Microsoft reveals why Xbox mobile app store has been delayed

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Microsoft reveals what--or who--stood in the way of its Xbox mobile store ambitions in a new court filing.

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With consoles stagnating, mobile represents a big growth vector for Xbox, and making a bigger splash on mobile was a big reason why Microsoft shelled out $68.7 billion to buy Activision in 2023. But things haven't gone according to plan for Microsoft, and instead of launching the dedicated Xbox app that it wanted to, the company had to settle for web-based mobile storefront due to restrictions.

Now in a new amicus brief filed in the Epic v Apple appeals case (Epic Games, Inc. v. Apple Inc., 25-2935, 9th Cir.), Microsoft essentially holds Apple responsible for thwarting its mobile store ambitions.

Here's a quick run down of what's happening: In the last five years of the Epic v Apple trial, Apple's App Store policies have been deemed anti-competitive and Apple has been court-ordered to not only allow third-party payment systems (this means you'll by directly from a developer or publisher from a store outside of Apple's purview), but to also stop trying to steer consumers away from buying content in places outside the App Store.

Apple defied this order, and was found to have violated the injunction ordered by the courts. Apple also stalled in its approval of Fortnite, which had been submitted earlier this month. Fortnite's application was eventually rejected by Apple.

Epic lawyers pounced on this finding, and argued that Apple should be ordered to allow Fortnite on the App Store.

Apple eventually relented and now Fortnite is back on the App Store, with an added bonus: gamers can now buy directly from Epic, theoretically reducing the cost of Fortnite microtransactions while Epic also retains more of the revenue.

Essentially, Microsoft had been holding off on releasing its Xbox app store until such a development were made--until it was safe, Microsoft didn't want to jeopardize the plans it had for a grand cross-platform ecosystem.

Read more:Microsoft seeks partners to build Xbox mobile store

The fight isn't over, though.

Apple is trying to appeal the case, and has filed for a motion to stay pending appeal. If granted, this would pause the court's ruling until the appeals process is over.

As to why the Xbox app isn't on Android, the same thing had happened in the Epic v Google trial. Courts found similar effects with the Google Play Store, and ruled that Google must also allow access to third-party payment processors. Google filed for a stay and received it, but the court order didn't apply to third-party payment systems.

Microsoft isn't ready to launch its mobile store until the conditions are right.

Below we've included a snippet of what Microsoft said about Apple's involvement in the Xbox mobile app store plans:

Microsoft long has wished to offer users of its apps an alternative to Apple's IAP (in-app purchases) in the apps themselves, but Apple's policies have prohibited such alternatives.

The district court's injunction allows Apple to maintain its in-app exclusivity but at least should have enabled Microsoft to offer consumers a workable solution by launching its own online store - accessible via link-out - for in-app items to be purchased off-app and used in games or other apps.

And that is what Microsoft wants to do. But even this solution has been stymied by Apple.

Prior to the district court's most recent order, Microsoft had been unable to implement linkedout payments (or even inform customers that alternative purchase methods exist) because of Apple's new anti-steering policies that restrict Microsoft's communication to users and impose an even higher economic cost to Microsoft than before the injunction.

The lack of a functioning in-app link has significant effects on the discoverability and viability of Microsoft's online store. Without a link, few users ever learn that an alternative to IAP exists; even fewer make use of that alternative.

Similarly, Microsoft has long sought to enable Xbox app users on iOS to both buy and stream games in the app from the cloud or their other devices. Apple's policies have restricted Microsoft's ability to offer these functionalities together; the injunction allows Microsoft to explore this possibility.