The mobile game industry is huge. Games are some of the most popular downloads on mobile and drive in-app purchases on app stores. So Microsoft wants a piece of that pie. Microsoft is building an Xbox mobile gaming store to directly offer games on mobile devices. With this move, Microsoft challenged Apple and Google. Building a successful rival store to the Google Play Store or App Store would be a huge challenge.
Microsoft describes the Xbox Mobile Gaming Store opportunity as follows:
“The transaction gives Microsoft a meaningful presence in mobile gaming. Mobile gaming revenues from the King division and titles such as Call of Duty: Mobile, as well as ancillary revenue, represented more than half of Activision Blizzard’s … revenues in the first half of 2022. Mobile customers account for around three-quarters of its MAU. Microsoft currently has no meaningful presence in mobile gaming and the Transaction will bring much-needed expertise in mobile game development, marketing and advertising. Activision Blizzard will be able to contribute its learnings from developing and publishing mobile games to Xbox gaming studios.”
The company seems to be laying the groundwork here by committing to a set of principles that would allow developers to freely run their own app stores on its Xbox mobile platform. Also, offer their own payment systems to process in-app purchases. Epic Games, has allied itself with Microsoft in the past few years in the fight against Apple’s App Store policies. So having Fortnite and Call of Duty: Mobile on Microsoft’s Xbox mobile game store would be a good start in a difficult task to take on Apple and Google.
The CMA is investigating the $68.7 billion acquisition
The CMA is currently investigating the $68.7 billion acquisition and has asked Microsoft for context. In its filings, Microsoft says a big motivation for the purchase is to help build out its mobile gaming presence. Its plans for this space apparently include creating an Xbox mobile gaming platform and store. Here’s what the company says in the filings:
“The transaction will improve Microsoft’s ability to create a next-generation game store which operates across a range of devices, including mobile as a result of the addition of Activision Blizzard’s content. Building on Activision Blizzard’s existing communities of gamers, Xbox will seek to scale the Xbox Store to mobile, attracting gamers to a new Xbox Mobile Platform. Shifting consumers away from the Google Play Store and App Store on mobile devices will, however, require a major shift in consumer behavior. Microsoft hopes that by offering well-known and popular content, gamers will be more inclined to try something new.”
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