Game developers dwell in the shadow of the giants. It almost sounds like a dramatic setting for a video game.
This week, we’ve seen more of that. Apple just agreed to end its monopoly on its iOS platform for payment services in the European Union. It will now allow payment companies to use the tech behind Apple pay to create rival payment services as part of a settlement with EU regulators.
The deal only applies in the European Union, which earlier this year allowed alternative app stores and web shops to open in competition with the stores of the “gatekeeper” companies such as Apple and Google. That was a result of the EU’s Digital Markets Act, and now another practice considered monopolistic is also coming to an end.
Until now, Apple refused to grant rivals access to the iPhone’s “near-field communications,” or NFC tech that enables people to tap the phone to a payment reader and quickly pay via Apple Pay. This “tap and go” tech adds convenience to rival payment services that could open up competition.
Much of this crusade against Apple’s monopoly was argued in court during the Epic Games vs. Apple antitrust trial. Epic only one a tiny part of that case — the right to advertise lower prices in alternative app stores — but the EU picked up much of its cause and has restricted Apple’s behavior in Europe. We’ll see if it leads to further worldwide antitrust actions.
For game developers, this is a good thing as we’re heading toward a more open world in the tech space. There is still a long way to go, as the giant platforms cast a long shadow when it comes to monopoly power. For the most part, game developers are still paying 30% of every dollar they make to platform hosts.
As we watch Apple’s rearguard effort to preserve its 30% take and its monopoly, we should also be wary of other moves.
This week, Microsoft said it would raise prices for its Xbox Game Pass subscription services for both Xbox and PC games starting in September.
This is one of the consequences of consolidation in the market, and Microsoft’s successful $68.7 billion acquisition of Activision Blizzard, which owned, among many other games, the Call of Duty franchise.
The price increase is like the other shoe dropping. In June, Microsoft showed us a dazzling array of games coming for the Xbox and Windows PC. And this is the other half of the news: You gotta pay for it.
Before the acquisition deal closed, the Federal Trade Commission sued Microsoft for antitrust violations, as it believed that Microsoft could take the multiplatform Call of Duty franchise and make it exclusive to Microsoft’s game platforms, leaving Sony, Steam, and Nintendo out in the cold. That would have been a harm for the consumers on those platforms, the FTC argued. The FTC lost, as antitrust law is really meant to protect consumers, not companies who are rivals.
Now Microsoft has introduced a byzantine range of prices for its subscriptions. The net result could very well be a bad price increase for consumers — the very thing that the FTC sought to avoid through its lawsuit.
Xbox Game Pass Ultimate subscribers will pay $20 a month on September 12, a $3 increase over the current $17 a month price. The $20 price includes “day-one” titles such as Call of Duty: Black Ops 6, which arrives this fall. Players who opt out of getting those “day-one” titles will pay a few dollars less.
For gamers, it’s an interesting calculation. If they’re going to play a lot of brand new games and big titles like Call of Duty, they may as well pay for the Xbox Game Pass Ultimate and get Call of Duty for a few bucks extra instead of the $60 or $70 prices they might pay for the standalone title.
Microsoft is drawing attention to its practices with its price increase and that could cast a shadow over the rest of the industry. Gamers have taken notice, and they’re pretty pissed that Microsoft would shoot itself in the foot again in this way. This move could also stir the FTC’s antitrust activism again, and so Microsoft should tread carefully. If I were Microsoft, I wouldn’t think about raising prices for gamers.
We don’t need more than one Apple to cast such a large shadow over games. [Update: 7/19/2024 at 10:31 a.m. Pacific: Yes, the FTC noticed and complained].