Microsoft is in talks with partners for the launch of a mobile gaming store, set to take on Apple and Google’s dominant positions in the business.
Phil Spencer, Head of Microsoft’s Video-Games Division said, “It’s an important part of our strategy and something we are actively working on today not only alone, but talking to other partners who’d also like to see more choice for how they can monetize on the phone.”
He declined to reveal a specific launch date, which has been suggested to be next year.
“I don’t think this is multiple years away, I think this is sooner than that.”
Earlier this year, Microsoft expanded its Game Pass subscription service to 11 new Latin American countries, which led to a 7% increase in customers.
Peru and Costa Rica stood out in terms of interest and accounted for almost half the new signups. Brazil was the second largest market for the Game Pass.
“In many ways Brazil leads a lot of the trends that we see globally,” Spencer said. Mobile gaming is also critical in Brazil, and that is where Microsoft is lagging.
Recently, Microsoft completed its $69 billion acquisition of Activision Blizzard, which Spencer says was motivated in part by Activision’s strong presence in mobile gaming, which includes games like Candy Crush and Call of Duty Mobile.
He argued the deal was necessary to boost Microsoft’s small footprint in the mobile-gaming market. The delay with the closing of the deal kept the company from attempting to move forward with its app store plans.
The deal was completed in October, almost two years after it was announced.
Since announcing the merger, the company has changed because after years of strong growth in the mobile gaming market, it saw a market downturn. Last year, players spent 5% less than they did in 2021, with the trend expected to continue.
The mobile store from Microsoft would also be entering a challenging regulatory climate around smartphone-based digital marketplaces.
Epic Games, the creator Fortnite, has sued Apple and Google over their iOS and Android store practices. It alleged they are unnecessarily restrictive and unfair.
Apple won’t allow competing stores on its iPhone and iPad platforms and collects a 30% cut of sales for most purchases. There have been game makers taking issue with said fees.
Epic lost the battle with Apple, but asked the US Supreme Court to step in. Apple itself is petitioning the court to reverse an order which would force it to let developers steer customers to other payment methods.
Epic is still fighting Google, which allows third-party app stores on its devices.
The EU’s Digital Markets Act could force Apple to open up its app store regulation, which the company are challenging.
Microsoft could use long-standing resentment against market leaders to support its mobile store. The cloud gaming technology on Xbox already allows users to stream games to smartphones.
Phil Spencer concluded, “We’ve talked about choice, and today on your mobile phones, you don’t have choice. 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.”
Gamers that met Spencer at a Microsoft fan event asked him to do more with Blizzard’s World of Warcraft game for local customers. He said he plans to take the feedback to the newly acquired team.
