Key to Microsoft’s efforts in mobile gaming is its partnership with Activision Blizzard. Microsoft is covertly constructing an Xbox shop for mobile devices that will rely on Activision and King software.
To compete with Apple and Google, Microsoft is constructing an Xbox mobile shop to directly provide games on mobile devices. The software behemoth initially alluded to a “next-generation” shop it would “create for games” earlier this year, but has now covertly disclosed specifics of the plans in files with the UK’s Competition and Markets Authority (CMA).
Microsoft has been contacted by the CMA, which is looking into the $68.7 billion Activision Blizzard deal. Microsoft claims that a key driving factor for the acquisition was to expand its mobile gaming footprint. It appears that it has intentions for this area, including the development of an Xbox mobile game shop and platform. The corporation states the following in its filings:
The inclusion of Activision Blizzard’s content will make it easier for Microsoft to develop a next-generation gaming shop that works on a variety of platforms, including smartphones. By expanding the Xbox Store to mobile devices and using the existing gaming communities of Activision Blizzard, Xbox hopes to draw users to a brand-new Xbox Mobile Platform. However, a significant change in consumer behaviour is necessary to get users of mobile devices away from the Google Play Store and the App Store. By providing well-known and well-liked material, Microsoft intends to encourage players to try new things.
Microsoft might use the enormously successful mobile games Candy Crush Saga and Call of Duty: Mobile, which are produced by Activision and King, respectively, to help develop a gaming shop that can compete with Google Play and the App Store. Given Apple’s restrictions on third-party software stores on iOS, it is impossible to see Microsoft ever challenging Apple on iPhones. But it’s obvious that doesn’t stop them from planning an Xbox mobile app store.
Microsoft has been positioning Xbox Cloud Gaming as a mobile gaming alternative for new portable devices, and the corporation has officially acknowledged a push for mobile gaming. Microsoft was fast to work with Logitech and Razer for their cloud gaming-focused handhelds after supporting Xbox Cloud Gaming on Valve’s Steam Deck. This suggests that there may be a push towards mobile gaming across a variety of platforms, not just smartphones and tablets.
In addition to hardware, a lot of money is at risk here. The most downloaded apps on mobile devices are games, which also fuel in-app purchases on app stores. Microsoft is obviously interested in the pie. Take a look at how the business presents the opportunity:
Microsoft now has a significant footprint in mobile gaming thanks to the deal. More over half of Activision Blizzard’s revenues in the first half of 2022 came from mobile gaming, mostly from the King division and games like Call of Duty: Mobile. About 75 percent of their MAU is made up of mobile users. The Transaction will contribute much-needed experience in mobile game creation, marketing, and advertising. Microsoft presently has no significant position in the mobile gaming industry. The Xbox game studios will benefit from the lessons Activision Blizzard has learned from creating and releasing mobile games.
The CMA has, however, hardly addressed the possibility of Microsoft entering the mobile gaming sector as part of its probe and is instead primarily concentrating on console gaming, which Microsoft contends is a shrinking portion of the total business. Microsoft’s Activision Blizzard purchase webpage features a graph that estimates the global gaming business to be worth $165 billion in 2020, with consoles accounting for $33 billion (20%), PCs accounting for $40 billion (24%) and mobile gaming accounting for $85 billion (51 percent).
It would be extremely difficult to create a viable alternative to the Google Play Store or the Apple App Store, so Microsoft will need to court third-party developers if it wants to succeed.
By agreeing to a set of guidelines that would let developers to independently manage their own app stores on its Xbox mobile platform and provide their own payment systems to handle in-app payments, the business appears to be laying the framework in this area. That is undoubtedly a feature that Apple does not provide. However, Microsoft stated earlier this year that it is “committed to bridging the gap on the remaining principles over time.” These pledges do not yet completely apply to Xbox systems.
Microsoft claims that the upcoming Xbox mobile shop would follow the same guidelines, which could be enough to entice developers to the platform. Epic Games, a firm that has teamed up with Microsoft in recent years to oppose Apple’s App Store restrictions, is one organisation that could be especially interested.