Microsoft to Judge: Apple’s Rules Blocked Our Gaming Service Too

Malathi Nayak, Bloomberg News

The Apple logo on a store in San Francisco, California, U.S., on Monday, April 26, 2021. Apple Inc. is increasing its U.S. investments by 20% over the next five years, allocating $430 billion to develop next-generation silicon and spur 5G wireless innovation across nine U.S. states, after outstripping its growth expectations during the pandemic. Photographer: David Paul Morris/Bloomberg , Bloomberg

(Bloomberg) -- Even for Microsoft Corp., one of the world’s most prominent technology companies, Apple Inc.’s App Store proved impenetrable.

That was the upshot of testimony Wednesday at Apple’s antitrust trial from Lori Wright, Microsoft’s gaming, media and entertainment vice president, who recounted how her company couldn’t sway the iPhone maker to let Xbox roll out its cloud gaming service through the App Store and tap into iOS users.

Epic Games Inc. is counting on Wright to support claims in its lawsuit that Apple thwarts competition by keeping a tight grip over App Store operations with onerous rules and policies that are unfair to developers and consumers.

Microsoft wanted its XCloud gaming service to be a one-stop shop for mobile games, and was puzzled why Apple wouldn’t give the company a “special carve-out” like Netflix Inc. and other entertainment businesses had that allows them to offer a catalog of content within their apps, Wright said.

Wright said Apple’s condition for approving the XCloud app would have had users download each game individually, a cumbersome option. “Why couldn’t we have a single app with many games?” she asked on the witness stand.

The trial before a federal judge in Oakland, California, comes as Apple faces a backlash -- with billions of dollars in revenue on the line -- from global regulators and some app developers who say its standard App Store fee of 30% and others policies are unjust and self-serving.

The fight with Epic blew up in August when the game maker told customers it would begin offering a discounted direct purchase plan for items in its blockbuster Fortnite game, and Apple then removed the game app, cutting off access for more than a billion customers. Apple, which vehemently denies abusing its market power, has called Epic’s legal gambit a “fundamental assault” on a business model that is beneficial to both developers and consumers.

Locked out of the App Store, Microsoft this year began testing a work-around: a web version of its XCloud service that can be accessed through a browser on iPhones and iPads.

Epic’s lawyer asked Wright whether this browser-based platform was a “good outcome or a bad outcome.”

“It was our only outcome in order to reach mobile users on iOS,” she said, but not the solution Microsoft preferred.

Wright’s account follows testimony Tuesday by an executive of Nvidia Corp. that Apple didn’t approve an iOS app version of its game streaming service.

According to Apple, Microsoft earns $600 million to $700 million a year from its relationship with Epic and is defending the game maker because it’s good for their business. Microsoft supported Epic early in its court fight with Apple.

Apple also said that Microsoft’s rules for its digital store are similar to those for the App Store.