xCloud vs iOS – Is the industry right to view Apple as the bad guy?

The last few days have seen a lot of news stories appear concerning Apple’s role in the games industry. Most notably its refusal to allow Microsoft’s xCloud streaming app onto Apple devices. Additionally, Facebook Gaming finally appeared on iOS, but only once it had been stripped of its gaming functionality, leaving it more as a single interest social app.

That has led to Apple being portrayed as the big bad, the mean gatekeeper which is holding the industry (or in this case a couple of other huge companies) to ransom. That view that comes on top of the current antitrust investigations against Apple and its supposed abuses of its market position.

Now, of course, Apple itself is a huge component of the games industry, with iOS being arguably the biggest gaming platform in the world, generating untold riches for the top mobile games on it through microtransactions.

In addition, and possibly more importantly, Apple is now attempting to establish a new revenue stream from gaming via Apple Arcade subscriptions, one that isn’t driven by microtransactions – which are increasingly under scrutiny by legislators.

xCloud is a clear competitor for Apple Arcade. In fact with Stadia having had a slow start in the market, xCloud would be the only potential, realistic competitor in the subscription space for playing premium games on iOS.

At present xCloud is largely targeted at current Xbox owners and Game Pass subscribers but that’s just to get the ball rolling, eventually Microsoft must be targeting the true mass market – those without consoles – which is the real jackpot for such technologies.

So while xCloud may not contain in-app purchases, it’s a major competitor to Apple. But how then does it differ from Netflix in that regard?

Netflix too is an Apple competitor, this time against Apple TV+. However, the platform came to Apple when relatively small and by allowing sign-ups through its app was once paying Apple a cut amounting to hundreds of millions of dollars every year. Netflix doesn’t allow in-app sign-ups any more, so that amount is now constantly diminishing.

“Apple stands alone as the only generally purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass. And it consistently treats gaming apps differently, applying more lenient rules to non gaming apps even when they include interactive content,” Microsoft said in a statement to IGN.

Microsoft of course is hoping to get xCloud onto Apple devices without paying Apple for the privilege. And this looks likely to be the beginning of either a lengthy stalemate, or long and tortuous negotiations behold the scenes.

“We are committed to finding a parth to bring cloud gaming with Xbox Game Pass Ultimate to the iOS platform, We believe that the customer should be the heart of the gaming experience and gamers tell us they want to play, connect and share anywhere, no matter where they are. We agree,” continued Microsoft.

Of course, console platforms, including Microsoft to some degree, are themselves walled gardens, having charged others handsomely for the privilege of putting content in their ecosystems, much as Apple does. Microsoft would argue that Apple’s rules are being applied evenly, and it’s certainly got a point here.

Arguing about whether any of this is ‘fair’ or not is playground stuff, the key question is how much does it affect the broader industry and when things might change?

In the long-run it’s the sheer size and profitability of Apple that will decide if it can maintain such a posture. It seems likely to us that either legislators or direct consumer pressure will eventually push Apple to open up to some degree. It could be many years before we see any such movement but eventually it seems likely that Apple will have to mellow its approach.

Turning it around, it would be interesting to see Apple Arcade appear on other devices, even the Xbox, though as the service looks targeted largely to maintain Apple hardware sales, that seems highly unlikely.

As to impact on the broader industry, the lack of xCloud (os similar services) on iOS isn’t a big deal for the immediate future. It’s more Microsoft’s long-term problem than any one publishers or developers concern for now. It does show though just how healthy and dynamic our industry remains, it’s when the big boys stop fighting over what games can be played where that you really need to worry.

About Seth Barton

Seth Barton is the editor of MCV – which covers every aspect of the industry: development, publishing, marketing and much more. Before that Seth toiled in games retail at Electronics Boutique, studied film at university, published console and PC games for the BBC, and spent many years working in tech journalism. Living in South East London, he divides his little free time between board games, video games, beer and family. You can find him tweeting @sethbarton1.

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