Feb 9, 2022 - Technology

Microsoft proclaims support for a more open gaming future

Microsoft CEO Satya Nadella and president Brad Smith sit on a stage in front of the Microsoft logo.

Photo: Jason Redmond / AFP via Getty Images

Microsoft executives are warming up regulators to their proposed acquisition of gaming giant Activision Blizzard in Washington by pledging a future that includes an open, "universal" app store.

Driving the news: On Wednesday, Microsoft announced a set of "Open App Store Principles" the company says will apply to the Microsoft Store on Windows and the next generation of its game marketplaces.

  • "We have developed these principles in part to address Microsoft’s growing role and responsibility as we start the process of seeking regulatory approval in capitals around the world for our acquisition of Activision Blizzard," Microsoft president Brad Smith wrote in a blog post.

Why it matters: The company is trying to sell its proposed $69 billion acquisition of Activision Blizzard by committing to principles of interoperability in app stores and across devices as lawmakers consider proposals that would change how app stores operate.

What they're saying: "The Activision Blizzard acquisition is what has brought us to Washington, D.C.," Smith told reporters in a briefing along with CEO Satya Nadella and Xbox corporate vice president Sarah Bond. "We're more focused on adapting to regulation than fighting against it."

  • "The game industry's structure, rules and business model was set on a paradigm when we used to buy [physical games]," said Bond. "That should change. It has put the device at the center of the experience. We think it should be the player at the center."
  • The Federal Trade Commission is reviewing the deal in the U.S. Smith said the deal will require approval from 17 regulators globally.

Details: Seven of those principles center around security, privacy, quality, safety, accountability, fairness and transparency, and the company says it is committing to those principles starting today.

  • The four remaining principles would change how developers use app stores by not requiring developers to use Microsoft's payment system, not giving its app store more favorable terms, not disadvantaging developers who use a different payment system and not preventing developers from communicating directly with customers.
  • The company said it would "commit to closing the gap on the remaining principles over time."

Between the lines: Over the last year, Microsoft has been increasingly vocal about expanding its gaming services to as many platforms and devices as possible.

  • But when it comes to platforms like Apple’s tightly sealed iOS, some may only open up through legislation.

The Open App Markets Act, recently approved by the Senate Judiciary committee, would cement many of these principles into law.

  • Smith said Microsoft wants to "be on the right side of history" by committing to such principles before and whether the bill becomes law.

Be smart: Microsoft didn’t actually announce a new app store, only the principles it would use to guide a hypothetical one.

Thought bubble from Axios Gaming's Stephen Totilo: Microsoft included a crucial caveat in today's briefing, acknowledging that all of these principles don't currently mesh with the existing Xbox game store, but would over time.

  • Microsoft justifies the current model, which grants Microsoft a 30% take of Xbox store revenue, as one based on consoles being sold at a loss (for what it's worth, Sony says it already profits from PS5 sales).
  • In a new store, developers would someday be able to choose to use Microsoft's payment system and other services, such as streaming tech, or not. "We're going to evolve the business model to support how much of the functionality we're providing them that they adopt," Bond said.

Editor's note: This story has been updated with further context.

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