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Xbox Chief Criticizes Apple's New App Store Policy

Xbox's Sarah Bond voices disapproval of Apple's latest pricing system for third-party app stores on iOS following recent regulatory changes.
Xbox Chief Criticizes Apple's New App Store Policy

Highlights

  • Xbox President Sarah Bond expresses disapproval of Apple's reaction to the Digital Markets Act, deeming it a step in the wrong direction.
  • The fees linked to Apple's new approach have sparked controversy, with Spotify's Daniel Ek describing it as 'extortion.'
  • The new regulations may present obstacles for Xbox's plans to establish its own mobile store and compete with Apple.

Several industry leaders, including Xbox Chief Sarah Bond, are openly criticizing Apple's handling of a recent tech regulation in Europe known as the Digital Markets Act (DMA). The DMA mandates that platforms like Apple provide third-party app stores, a move that initially appeared favorable. However, Xbox, Spotify, and Epic Games have raised objections to the charges associated with this new model.

Apple has long been under scrutiny for its app pricing structure on the widely-used iOS platform. Notably, Epic Games has been embroiled in a protracted legal battle with Apple over the 30% commission on Fortnite microtransactions on iOS. With the DMA in place, Fortnite is set to return to iOS devices in 2024, but this reinstatement is exclusive to European Union countries.

Xbox Chief Sarah Bond's Disapproval of Apple

Sarah Bond, the new Xbox Chief, has publicly voiced her disapproval of Apple's response to the DMA on social media, referencing a comprehensive thread from Spotify's Daniel Ek. Bond has labeled this move as a 'step in the wrong direction,' while Ek has gone as far as to characterize it as 'extortion.' Despite Apple's compliance with the DMA, Ek argues that the fees associated with the new model may be even more detrimental than the existing structure. The primary concern revolves around the 0.50 Euro cent fee for each app download beyond the millionth installation. For popular apps, this could translate into fees amounting to tens or hundreds of millions of Euros perpetually. These fees are in addition to the existing 17% commission that iOS imposes on digital goods bought through the platform (or 10% for recurring payments).

In essence, Ek contends that Apple is presenting a false choice between this potentially much worse new program and the 'status quo.' Bond's involvement in this discourse is noteworthy, particularly as Xbox aims to establish its own mobile store to compete with Apple and Google. With Apple firmly controlling the lion's share of the mobile market through the iPhone, these new regulations could pose challenges for Xbox's aspirations.

Companies have encountered less success in legal battles with Apple in the US compared to Europe. Just last year, the Ninth US Circuit Court ruled in favor of Apple in the ongoing Fortnite lawsuit.

Xbox seems poised for an eventful year following Microsoft's acquisition of Activision Blizzard last autumn. However, the year began on a somber note as Microsoft initiated widespread layoffs within its gaming division, resulting in 1,900 job losses. This perpetuates a disheartening trend of layoffs that has plagued the gaming industry in recent months.

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