Microsoft Plans to Create Its Own Mobile App Store to Compete With Google and Apple

In documents filed with the UK’s Competition and Markets Authority (CMA) as part of its merger deal with Activision Blizzard, Microsoft has secretly divulged specifics of its ambitions for a ‘next-generation games shop’ that it has been hinting at since at least 2022.

Microsoft’s major goal in acquiring Activision Blizzard, according to the petition, is to strengthen its position in the mobile gaming market. She may open an Xbox mobile gaming platform and retail business there. In its legal papers, the firm makes the following claims:

The inclusion of Activision Blizzard’s games in Microsoft’s planned next-gen, cross-platform (including mobile) gaming store is a major benefit of the acquisition. To expand the Xbox Store on mobile devices, Microsoft plans to draw gamers from Activision Blizzard’s existing gaming communities.

Nonetheless, a dramatic shift in consumer behavior is necessary before Google Play and the App Store on mobile devices can expect to see a significant loss of customers. Microsoft is banking on gamers being open to new experiences thanks to the delivery of recognizable and well-liked content.

Microsoft may exploit the success of titles like Call of Duty: Mobile and Candy Crush Saga, developed by Activision and King, respectively, to create a gaming platform that can take on the likes of Google Play and the App Store.

It’s unlikely that Microsoft will attract many iPhone users in the near future because of Apple’s decision to prohibit the installation of third-party app stores on iOS. But it isn’t stopping Microsoft from launching an app shop for Xbox games on mobile devices.

Microsoft’s mobile gaming push comes as the corporation promotes Xbox Cloud Gaming as a solution for mobile gaming on the latest handheld devices. Microsoft was fast to add support for Xbox Cloud Gaming to Valve’s Steam Deck, and it has since partnered with Logitech and Razer to bring cloud-focused handhelds to market. Therefore, it’s not limited to just phones and tablets, but may be utilized in other places as well, for mobile game advertising.

What’s at stake isn’t just the hardware, but also a substantial sum of money. Games are a major revenue generator for app stores and consistently rank as the most downloaded category of mobile apps. In light of this, Microsoft offers a description of the possibility:

Thanks to this agreement, Microsoft will have a major impact on the mobile gaming industry. More than half of Activision Blizzard’s revenue in the first half of 2022 came from mobile gaming, thanks to the King division and games like Call of Duty: Mobile, as well as ancillary revenue.

About 75% of its MAUs come from mobile users (Monthly Active Users). At now, Microsoft does not have a big presence in the mobile gaming arena; the acquisition of Playwild will provide much-needed experience in mobile game creation, marketing, and advertising. To help Xbox Game Studios, Activision Blizzard will be able to impart its knowledge and experience in creating and releasing mobile games.

CMA focused primarily on console games, and scarcely mentioned Microsoft’s possible expansion into mobile gaming at all (which Microsoft says makes up an increasingly smaller portion of the overall market). The global gaming market is expected to be worth $165 billion in 2020, according to a graphic published by Microsoft on the site dedicated to its acquisition of Activision Blizzard. Of that total, consoles will account for $33 billion (20%), personal computers for $40 billion (24%), and mobile games for $85 billion (51%).

Competing with Google Play and Apple’s App Store is tough, so Microsoft will need help from outside developers.

Microsoft Plans to Create Its Own Mobile App
Microsoft Plans to Create Its Own Mobile App

It seems the corporation will stick to rules that let programmers open their own app stores on the Xbox mobile platform and provide their own payment methods to handle in-game sales. Without a doubt, this is a perk that Apple does not provide.

Microsoft has promised that the next Xbox mobile store would follow the same guidelines (which may be enough to lure developers to the platform). Epic Games, for example, may be interested because it has recently joined forces with Microsoft to oppose Apple’s App Store guidelines.

If the acquisition of Activision Blizzard goes through, Microsoft will gain access to Activision Blizzard’s 30 internal game development studios as well as its eSports development resources. The IT behemoth made a $7.5 billion purchase in 2020. ZeniMax Media, Inc., the parent company of Bethesda Softworks, id Software, Arkane Studios, etc.