Microsoft is reportedly building an Xbox mobile app store that will allow users to download and install games directly on mobile devices. The “next-gen” Xbox mobile store was first hinted at in February by the company, along with announcing a set of “open app store principles” for the Microsoft Store on Windows, as well as the yet-to-be-launched marketplace for published games. The principles were formulated in the process of seeking regulatory approval for Microsoft’s proposed $69 billion (approximately Rs 56,760 crore) takeover of Activision Blizzard, which is currently under investigation by the UK’s Competition and Markets Authority (CMA), and EU antitrust regulator.
In a response to the U.K.’s CMA requesting Microsoft to provide background documents on its acquisition of Activision Blizzard, the company cited a desire to help expand its mobile gaming business as its motivation for acquiring the Call of Duty developer. Microsoft said in the filing that it wanted to build on Activision Blizzard’s “existing community of gamers,” which would allow them to challenge Google’s Play Store and Apple’s App Store by offering “well-known and popular content,” This will push users to “try something new”. “Xbox will seek to expand the Xbox Store to mobile devices to attract gamers to the new Xbox mobile platform,” Microsoft added in its response document.
With the filing, Microsoft made it clear that it wants to compete with Google and Apple in providing the mobile gaming market and platform. However, with Apple’s policies blocking third-party app stores on iOS, Microsoft’s vision of competing with Apple seems a bit far-fetched, at least for now.
Microsoft said the Activision Blizzard acquisition would give the company “a place in gaming,” an area the company believes is the most popular download category on mobile devices, while generating the largest revenue in in-app purchases in the App Store.
“In the first half of 2022, mobile gaming revenue and ancillary revenue from the King division and games like Call of Duty: Mobile accounted for more than half of Activision Blizzard’s revenue. Mobile customers accounted for approximately its […] monthly active users], ” Microsoft said in the filing. “The deal will bring much-needed expertise in mobile game development, marketing and advertising,” the document added.
The response to the filing was based on Microsoft’s argument that the acquisition was part of its foray into mobile gaming, while the CMA’s investigation was largely focused on leveling the playing field in console gaming. Microsoft’s dedicated webpage for the Activision-Blizzard acquisition has published a graph depicting the gaming market worth $165 billion (approximately Rs. 13.72 trillion) in 2020, with consoles accounting for 20% at $33 billion (approximately Rs. 2. 74,000 crore), PC accounted for 24% at $40 billion (approximately Rs 3,330 billion), while mobile gaming accounted for the largest share at 51% at $85 billion (approximately Rs 7,070 billion).
The deal also faces challenges from the U.S. FTC and EU antitrust regulators. However, EU antitrust regulators are expected to make an initial decision on the issue by November 8 to approve Microsoft’s proposed $69 billion (approximately Rs 5,676 crore) takeover of Activision, after which the European Commission is also expected to open a The four-month probe will look into regulatory issues surrounding big tech “bulldozer” acquisitions of this nature.
The planned acquisition of the already culturally troubled company, once completed, would make it the largest company the gaming industry has ever seen and would help Microsoft better compete with leaders Tencent and Sony. Activision Blizzard has been hurt recently by allegations of sexual harassment by employees and former employees against the company.
Last July, the California Department of Fair Employment and Housing (DFEH) sued Activision Blizzard for promoting a culture of “persistent sexual harassment.” The gaming company also reached an $18 million (approximately Rs 1.5 crore) settlement with the U.S. Equal Employment Opportunity Commission in September over other allegations of sexual misconduct.
Microsoft has yet to detail how these cultural issues within the company will be addressed after the acquisition.
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