Microsoft recently wrapped up its $69 billion acquisition of gaming powerhouse Activision Blizzard. Spencer clarified that the move was driven partly by Activision’s robust standing in mobile gaming, boasting hits like Candy Crush and Call of Duty Mobile. Spencer argued that this strategic deal was essential to elevate Microsoft’s relatively modest position in the $90 billion mobile gaming market.
The deal took its sweet time, finally closing in October, almost two years after the big announcement. This delay put a dent in Microsoft’s plans to charge forward aggressively with its app-store agenda. And let’s face it, the business scene shifted gears since Microsoft first spilled the beans about the merger.
After a good run of solid growth, the mobile gaming scene hit a rough patch. In 2022, players loosened their purse strings 5% less than the previous year, as per research from Data.ai. And the word on the street is this trend is likely to stick around this year, too.
Microsoft’s mobile store would also step into a regulatory arena that is no walk in the park, especially concerning smartphone-based digital marketplaces. Epic Games, the mastermind behind Fortnite, threw punches at both Apple and Google with lawsuits over what it claims are unnecessarily restrictive and unfair practices in their iOS and Android stores.
Epic faced a setback in its dispute with Apple, but it brought the matter to the attention of the US Supreme Court. Epic is still entangled in legal proceedings with Google, which at least allows third-party app stores on its devices.
However, the European Union’s Digital Markets Act has the potential to compel Apple to open up its app store ecosystem, too, on which Apple is pushing back.
Microsoft could tap into the long-standing dissatisfaction with market leaders to garner support for its store offering. Xbox’s cloud gaming technology is already in the game, allowing users to stream blockbuster games straight to their mobile phones.
Spencer also said the company has “talked about choice, and today on your mobile phones, you don’t have a choice.” For Xbox to stay relevant not just today but for the next 10 to 20 years, it needs to establish a strong presence across “a variety of screens.”
