Adapt before regulation: A reasoned approach to app stores

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A person plays Sea of ​​Thieves on a Surface Go 3 via Xbox Cloud Gaming (beta)

Today, we’re announcing a new set of Open App Store principles that will apply to the Microsoft Store on Windows and the next-generation marketplaces we’ll be creating for games. We have developed these principles in part to respond to Microsoft’s growing role and responsibility as we begin the process of obtaining regulatory approval in capitals around the world for our acquisition of Activision Blizzard. This regulatory process begins as many governments also move forward with new laws to promote competition in app markets and beyond. We want regulators and the public to know that as a company, Microsoft is committed to adapting to these new laws, and with these principles, we are preparing to do so.

As we have said on other occasions, we recognize that the emerging new era of technology regulation carries both benefits and risks, not just for a single company, but for our entire industry. As others have pointed out, any new regulation comes with risks, and those deserve a fair hearing and careful consideration. But as a company, we continue to focus more on adapting to regulation than fighting it. Part of that is because we’ve been adjusting to antitrust rules for two decades and learning from our experience. Although change is not easy, we believe it is possible to adapt to the new rules and innovate successfully. And we believe it is possible for governments to enact new technology regulation that promotes competition while protecting core values ​​such as privacy and national security and cybersecurity.

The principles we embrace today will also ensure that we provide the best possible experience for creators and customers of all sizes. These principles are based on app store legislation being considered by governments around the world, including the United States, the European Union, the Republic of Korea, the Netherlands, and elsewhere. While no legislation is perfect, we believe it is possible to implement these new laws and continue to innovate responsibly and grow a healthy, profitable business.

Just as Windows has evolved into an open and widely used platform, we see the future of gaming following a similar path. Today, 2.8 billion consumers worldwide, including more than 190 million Americans, play games, and we expect the global number to reach 4.5 billion by 2030 as new generations turn to games for entertainment, community and a sense of accomplishment. Our vision is to enable gamers to play any game on any device anywhere, including streaming from the cloud. App stores on the most relevant and popular everyday devices like mobile phones; PCs, including Windows PCs; and, ultimately, the cloud, are important to realizing this vision.

But too much friction exists today between creators and players; The policies and practices of app stores on mobile devices limit what creators can offer and how players can play them and how players can play them. Our significant investment in the acquisition of Activision Blizzard further strengthens our resolve to remove this friction on behalf of creators and gamers. We want to make it easier for world-class content to reach all players across all platforms. We want to encourage more innovation and investment in content creation and fewer constraints on distribution. Simply put, the world needs open app markets, and that needs open app stores. The principles we are announcing today reflect our commitment to this goal.

Specifically, our Open App Store principles make commitments in four important areas:

Quality, safety, security and confidentiality

  1. We will allow all developers access to our app store as long as they follow reasonable and transparent quality and security standards.
  1. We will continue to protect consumers and gamers who use our app store, ensuring developers meet our security standards.
  1. We will continue to respect consumer privacy in our app stores, giving them controls to manage their data and how it is used.

Responsibility

  1. We will hold our own apps to the same standards that we hold for competing apps.
  1. We will not use any non-public information or data from our app store to compete with apps from developers.

Fairness and transparency

  1. We will treat apps equally in our app store without unreasonably favoring or ranking our apps or the apps of our business partners over others.
  1. We will be transparent about promotion and marketing policies in our app store and enforce them consistently and objectively.

Developer’s Choice

  1. We will not require our app store developers to use our payment system to process in-app payments.
  1. We will not require our app store developers to offer more favorable terms in our app store than in other app stores.
  1. We will not disadvantage developers if they choose to use a payment processing system other than our own or if they offer different terms and conditions in other app stores.
  1. We will not prevent developers from communicating directly with their customers through their apps for legitimate business purposes, such as pricing terms and product or service offerings.

We also recognize that emerging legislation will apply new rules to companies that both run an app store and control the underlying operating system like Windows. Therefore, we also commit today to:

  • We will continue to allow developers to choose whether they want to deliver their apps for Windows through our app store, from someone else’s store, or “separately” directly from the internet.
  • We will allow Windows users to use alternative app stores and third-party apps, including changing the default settings in the appropriate categories.

These new commitments build on a more limited set of principles for the Microsoft Store on Windows that we adopted in 2020. Since then, we have worked to uphold these principles, allowing other app stores to be distributed within the Microsoft Store on Windows and ensuring app makers can choose their own in-app payment systems. Likewise, we will build our next-gen game store based on these new principles, and we will be transparent in providing updates on how we apply them.

We also recognize that regulators may well have other important questions when considering our acquisition of Activision Blizzard. We’re committed to answering all potential questions, and we want to publicly address two of those questions right off the bat here.

First, some commenters asked if we would continue to bring popular content like Activision’s Call of Duty to competing platforms like Sony’s PlayStation. The obvious concern is that Microsoft might make this title available exclusively on the Xbox console, which would jeopardize the opportunities for Sony PlayStation users.

To be clear, Microsoft will continue to make Call of Duty and other popular Activision Blizzard titles available on PlayStation for the duration of any existing agreement with Activision. And we’ve made a commitment to Sony to also make them available on PlayStation beyond the existing agreement and into the future so Sony fans can continue to enjoy the games they love. We also want to take similar steps to support Nintendo’s successful platform. We believe this is the right thing for the industry, for the gamers, and for our business.

Second, some may wonder why today’s principles don’t immediately and broadly apply to today’s Xbox console store. It’s important to recognize that emerging legislation is being drafted to address app stores on the platforms that matter most to creators and consumers: computers, mobile phones and other general-purpose computing devices. . For millions of creators across a multitude of businesses, these platforms function as gateways to hundreds of millions of people every day. These platforms have become essential to our daily work and personal lives; creators cannot succeed without access to it. Emerging legislation is do not written for specialized computing devices, like game consoles, for good reason. Game consoles, in particular, are sold to gamers at a loss to establish a robust and viable ecosystem for game developers. Costs are recouped later through revenue generated in the dedicated console store.

Nevertheless, we recognize that we will have to adapt our business model even for the store on the Xbox console. Starting today, we’re going to apply Principles 1-7 to the Shop on the Xbox console. We are committed to closing the gap on the remaining principles over time. In doing so, we will incorporate the spirit of the new laws even beyond their reach, while moving forward in a way that protects the needs of competitive and healthy game developers, gamers, and game console ecosystems.

Ultimately, we believe this principles-based approach will foster a more open app market and better serve our users and creators. And, in turn, they will help us build a bigger and better gaming business.

We know that we will probably have to continue to adapt these types of principles as we move forward. We are dedicated to the constant change that a demanding world not only demands but deserves. In our view, this is all part of the future. And we embrace it.

Tags: app store principles, gaming, regulations

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