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The big picture: As UK regulators continue scrutinizing Microsoft's historic acquisition of Activision Blizzard, Microsoft revealed plans to build a mobile game store with Activision's franchises as flagships. Even with those iconic IPs, taking on Google and Apple is a herculean task.
As the UK's Competition and Markets Authority closely examines Microsoft's $68 billion deal to buy Activision Blizzard, plans for an Xbox mobile game store emerged in Microsoft's filings. The big-name intellectual properties Microsoft would gain from Activision Blizzard King (people tend to forget King, which specializes in mobile games) could be a lynchpin in the bold initiative.
Filings obtained by The Verge indicate that Microsoft wants to move customers away from the Google Play Store and Apple's App Store using a marketplace stretching across multiple devices, including mobile. The company knows the task won't be easy.
Microsoft has previously admitted that one of the main reasons it wants Activision Blizzard is its weakness in the mobile space. Microsoft doesn't have any hit games for mobile devices, while Activision has Call of Duty Mobile, Blizzard has Diablo Immortal (unpopular but profitable) and Hearthstone, and King has Candy Crush. Activision Blizzard reported making more from mobile earlier this year than console and PC gaming combined. However, a Microsoft mobile store would face institutional pushback.
Microsoft could technically start an app store on Android through sideloading apps, but Google fought Epic's attempts to do the same. Microsoft would face an uphill battle getting apps onto Android outside the Google Play Store.
Apple's iOS is even more difficult with its walled garden. Doing anything there is a non-starter for Microsoft unless policymakers take the drastic step of forcing Apple to open its mobile operating system to competitors. A new EU law might do just that, and regulators are already cracking down on Apple's and Google's in-app payment policies after Epic Game's legal war with Apple over the matter.
Microsoft might give game developers more freedom than the existing mobile giants allow. With its decades-long experience selling conventional PC and console games, Microsoft could bring an approach to selling mobile titles markedly different from Apple or Google. Then again, Microsoft's current PC game store still faces much criticism compared to Steam.