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Monday, September 20, 2021

Epic vs Apple judge dumbfounded over Apple’s xCloud policy

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Apple’s policy over cloud gaming and its decision not to permit services like xCloud on the App Store has come under close scrutiny during day 3 of the Epic Games trial.

Epic Games called Microsoft’s Lori Wright, VP of business development for gaming media, to talk about Microsoft, Xbox, marketplace commissions, and importantly, cloud gaming.

Wright spoke about how Microsoft does not view the iPhone or iPad as a competing device to Xbox, as well as explaining to the court concepts such as AAA titles. She also confirmed that Microsoft relies on third-party developers heavily for games and that Microsoft makes around $600-$700 million a year in commission from Epic Games, most likely thanks to Fortnite.

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Wright also testified at length about Microsoft’s xCloud gaming service, which lets users stream Xbox games over the internet to mobile devices. “We tried very hard to get it onto iOS but were not able”, said Wright, speaking to the court. Wright was referring to Microsoft’s plight in trying to make an iOS xCloud app which made headlines last year. Wright said Microsoft representatives spoke with Apple for three to four months, even traveling to Cupertino for meetings on the issue.

Wright says Apple was at first amenable to letting them use the Netflix model of creating a native app that lets users access a wide variety of content, but that it then changed its mind. A huge sticking point that led to the app’s demise, Apple told Microsoft it would instead have to submit each xCloud game available on the platform as an individual app.

Wright told the court that these App Store restrictions were “untenable” and would “fundamentally break down the type of service we’re trying to deliver”, stating that the solution offered by Apple was “really inelegant” and would leave users with lots of dead apps on their iPhone. Wright further stated that people don’t play games on the browser of their iPhone, but for Microsoft, it was the only way to reach mobile users on iOS.

“We were seeking to understand why that was the case, why there was a special carve-out for all other types of media and entertainment other than gaming”, said Wright,


Judge Yvonne Gonzalez Rogers stepped into proceedings, perplexed by this policy. “I can use Netflix with a native app and I can see lots of different movies or TV shows or whatever”, said Judge Rogers, before asking Wright if Microsoft didn’t want to use a subscription model.

Wright stated that Microsoft did want to use the Netflix model before stating “[Apple] allows Netflix to do what Netflix does, but it does not allow us to do what Netflix does.” Judge Rogers asked if Microsoft wanted to charge a subscription fee like Netflix, and Wright confirmed this.

Wright also highlighted how Microsoft had tried to negotiate with Apple in good faith, stating it had no objection to Apple’s 30% commission and that it was not seeking to negotiate revenue share percent, but that it simply wanted a way “to not have to rewrite all of these links and seek an aggregate way to pay the store commission.” Despite this counsel for Apple noted Microsoft was not subject to commission by going through Safari. Apple’s lawyers also asked Wright about its relationship with Epic Games, how much commission it generates from Epic, and whether Apple had tried to meet Microsoft in the middle. When asked if Apple’s team had accepted a wishlist of issues with xCloud on Safari, Wright agreed but stated “we would have needed none of that if we’d just built a native app for the App Store.”

Microsoft started testing xCloud on Safari for iOS last month.

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