Microsoft Is Readying an Xbox App Store for iPhone

Although Microsoft has had to settle for a web-based version of Xbox Game Pass to fit within Apple’s guidelines, the Xbox developer hasn’t given up on its hopes of someday delivering a more comprehensive gaming experience to iPhone and iPad users.

According to the Financial Times, Microsoft is preparing to launch its own app store on the iPhone as soon as next year — provided everything lines up properly.

For one, it appears that Microsoft’s plans are at least somewhat conditional on closing its $75-billion deal to acquire Activision Blizzard. That’s because this acquisition would provide Microsoft with the critical mass of titles that would be necessary to make its own app store a success.

Of course, the other key requirement is for Apple to actually start allowing other app stores on the iOS platform. However, Microsoft Xbox chief Phil Spencer feels that part is a done deal.

When it comes to the European Union, he’s likely right. The EU’s Digital Markets Act is expected to come into force in March 2024, which will mandate that Apple open up its App Store ecosystem to competition. How that will actually play out in practical terms is a bit more complicated, though; Apple will undoubtedly look for ways in which it can comply with the letter of the law while maintaining as much control as possible over its platform.

For instance, the new EU rules only say that Apple and other large online platforms must “allow and technically enable the installation and effective use of third-party software applications or software application stores.” This means that Apple could get away with providing a way to side-load individual apps without actually opening the doors to full-fledged third-party app stores.

It’s also unclear how this will apply outside of Europe. While the EU intends to enforce these new rules quite vigorously, it may take some time before other markets like the U.S. follow suit.

The Xbox Mobile Store

Nevertheless, Microsoft wants to make sure it’s ready, and should the Activision Blizzard deal go through, it aims to have an Xbox Mobile Store on the iPhone and Android where titles like Call of Duty Mobile, Diablo Immortal, and Candy Crush Saga will be sold — and likely exclusively.

Spencer told the Financial Times that having these hit titles in a Microsoft-owned store would be “critically important” to attracting players away from Apple’s App Store and Google’s Play Store, suggesting that these titles would be pulled from other marketplaces in an effort to make the Xbox Mobile Store the only source for some of the most popular titles.

Some fear this could bring a kind of fragmentation to the iPhone ecosystem where customers would have to install and deal with multiple app stores, each with different payment systems and terms and conditions, just to have access to the same range of apps that are currently available from Apple’s App Store. While that’s no different from the way commerce works in most other scenarios, it would be a new way of doing things on the iPhone, which has had only a single App Store since its inception 15 years ago.

Still, Microsoft’s acquisition of Activision Blizzard is far from a done deal, and it’s perhaps ironic that it’s facing similar anticompetitive concerns to the ones that it’s levied at Apple.

Chief among these is the fear that Microsoft would make Activision’s games exclusive to its Xbox platform. While it’s tried to make the argument that it would be shooting itself in the foot by doing such a thing, regulators in the U.S., U.K., and Europe aren’t convinced. Microsoft even went so far as to promise the Call of Duty would be available for up to 10 years on rival consoles, but regulators have heard that song before; as the Financial Times notes, Microsoft made a similar assurance to the EU when buying games company ZeniMax in 2021, but reversed course before the ink was even dry on the deal.

Even if Microsoft manages to convince regulators to approve its acquisition of Activision Blizzard, it’s likely to face an uphill battle getting its games onto the iPhone — at least in the way it wants to. In addition to doing the bare minimum to comply with the EU’s new rules, Apple is likely to appeal the “Gatekeeper” designation, which could push the enforcement of the EU’s Digital Markets Act against Apple well beyond next March when it’s otherwise expected to go into effect.

Until then, Microsoft’s only recourse will be to either offer these games through its existing browser-based Xbox Game Pass, or comply with Apple’s App Store rules that require each app to be listed separately on the App Store — something that’s already the case with Activision’s titles such as Call of Duty Mobile. At most, Microsoft could create an app to curate its individual game titles, but it would still need to submit those titles through the App Store, and, most significantly, pay the necessary commissions to Apple for the apps and all in-app purchases.