Microsoft’s partnership with Activision Blizzard is key to the company’s mobile gaming ambitions. The company is building a mobile Xbox store and will rely on Activision and King games, thanks to this recent agreement.
Xbox mobile store
The Xbox mobile store is a new game marketplace from Microsoft that will allow you to download games directly to your phone or tablet. The software company first hinted at the store earlier this year, but has now revealed specific details of it in filings with the UK’s Competition and Markets Authority (CMA).
Numerous companies, including Activision, are interested in the acquisition. with $68.7 billion, The CMA is currently looking into it and has asked Microsoft for more context. Microsoft is using this opportunity to create an Xbox mobile gaming platform and marketplace.
This is detailed in its filings:
Through a recent acquisition, Microsoft will add Activision’s portfolio of games to its Xbox One service. They’ll also be introducing the ability to purchase games to mobile devices. Building off of Activision Blizzard’s already robust communities, Microsoft plans to introduce Xbox as a service on mobile devices.
By capturing existing gamers on these devices, they plan to compete with the Google Play Store and App Store for mobile gaming dominance. This is an ambitious goal that relies heavily on encouraging change among consumers’ purchasing behaviours.
Microsoft’s acknowledgment of mobile gaming is the latest sign of their intent to push Xbox Cloud Gaming on handheld devices. Microsoft has already been working with companies like Valve and Logitech, who focus heavily on cloud gaming. This means that a mobile gaming push could happen in more than one place.
Microsoft could leverage Activision’s Candy Crush Saga and King’s Mobile to help build a game store that rivals Google Play and the App Store. Apple has policies in place that block third-party app stores on iPhones, so it seems unlikely that Microsoft would compete with Apple anytime soon. But clearly, they’re envisioning an Xbox mobile app store.
Microsoft’s new console shows that the company is committed to gaming. Not only does it have some impressive hardware, but games are also a large market, with popular downloads on mobile and in-app purchases on app stores. Even if this doesn’t come at the cost of hardware profit margins, Microsoft clearly wants in on the market.
The acquisition of King doubles the size of Microsoft’s gaming portfolio, giving them dominance in mobile gaming. The company’s revenues in the first half of 2022 came primarily from the King division, where they own some of the most successful mobile franchises, and Call of Duty: Mobile. This acquisition will bring a knowledge base to Xbox studios that had been previously lacking: developing and publishing mobile games.
However, even though mobile gaming is worth more than console gaming, the biggest gaming company in the world, Microsoft, will likely be investigated by the CMA for its entrance into the market. The company uses graphs from its own website to illustrate that consoles make up just 20% of the $165 billion gaming market in 2020. PC games are at 24%, and mobile games account for 51%.
Microsoft will need to win the support of third-party developers if its new service expects to make any headway.
Microsoft has laid the groundwork for a broad commitment to principles that will allow developers to run their own app stores, offer their own payment systems, and supply content that competes with Xbox. Because of this, you gain a competitive advantage against Apple.
Microsoft’s past success with attracting developers to their platform will help the Xbox mobile store succeed. One company that might be interested is Epic Games, which recently allied with Microsoft in the fight against Apple’s App Store policies.