Summary
Xboxis aiming to expand its presence in the mobile games market by releasing its own digital storefront on smartphones. These plans follow Xbox’s acquisition of Activision Blizzard, a deal that is a key part of the company’s strategy asit competes with PlayStation.
Acquiring Activision Blizzard has been significant for Xbox, as the mammoth publisher’s console and PC offerings include franchises likeCall of Duty,World of Warcraft, andOverwatch. However, Activision Blizzard’s mobile titles are perhaps even more significant, with exceptionally profitable games likeCandy Crush,Hearthstone, andCall of Duty Mobilefalling under the company’s banner. Mobile games raked in over $100 billion in 2022, dwarfing the profits earned from console and PC games, and the sector’s profitability is expected to continue growing. It should be noted thatCandy Crushhas consistently ranked among the most successful mobile games, raking in over $1 billion in 2022, making it one of the most valuablefranchises owned by Xboxfollowing the Activision Blizzard deal.
As reported byBloomberg, Xbox CEO Phil Spencer commented on the company’s mobile strategy at the CCXP convention in Sao Paolo. Spencer noted that Xbox is working with partners who are interested in “more choice” on mobile platforms, who will help usher in Xbox’s new mobile storefront. He also commented on the timeline for this project, stating, “I don’t think this is years away, I think this is sooner than that,” suggesting that the launch of the storefront may be relatively near.
Xbox faces a few challenges in this area, the most significant of which are the regulations in place on Apple devices.Epic Games has been famously battling Appleover the App Store’s 30% cut on in-app purchases, which massively cuts into the primary form of monetization for mobile games. While Epic’s suit against Apple resulted in a ruling that the former would have to allow for third-party purchase options, the company still does not allow for third-party application stores on its devices. Google also charges publishers a 30% fee on every in-app purchase, but does allow third-party app stores on its devices.
The Ninth U.S. Circuit Court’sdecision to support Apple’scurrent practices may not bode well for Microsoft, as it leaves a hurdle in the way of its mobile marketplace ambitions. Spencer’s comments about choice may be read as a direct challenge to Apple’s restrictive policies, so it will be interesting to see if and how the two tech giants come to an agreement on the matter of anXboxmobile store.
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