platform is [REDACTED] to the timing for any associated RCB [relevant customer benefits] to accrue.”
“While we have not seen evidence of technical barriers to creating such a platform within this timescale, we understand that Apple and Google currently control access to their platforms from third-party app stores, and they either currently prohibit rival mobile gaming app stores or impose strict limits on their ability to monetise content,” the report continues.
“As a result, we cannot have confidence that benefits from the claimed Mobile Gaming RCB [relevant customer benefits] can be expected to accrue within a reasonable period or even at all.”
Microsoft revealed plans to launch a rival to Apple and Google’s app stores as part of its efforts to get the Activision Blizzard deal over the line. It served to emphasise the importance of mobile gaming within the takeover proposition, but failed to convince the CMA.
The CMA argues that “Microsoft would need a significant quantity and variety of games” to launch a competitive mobile game platform, so buying Activision Blizzard alone would not be enough.
“This would be likely to involve making agreements with third party publishers in a similar way as it does currently with console and PC games; Microsoft has not provided evidence that its entry attempt would be sufficient relying on Activision’s games alone,” the report continued.
“For this reason, we disagree with Activision’s contention that a competing mobile games store could only be achieved if the content was from a single organisation.”
