In today’s mobile landscape, Microsoft faces a challenging scenario, where it must rely on Apple’s and Google’s platforms to push its mobile computing ambitions forward. Be it the likes of Microsoft Edge, Microsoft Copilot, or Xbox Cloud Gaming, the tech giant is finding its path blocked by these dominant players whenever it comes to mobile phones, and frankly, it’s no surprise.
The latest battleground is Android, a platform that hasn’t been particularly welcoming to third-party developers. This scenario has prompted Microsoft, Epic Games, and even Samsung to consider launching their own app stores to dodge the hefty fees imposed by Google. But realistically, since a mere fraction deviates from using Google Play for app downloads, the likelihood of a third-party app store gaining real popularity on Android is slim. Despite these odds, attempts persist. Microsoft’s own Android app store tailored for Xbox mobile games has found itself stalled pending U.S. court rulings on Google’s regulations governing app distribution.
Just yesterday, Sarah Bond took to BlueSky to provide insights into the current status of Xbox’s mobile app store on Android. “Our goal at Xbox is to provide players with choices regarding how and where they can play,” noted Bond, highlighting the aspiration to enable game purchases directly from the Xbox app. This plan aimed to kick off with the Google Play Store on U.S. Android devices while other app stores adjust to consumer needs. Yet, Google isn’t about to let these plans unfold without resistance.
According to Google’s spokesperson through PureXbox, Microsoft had all along the ability for users to play and purchase Xbox games from within their app, albeit opting out was Microsoft’s choice. Google’s stance stresses, “The Court’s impulsive implementation orders could impact Google Play’s capacity to ensure a safe user experience. Neither Microsoft nor Epic seem to consider these security aspects seriously. Our priority remains in maintaining a healthy ecosystem beneficial for everyone.”
Tim Sweeney, CEO of Epic Games, charged in with criticism, denouncing Google’s statement as deceitful. Via Twitter, Sweeney wrote, “Shame on them for knowingly demanding a 30% share that exceeds the profits from game streaming. They’re well aware, especially after investing vast sums into the failed Stadia venture.”
Now, let’s unravel what’s really at play here.
Tim Sweeney’s assertion about Google’s misleading narrative holds water. Google failed to acknowledge that Microsoft’s and Epic’s departure from Google Play is due to the considerable 30% cut on their software sales. Consoles like Xbox, PlayStation, and Nintendo impose analogous fees, but usually sell their hardware with minimal profit margins as a way to bolster the platform. Conversely, Apple earns a premium on its hardware aside from its 30% developer fee, essentially maximizing its gains.
However, Google doesn’t primarily produce hardware, with minimal margins on devices like Pixel phones, and their Pixel tablets reportedly getting the axe. Android, in essence, revolves around software and Google Play services orchestrated on third-party devices, further bolstered by its pervasive advertising empire—an empire the U.S. recently branded as monopolistic. To access Google Play, hardware partners are obligated to frontload Google’s apps and services onto devices, ensuring Google’s dominance not only remains but gets bolstered through default applications.
This middleman role has irked developers like Microsoft and Epic, especially since they can’t broaden businesses like cloud gaming due to Google’s 30% app revenue cut. In 2024, cloud gaming remains largely unprofitable, hindered by restrictions on in-app transactions within Google Play and a lack of discoverability without a Play listing escalating Microsoft’s user acquisition expenses.
As much as I personally have my grievances with Google, particularly its competitive behaviors stunting Windows Phone, there’s a degree of rationality to their standpoint. With the U.S. Department of Justice casting Google’s ad domain as monopolistic, they might need to explore alternate revenue avenues for Android if forced to trim down its ad flagship. Playing devil’s advocate, it’s strategic for Google to resist yielding two Android revenue sources under pressure.
Microsoft’s policy of taking 30% from Xbox developers stems from pricing Xbox Series X|S hardware as consumer-friendly as possible, though they’ve hinted at opening future Xbox consoles to third-party storefronts like Epic Games or Steam. This idea, however, seems distant from realization. Meanwhile, Microsoft’s Microsoft Store slashes a smaller 12% cut compared to the average 20-30% on PC games.
Windows’ open platform emergence arguably benefits consumers more than the restricted ecosystems of iOS or Google-brand Android, where any cut by Microsoft is absent, allowing businesses like Steam to thrive. Though Android offers more flexibility than iOS with simple side-loading or pre-installed app stores, its grip over Google Play distinctly favors Google’s products. The Kindle app for instance had to scrap in-app purchases, while Google proceeds to sell books through its own platform.
Ultimately, the legal courts will decide these disputes’ direction. Yet maybe, just maybe, Microsoft wouldn’t be facing these hurdles if it had stayed the course in nurturing its own mobile platform—yes, the Windows Phone. And that’s the bottom line!
