Microsoft and Google compete for the future of Xbox.

In October, the renewed conflict between Microsoft and Google came to light. After a six-year legal truce that ended in 2021, Google has begun to voice its concerns about Microsoft's cloud business. This disagreement is currently in the "lobbying regulators" stage; however, another conflict has reached the courts and the public sphere, potentially impacting the future of Xbox.

Last week, Microsoft reported that it had developed a new game store for Xbox on Android but has been unable to launch it. This store relies on a key court ruling that would require significant changes to the Google Play Store, allowing for greater competition and eliminating the obligation to use Google Play Billing for apps. Microsoft has been actively seeking regulatory intervention to facilitate its mobile Xbox strategy. However, after a brief moment of hope regarding the ruling, Google obtained a temporary administrative stay that prevents the implementation of these changes starting in November.

Microsoft's plan included the direct sale of games within its Xbox app for Android and the instant streaming of those games to phones and tablets. These two aspects cannot currently be carried out unless Microsoft agrees to forfeit 30% of the revenue from game purchases on Android to Google. "Due to a temporary administrative stay recently granted by the courts, we currently cannot launch these features as planned," said Sarah Bond, president of Xbox, in a post on Bluesky.

Google, on the other hand, responded differently, stating that "Microsoft has always been able to offer its Android users the option to play and purchase Xbox games directly from its app, but they have simply chosen not to do so." The reality between the statements of both companies lies in a middle ground. Microsoft used to allow game purchases in its mobile Xbox app on Android but removed that feature in 2020 when it added remote console streaming capabilities to the app. Google also imposes policies that would require Microsoft to give up 30% if it decided to enable game purchases in its Android app.

Google allows customers to purchase digital content using commerce systems other than Google in native apps, but only if the content is not consumed within the app. This explains why Sony and Valve can offer purchases in their Android apps, but with separate streaming apps for remote gaming.

Microsoft argues that Google's fees are "exorbitant," making it "uneconomical" for the company to offer Xbox games via streaming in the way it desires. Furthermore, Microsoft contends that the Google Play Billing system is not viable for Xbox game purchases, as they are designed to use their own payment platforms. They assert that adapting the code would take "years."

In this context, judicial uncertainty and any potential delays are critical to Microsoft's strategy of expanding Xbox beyond a growing console base. Microsoft recently launched its "This is an Xbox" marketing campaign to get people to associate phones, laptops, and other devices as part of the Xbox ecosystem.

The "Xbox everywhere" strategy includes a mobile Xbox store, which has been anticipated for years. The acquisition of Activision Blizzard for $68.7 billion would secure mobile games like Call of Duty and Candy Crush, which could attract consumers away from the Google Play Store and Apple's App Store.

Microsoft hoped that the EU's Digital Markets Act would facilitate the launch of this mobile store this year. However, this store has yet to be presented, and its promised web version for July has not materialized either, remaining in testing phase without a clear explanation for the delay.

The pressure on Microsoft is evident due to this situation and the difficulties with the new mobile Xbox store. Until mobile app stores are opened, the company will be forced to seek alternatives or intensify lobbying efforts with regulators to realize its vision for Xbox.