In defense of its Activision Blizzard acquisition, new filings from Microsoft reveal that the tech giant is planning to launch a new Xbox Mobile Platform to distribute games on mobile as a direct rival to platforms like the iOS App Store.
As reported by The Verge, Microsoft is trying to convince the UK’s Competition and Markets Authority to let it buy Activision Blizzard for $68.7 billion because of major antitrust concerns levied partly by console rival Sony.
In the filings today, the company stated:
The transaction will improve Microsoft’s ability to create a next generation game store which operates across a range of devices, including mobile as a result of the addition of Activision Blizzard’s content. Building on Activision Blizzard’s existing communities of gamers, Xbox will seek to scale the Xbox Store to mobile, attracting gamers to a new Xbox Mobile Platform.
“A major shift in consumer behavior”
Microsoft says that drawing consumers away from the App Store and Google’s rival Play Store will require “a major shift in consumer behavior” and hopes “that by offering well-known and popular content, gamers will be more inclined to try something new.”
Microsoft has already tapped into the potential of mobile gaming with its Xbox Cloud Gaming service but says the Activision Blizzard transaction “gives Microsoft a meaningful presence in mobile gaming” and increased revenue from titles like Call of Duty: Mobile.
As the report notes, the sticking points for the CMA are mainly the implications the acquisition could have on console gaming and concerns with major titles like Call of Duty. However, Microsoft clearly has designs beyond its console operation to tap into mobile gaming, which it says made up $85 billion of the $165 billion of gaming revenue generated in 2020.
However, there is a significant problem. Microsoft appears to be positioning itself to take a run at Apple exactly as Epic Games did with its controversial Project Liberty attack in 2020. Epic Games circumvented Apple’s payment systems and App Store rules, using the ensuing attention to launch a massive lawsuit and PR campaign, the former of which currently sits in the U.S. appeals court.
As it stands, Apple’s App Store rules do not allow for other third-party stores, such as a potential Xbox Mobile Store or platform, requiring instead that all apps be individually available for installation on devices like the iPhone 14 and its other best iPhones and iPads. The same issue has prevented an Xbox Cloud Gaming app on iPhone, with users left to use a browser instead.