Microsoft is Stuck Between Hardware and Services

Apple confirms cloud gaming services like xCloud and Stadia violate App Store guidelines by Nick Statt for The Verge

Apple rejected Microsoft’s Xbox xCloud streaming app from the App Store. Apple’s statement to Business Insider:

Our customers enjoy great apps and games from millions of developers, and gaming services can absolutely launch on the App Store as long as they follow the same set of guidelines applicable to all developers, including submitting games individually for review, and appearing in charts and search. In addition to the App Store, developers can choose to reach all iPhone and iPad users over the web through Safari and other browsers on the App Store.

This won’t last long. The bad press with the backdrop of the antitrust hearings will lead to a change in opinion rather quickly I’d imagine. This is like the Hey email app snafu back in June. Apple has a history of this and the current response is not surprising, in fact, you could have bet on it. Apple wants their cut and they certainly won’t get as much as they probably want when the dust settles. Running to the press will likely come to the rescue once again.

But Microsoft is not some gaming-friendly consumer knight-in-shining-armor here either. Their response raises questions too.

Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass…We believe that the customer should be at the heart of the gaming experience and gamers tell us they want to play, connect and share anywhere, no matter where they are.

I first realized this double standard while listening to the August 7, 2020 episode of Dithering. John Gruber makes an excellent point about Microsoft/Xbox only wanting to provide this cloud gaming service on their platforms if it is the one they own – xCloud. Where is the Stadia or Steam Link or even PlayStation Now app for Xbox? Would Microsoft even allow that if Google or Sony approached them? I highly doubt it. Sure, Stadia and Steam run on PC, but Microsoft owns the operating system there, not necessarily the hardware and not every person that plays games owns a PC capable of running games.

Game consoles are also general purpose platforms these days. They stream movies, music, have a web browser, and plenty of their own apps. Microsoft’s original pitch for the Xbox One was to be the all-in-one box for the living room: Essentially a PC for the TV. That didn’t pan out like they had originally envisioned, which has led to the company doing a complete 180 on their marketing and focus.

If customers should really be at the heart of the gaming experience and should be able play where they want then Microsoft should not solely focus on getting their service and content on every screen. If my games library is in Steam, why can’t I stream that content to my Xbox plugged into my television? Microsoft is trying to expand its own walled garden into Apple’s and other device providers. Phil described walled gardens as a construct of the 90s, but yet, here is Xbox building their own garden of exclusive content under the joint umbrella of Game Pass Ultimate and xCloud.

It’s not unlike Apple Arcade. A subscription service that provides access to a library of games that a user may download and play s long as they are a subscriber and the game is in the catalog that changes regularly. Microsoft is the pot and Apple is the kettle.

Microsoft is transitioning the Xbox brand from a box under your TV to a game developer/publisher and a services provider. It’d be like if Netflix made both the service that provides thousands of films and shows, but also made a television that only worked with Netflix, no Hulu, HBO Max, etc. I don’t think Microsoft can have it both ways. They need to open their own platform to the competition and complete their transition to a services provider.

“You and I might watch Netflix. I don’t know where you watch it, where I watch it, but we can have conversations about the shows we watch. I want gaming to evolve to that same level.” – Phil Spencer in an interview with Wired

Phil wants that conversation for xCloud, not video games as a whole. I don’t see the Xbox console making it to another traditional generation. Now, their service and game development will go on for years to come and a big part of that hinges on being on as many screens as possible.