Microsoft hits out at Apple with its new Windows app store policies, admits more work to do to establish the right set of principles for game consoles

[Hamster Plugin]

I mean ok but no one uses the Windows Store.

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Game pass has made it more relevant and I see quite many on Era and r/pcgaming using it now.

...which I'm not very happy about because the store still has the very restrictive folder locks preventing you from accessing files on your own computer. This is how modding dies - with thunderous applause. I'm part of the problem with my 2 years of Gold converted GP, but there is zero chance of me getting any more after it ends. This terrible store along with the Xbox app will get nuked from my PC when it's over.

 

[alstrike]

I knew it was Tom Warren before clicking the link...

 

[nekkid]

It was inexpensive for them to say this, but considering the argument they're in about xCloud they kinda had to, right?

 

[Raistlin Majere]

What a pathetic, and empty, PR stunt.

First of all, Windows has always been an open platform where you can distribute applications same outside of an official appstore. Same as MacOS, which is what the relevant competitor and comparison is. iOS has always been a closed platform, so this kind of superficial comparison does not apply. Windows 10 mobile was also a closed OS, it just crashed and burned. All those "principles" they just listed seem to apply to macOS just fine as well.

Also, the vast majority of apps are not distributed through the Windows Store, which is kind of a failed product. It's never been a meaningful source of revenue for them, so maintaining the status quo isn't some big sacrifice. The vast majority of app downloads from Windows are made from outside the store. And what are these "reasonable fees"? Interesting how they don't commit to anything specific. And notice how of course this doesn't apply to Xbox, because that store IS a significant revenue stream, and they need to protect that. So they're perfectly fine with having the same fees as the appstore and stringent rules there and not allowing alternate stores.

People will cheerlead Microsoft's statement, because Apple something something, but it's just PR, and contains almost no actionable aspects. It's an intellectually dishonest campaign to compare Windows to iOS, when macOS exists and is the relevant comparison.

 

[BAD]

They specifically addressed that in their statement.

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Not meaningfully. They just say that's different because they hide the true costs to be a loss leader and pass it on to devs in that industry so Xbox can have more unit sales. Not a super compelling case for why this is fair for consumers and developers in one case and not the other - Xbox and PS are almost entirely PCs and could run whatever store or OS consumers wanted if they weren't locked from programming them there. Why is one allowed to be a walled garden to make a bigger margin and another isn't? Apple's R&D costs are some of the highest in tech - they spend far more than Xbox.

This is a PR stunt that has low risk for their relatively unpopular store on PC, that Mac already treats similarly. Microsoft has no foothold comparable to Apple, so this was easy for them to say.

 

[gifyku]

Here you go Apple defendants. But sure, Epic Xbox yada yada....

Apple made ProtonMail add in-app purchases, even though it had been free for years

Apple strongarmed another independent email app

www.theverge.com

 

[Temperance]

Wow very brave to commit to not locking down an ecosystem that was never locked down, and to say their store that nobody uses and everyone hates will be soon charging reasonable fees (whatever that means).

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I've seen the microsoft store movie prices on sale being better then other store fronts. Likely that they might not charge that 30% in some cases. Otherwise studios wouldn't price them comparatively low.

But yeah hard to buy from a store where content playback isn't as easy to do.

 

[formasymphonic]

Borderline meaningless when they are excluding the Xbox imo.

The Windows App Store isn't particularly relevant.

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Its fundamentally this. In the example they give for Windows macOS would be the relevant equivalent and a user can get apps from a multitude of stores or install from no store at all. As for consoles, its effectively the same argument Apple makes for iOS as general purpose computing vs appliance computing. That is a whole separate discussion on itself (and I'm sure people have a variety of opinions on it), but its the same argument.

Spoiler

IMO, rather than all the Fortnite theatrics, Epic should have banded together with other developers to make a case for where iPhones and iPads are on the "general purpose computing vs appliance computing" spectrum and gone directly to Apple that way and sued if that hadn't of worked.

 

[evrythngwastakn]

MS just flexing it didn't get called in to get ripped on by the feds.

 

[Trup1aya]

Not meaningfully. They just say that's different because they hide the true costs to be a loss leader and pass it on to devs in that industry so Xbox can have more unit sales. Not a super compelling case for why this is fair for consumers and developers in one case and not the other - Xbox and PS are almost entirely PCs and could run whatever store or OS consumers wanted if they weren't locked from programming them there. Why is one allowed to be a walled garden to make a bigger margin and another isn't? Apple's R&D costs are some of the highest in tech - they spend far more than Xbox.

This is a PR stunt that has low risk for their relatively unpopular store on PC, that Mac already treats similarly. Microsoft has no foothold comparable to Apple, so this was easy for them to say.

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It's been said before in this thread, but the value of the console to consumers is that it's a device specialized for gaming. The benefit to consumers is The price of the hardware is lower than the cost to assemble it separately and Gaming developers have a singular target with audience to optimize their software to.

Console makers could allow developers to circumvent the store and the royalties, but then there's no financial incentive to make the console in the first place as it would be literally impossible to turn a profit. And when that incentive goes, so does the consumers option for a device that is specifically targeted by developers for optimization.

The difference between consoles and phone OS and the business cases are night and day.

Phones are general purpose PCs and consumers buys the hardware at or above cost because they are insanely flexible. They are ubiquitous features in our daily lives. The software isn't subsidizing the hardware costs - it's icing on the cake.

 

[wafflebrain]

I feel like the posters here saying Windows Store is irrelevant don't understand all the Game Pass downloads go through there...next time you download something on the Xbox app on PC open up the store and go to downloads, you can see they're being funneled through there even if its in the background.

I'm not a fan of how they lock game folders behind the service which makes modding impossible, but to say their store has no relevance to their business is just ignorant. GP on PC is obviously a huge part of their business strategy wrt Xbox now.

 

[PyroPaperPlanes]

Not meaningfully. They just say that's different because they hide the true costs to be a loss leader and pass it on to devs in that industry so Xbox can have more unit sales. Not a super compelling case for why this is fair for consumers and developers in one case and not the other - Xbox and PS are almost entirely PCs and could run whatever store or OS consumers wanted if they weren't locked from programming them there. Why is one allowed to be a walled garden to make a bigger margin and another isn't? Apple's R&D costs are some of the highest in tech - they spend far more than Xbox.

This is a PR stunt that has low risk for their relatively unpopular store on PC, that Mac already treats similarly. Microsoft has no foothold comparable to Apple, so this was easy for them to say.

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To me, the key difference between the two examples is that mobile phones are essential devices. I need my phone for my job. Everybody practically has either an Apple or Google phone, and it could be argued that the App/Play Store has an oligipoly.

While I agree that the same can be said with consoles, those aren't essential devices that everyone owns. PC is also still a viable option too, where multiple marketplaces exist. The same option doesn't exist for phones. The one argument against my defense is yes, Android offers the option to sideload apps. However, this makes it far more difficult to sell your app to consumers and isn't a practical option for all intents and purposes.

 

[Diarrhea Day-Lewis]

Sure but that would require a different type of license. Even if the decision is affirmed on appeal, the law would most like only apply to future purchases. Also, expect your games to cost even more.

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Maybe they would cost more but I doubt they can make that argument when it makes used physical game prices? I mean they can't exactly say they have to raise digital games $5 because users get the ability to resell when used physical games exist and they don't raise prices explicitly for that.

It really would cost just the overhead to make a system like that work, but then they'd probably make money once that system is in place if they take a % of each resell so I don't think they have a leg to stand on in terms of raising game prices because of this alone

 

[WhiteRabbitEXE]

I wish they would let us sell our digital games from Windows Store and Xbox Store to other users. That would be a step in the right direction. Same applies to all closed ecosystems, Windows, Mac, Android, Nintendo, Xbox, PS, etc

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I just don't understand how the could possibly work. There's no such thing as a "used" digital copy, there's no finite number of digital copies, and de-listings aside they don't really "go out of print", there's no physical good. So why would anyone ever buy a "new" copy outside of day one purchases? I mean sure, I'd go for it if the option was available, but I can't see any possible argument in favor of it that makes sense for someone to do it?

 

[Kill3r7]

Maybe they would cost more but I doubt they can make that argument when it makes used physical game prices? I mean they can't exactly say they have to raise digital games $5 because users get the ability to resell when used physical games exist and they don't raise prices explicitly for that.

It really would cost just the overhead to make a system like that work, but then they'd probably make money once that system is in place if they take a % of each resell so I don't think they have a leg to stand on in terms of raising game prices because of this alone

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Steam doesn't care that there are physical stores. They are a digital store only. Publishers would want to sign a different licensing agreement that allows them to get a piece of the resale and/or get compensated upfront for providing such a license.

 

[karnage10]

I just don't understand how the could possibly work. There's no such thing as a "used" digital copy, there's no finite number of digital copies, and de-listings aside they don't really "go out of print", there's no physical good. So why would anyone ever buy a "new" copy outside of day one purchases? I mean sure, I'd go for it if the option was available, but I can't see any possible argument in favor of it that makes sense for someone to do it?

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Personally i see 2 ways for it to work:

• You can only sell the game to the store - efectively destroying a copy
• Yo ucan sell to other players but the dev gets a cut

That said i'll never understand why digital stuff has less rights than physical just because it isn't perishable. personally I wish courts stepped in and made these digital licenses owned by the costumer.
It makes 0 sense that if I buy a physical game X for 60€ i have more rights than if I buy digital game X for 60€. The worst part is that digital games are more profitable for the company.

So with due respect fuck these companies for being greedy.

 

[Iucidium]

Letting users sell their games sounds like a disaster waiting to happen, imagine if your account got hacked and all your games were sold to another user for pennies

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2
F
A

 

[docannon]

Having used digital games for sale would be a quick way to get rid of the problem of huge backlogs, so there is a silver lining...

I understand wanting to pay less for a hobby you enjoy, but gaming is already pretty cheap when looking at value you get (measured in time, joy w/e) vs the amount of effort it takes (man-hours, cost etc). At some point, paying less directly means that the developers get less. Blue ocean strategies have limits, and so does the expectation of these big companies treating the developers more fairly.

 

[Puroresu_kid]

Here you go Apple defendants. But sure, Epic Xbox yada yada....

Apple made ProtonMail add in-app purchases, even though it had been free for years

Apple strongarmed another independent email app

www.theverge.com

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Kill shot

 

[Ambient]

This is meaningless as long as they keep it as is on Xbox.

 

[Diarrhea Day-Lewis]

just don't understand how the could possibly work. There's no such thing as a "used" digital copy,

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Publishers would want to sign a different licensing agreement that allows them to get a piece of the resale and/or get compensated upfront for proving such a license.

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I get that there would be a lot of unknowns here. But it's the responsibility of the platform maker to figure them out. They certainly have the time and money to do so. They can probably figure out how to make it a hyper profitable business for themselves too.

just because the framework doesn't exist today doesn't mean it shouldn't be done and that things can't be much better with it.

hell i would think this would a dream come true for publishers because they could use it as a means to migrate to all digital, but offering digital game reselling as a feature that is pro-consumer while they get a % of the resell transaction, like 5%.

you play and beat the new COD you downloaded for $60, sell it to a friend or someone on a platform curated marketplace for $40, platform maker takes 10% ($4) and splits it with dev. Seems like a win win for everyone

 

[Bessy67]

Glad I got a preorder. Consoles are about to be $1000+ if the 30% cut goes away.

 

[Jon God]

MS should do the consumer friendly thing, and allow for DRM free games that can be backed up on your USB thumb drives. (For consoles, obviously)

 

[Kill3r7]

I get that there would be a lot of unknowns here. But it's the responsibility of the platform maker to figure them out. They certainly have the time and money to do so. They can probably figure out how to make it a hyper profitable business for themselves too.

just because the framework doesn't exist today doesn't mean it shouldn't be done and that things can't be much better with it.

hell i would think this would a dream come true for publishers because they could use it as a means to migrate to all digital, but offering digital game reselling as a feature that is pro-consumer while they get a % of the resell transaction, like 5%.

you play and beat the new COD you downloaded for $60, sell it to a friend or someone on a platform curated marketplace for $40, platform maker takes 10% ($4) and splits it with dev. Seems like a win win for everyone

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How do you make something hyper profitable when a user is paying another user rather than you and the publisher? There is a reason why revenue and profits this gen skyrocketed with the increase in digital. I agree with you that we should be afforded the same legal rights whether buying a digital or physical game.

 

[Twister]

"We are doing what we already did before but making a big fuss about it without actually changing anything just to look better than a company that actually looks out for its user's safety."
Get out of here Microsoft.

 

[Fabtacular]

I just don't understand how the could possibly work. There's no such thing as a "used" digital copy, there's no finite number of digital copies, and de-listings aside they don't really "go out of print", there's no physical good. So why would anyone ever buy a "new" copy outside of day one purchases? I mean sure, I'd go for it if the option was available, but I can't see any possible argument in favor of it that makes sense for someone to do it?

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Do not engage with these people. They will never understand.

 

[Diarrhea Day-Lewis]

How do you make something hyper profitable when a user is paying another user rather than you and the publisher? There is a reason why revenue and profits this gen skyrocketed with the increase in digital. I agree with you that we should be afforded the same legal rights whether buying a digital or physical game.

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Because that might be a lost sale for the pub anyway, the user may not want to buy it at $60 but $40-$50 maybe would. Sure they can wait on a sale but may not be interested then. If the pub gets a cut from the second hand sale that's at least something.

it looks like it will happen if the EU's ruling is anything to go by so platform makers need to figure it out regardless imo.

 

[Kill3r7]

Because that might be a lost sale for the pub anyway, the user may not want to buy it at $60 but $40-$50 maybe would. Sure they can wait on a sale but may not be interested then. If the pub gets a cut from the second hand sale that's at least something.

it looks like it will happen if the EU's ruling is anything to go by so platform makers need to figure it out regardless imo.

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But Steam has a ton of sales. I don't game on PC but even I have built a backlog of steam and GOG games because of how cheap these games are.

 

[Kaloskatoa]

Personally i see 2 ways for it to work:

• You can only sell the game to the store - efectively destroying a copy
• Yo ucan sell to other players but the dev gets a cut

That said i'll never understand why digital stuff has less rights than physical just because it isn't perishable. personally I wish courts stepped in and made these digital licenses owned by the costumer.
It makes 0 sense that if I buy a physical game X for 60€ i have more rights than if I buy digital game X for 60€. The worst part is that digital games are more profitable for the company.

So with due respect fuck these companies for being greedy.

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I do understand and mostly agree with that notion, however, I would say there needs to be some kind of limitation because, as others have put before me, unlike physical copies, digital copies all have the same value.

Some things I think might, or might not work:

1.Online passes and exclusive content/dlc to new copies. If you buy an used copy you wont get everything out of the package.
2. The buyer downloads the game directly from the seller, only going through the store servers for authentication. This incovenince would make it so a used copy doesnt have as much value as a new one, since you depend on another person's connection speed and data caps.

 

[Diarrhea Day-Lewis]

Do not engage with these people. They will never understand.

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I don't mean to come across rude or upset anyone. Knowing my luck, I'm probably terribly wrong in how this could work or it may never actually happen lol. I will refrain from posting more about it, didn't mean to upset anyone. My apologies.

 

[zashga]

The software maker also addresses the fact that it continues to charge developers 30 percent fees on its own Xbox store for in-game purchases. "It's reasonable to ask why we are not also applying these principles to that Xbox store today," says Alaily. "Game consoles are specialized devices optimized for a particular use. Though well-loved by their fans, they are vastly outnumbered in the marketplace by PCs and phones. And the business model for game consoles is very different to the ecosystem around PCs or phones."

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This is a wholly arbitrary distinction. An Xbox is just a mid-spec PC that only runs software whitelisted by Microsoft. The only reason it's not a "general use" device is that Microsoft imposes restrictions on it.

The same is true for PS and Switch, except Switch is more like a tablet than a PC.

 

[MrBob]

Wonder if Xbox still eventually adopt the Steam model in terms of percentage take. Don't expect Xbox to give away free keys to third party stores like steam.

Game pass has made it more relevant and I see quite many on Era and r/pcgaming using it now.

...which I'm not very happy about because the store still has the very restrictive folder locks preventing you from accessing files on your own computer. This is how modding dies - with thunderous applause. I'm part of the problem with my 2 years of Gold converted GP, but there is zero chance of me getting any more after it ends. This terrible store along with the Xbox app will get nuked from my PC when it's over.

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Steam is still growing at a fast rate. Wouldn't worry about this unless Steam goes away.

I think eventually ms is going to fix their hidden file issue. At least they better.

 

[Fabtacular]

I don't mean to come across rude or upset anyone. Knowing my luck, I'm probably terribly wrong in how this could work or it may never actually happen lol. I will refrain from posting more about it, didn't mean to upset anyone. My apologies.

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LOL.

Here are my prior thoughts on this: https://www.resetera.com/threads/fo...ccordingly-to-make-sense.296720/post-46984676

 

[LuckyLocke]

Regarding Xbox Store...

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It is different though, its explained in the OP. You wouldn't be able to buy a XSX or PS5 for 500$ if it wasn't for that 30% fee. They sell the boxes at a loss for a hope to profit off software. Apple sells their iPhones with gigantic profit margins and then gets more from you with their 30% app store fees.

 

[playXray]

If you want to sell software licenses you've already used and paid for, I guess I'd say stop buying software licenses that explicitly forbid that (eg Xbox software).

There are a great many general purpose apps for game consoles. Aren't game consoles one of the most popular platforms for Netflix? Plus web browsers, weather apps, email clients and many other apps that make them clearly general purpose computing devices. The distinction you are making us primarily a branding one. These are all just discrete computing devices with processors, ram etc.

I don't understand what you mean by "makes sense".

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What I mean is, I can see why people would like to have some sort of resell value for their digital games. You buy it on disc, you can sell it. I'm not saying you should be able to sell a digital copy, I'm just saying that in principle it seems like a reasonable concept for consumers.

Personally, I'm all digital and happy with it.

That license is attached to your account. They would have to release it. They legally don't have to. On the other hand they generally cannot block you from reselling a physical disc. They can add one time keys to prevent that from happening but thankfully that never took off.

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This idea defies the laws of supply and demand.

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I know this, and it's a good point, but I'm not actually saying they should do this. My initial point was in response to the first post where the idea that you don't "own" the game when you buy it was somehow exclusive to digital copies. My point was that this still applies to physical copies too.

 

[Alexandros]

The underlying hardware is irrelevant when it comes to the general use case and the market value. So is your personal use case.

My refrigerator has a browser, wifi connection, an apu, and runs android. But it's not a general purpose computer- it keeps food cold. Its market value is derived from its ability to keep food cold.

Consoles are for playing games. They are specifically designed to be a singular target for this purpose and their market value is derived from that. As such, console makers NEED to skim off software sales because the cost of the hardware exceeds what people are willing to pay for a specialized gaming device.

If MS wanted to make those into general purpose devices , ei devices that the market intends to use for all personal computing, they'd have to rethink not only how they market the device, but how much they charge for it, the form factor and much of the hardware included in the package. It would be a completely different product offering.

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The distinction you are making will not matter one bit in a court of law.

 

[TooFriendly]

There's a Windows App Store?

 

[DJtal]

You don't own your games. Merely a license to play.

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Don't say that here. People like to believe they own their games.

 

[Hamster Plugin]

I think eventually ms is going to fix their hidden file issue. At least they better.

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They have had a decade to do so and are showing no interest. Their "modding update" this June just confirms that they want to keep the files locked away unless a developer approves modding.

 

[thisismadness]

It is different though, its explained in the OP. You wouldn't be able to buy a XSX or PS5 for 500$ if it wasn't for that 30% fee. They sell the boxes at a loss for a hope to profit off software. Apple sells their iPhones with gigantic profit margins and then gets more from you with their 30% app store fees.

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Yes I would. I've been buying consoles my entire life for $500 and less, long before digital storefronts came into prominence in the current gen. They already take a cut of every game sold on their platforms in the form of licensing fees and they force consumers to pay subscription fees for online play... they don't need 30% of every digital transaction. Granted, Apple has a far smarter business model but I don't see why that justifies other closed platforms to retain "monopoly power".

 

[ThereAreFourNaan]

It is different though, its explained in the OP. You wouldn't be able to buy a XSX or PS5 for 500$ if it wasn't for that 30% fee. They sell the boxes at a loss for a hope to profit off software. Apple sells their iPhones with gigantic profit margins and then gets more from you with their 30% app store fees.

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Pretty the lawsuit people wouldn't pack up their ball and go home if the iPhone cut its RRP by 50%.

 

[Alexandros]

As others have already pointed out, this statement of principles is meaningless since it is applied selectively. If we establish that the main function of a smartphone is to run third-party software then it is impossible to do so without also acknowledging that a game console's main function is also to run third-party software. Microsoft tries to make a distinction by referencing the game console business model but there is no law whatsoever that dictates you can exclude competition if you sell your product below cost.

Antitrust laws also don't care if a product is general purpose or not. Antitrust laws are applied to all kinds of markets, big and small, essential or luxury. They examine the state of competition in a market and the behavior of companies, not the product itself. Hoeg Law has stated so multiple times and the judge on the Epic lawsuit mentioned Sony, Microsoft and Nintendo by name. Every platform that operates as a walled garden will eventually be put under scrutiny.

 

[Trup1aya]

The distinction you are making will not matter one bit in a court of law.

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You can't really be so sure.

Would Microsoft have gotten into anti-trust issues if PCs hadn't become ubiquitous? Most certainly not.

Apple is already under anti-trust investigation in the EU for app store policies and how they limit users ability to use the hardware they've purchased. Even if current laws don't ultimately work against Apple, there's, political will to change the laws.

 

[CliveLH]

I knew it was Tom Warren before clicking the link...

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can we stop with the meta comment already ?

 

[Thiago]

I knew it was Tom Warren before clicking the link...

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Haha

 

[Alexandros]

You can't really be so sure.

Would Microsoft have gotten into anti-trust issues if PCs hadn't become ubiquitous? Most certainly not.

Apple is already under anti-trust investigation in the EU for app store policies and how they limit users ability to use the hardware they've purchased. Even if current laws don't ultimately work against Apple, there's, political will to change the laws.

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You are right in that one can never be sure because legislation is often vague enough to allow room for interpretation, since laws have to be able to cover many similar situations. However, what I am sure about is that competition and antitrust laws do not have any sort of clause that determines how big a market has to be in order for them to be applicable. This is the FTC's guide to antitrust laws:

Guide to Antitrust Laws

Do you have questions about antitrust? Read the guide for a discussion of competition issues and FAQs.

www.ftc.gov

Can anyone find any mention of the two main arguments that people are using? Namely, that consoles are different because they are not a necessity and that consoles are different because they are specialized?

In the section named "single firm conduct" the Microsoft case is used as an example.

Microsoft was found to have a monopoly over operating systems software for IBM-compatible personal computers. Microsoft was able to use its dominant position in the operating systems market to exclude other software developers and prevent computer makers from installing non-Microsoft browser software to run with Microsoft's operating system software. Specifically, Microsoft illegally maintained its operating systems monopoly by including Internet Explorer, the Microsoft Internet browser, with every copy of its Windows operating system software sold to computer makers, and making it technically difficult not to use its browser or to use a non-Microsoft browser. Microsoft also granted free licenses or rebates to use its software, which discouraged other software developers from promoting a non-Microsoft browser or developing other software based on that browser. These actions hampered efforts by computer makers to use or promote competing browsers, and discouraged the development of add-on software that was compatible with non-Microsoft browsers. The court found that, although Microsoft did not tie up all ways of competing, its actions did prevent rivals from using the lowest-cost means of taking market share away from Microsoft. To settle the case, Microsoft agreed to end certain conduct that was preventing the development of competing browser software.

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There isn't any mention of computers being a necessity or the computer market not being specialized. As I said in a previous post, antitrust laws govern various markets of all sizes. This is why Hoeg Law has said multiple times that the Epic v Apple case is a landmark one, because it will open the door to challenging all types of walled gardens.

The most important thing in Epic's court case is not the verdict itself but the way that the relevant market will be defined. If the judge rules that the market of iOS app distribution is a separate market to the smartphone market as a whole then it will be a cakewalk for another company to argue that Playstation, Xbox and Nintendo app distribution are separate markets too.

 

[Trup1aya]

As others have already pointed out, this statement of principles is meaningless since it is applied selectively. If we establish that the main function of a smartphone is to run third-party software then it is impossible to do so without also acknowledging that a game console's main function is also to run third-party software. Microsoft tries to make a distinction by referencing the game console business model but there is no law whatsoever that dictates you can exclude competition if you sell your product below cost.

Antitrust laws also don't care if a product is general purpose or not. Antitrust laws are applied to all kinds of markets, big and small, essential or luxury. They examine the state of competition in a market and the behavior of companies, not the product itself. Hoeg Law has stated so multiple times and the judge on the Epic lawsuit mentioned Sony, Microsoft and Nintendo by name. Every platform that operates as a walled garden will eventually be put under scrutiny.

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This isn't it. The primary function of a video game console is to play video games.

Anti-trust laws intend to promote competition for the benefit of consumers. The business practice of a console maker skimming all software sales will easily stand up to scrutiny, because the economics of making a console dont work without the software sale offsetting the cost of bringing the device to market. It's not about being anti-competitive, its about being viable. It's quite easy to argue that consumers want the low cost access to optimized games that consoles provide, and that software royalties are the only viable business models to provide this product to consumers. To quote the FTC, this model allows console makers "to operate efficiently, keep prices down, and keep quality up." With regards to the hardware they sell.

The primary function of smartphones is to serve as a handheld PC. Apple iPhones are without a doubt PCs. In the PC space, antitrust laws prohibit Microsoft from exploiting control over windows for anticompetitive purposes. Specifically, the antitrust laws prohibit Microsoft from restricting access to Windows solely to harm competition or force users to purchase other Microsoft products. This is exactly what Apple does.

Apple's business is viable even if they didnt block competition on their devices. We know this because iOS was successful before they started allowing the sale of native apps AND their leading competitor in the mobile PC space, google, allows competitors on the device.

It's only a matter of time before Apple gets served, either by existing laws or ones that crop up in the future.

You are right in that one can never be sure because legislation is often vague enough to allow room for interpretation, since laws have to be able to cover many similar situations. However, what I am sure about is that competition and antitrust laws do not have any sort of clause that determines how big a market has to be in order for them to be applicable. This is the FTC's guide to antitrust laws:

Guide to Antitrust Laws

Do you have questions about antitrust? Read the guide for a discussion of competition issues and FAQs.

www.ftc.gov

Can anyone find any mention of the two main arguments that people are using? Namely, that consoles are different because they are not a necessity and that consoles are different because they are specialized?

In the section named "single firm conduct" the Microsoft case is used as an example.

There isn't any mention of computers being a necessity or the computer market not being specialized. As I said in a previous post, antitrust laws govern various markets of all sizes. This is why Hoeg Law has said multiple times that the Epic v Apple case is a landmark one, because it will open the door to challenging all types of walled gardens.

The most important thing in Epic's court case is not the verdict itself but the way that the relevant market will be defined. If the judge rules that the market of iOS app distribution is a separate market to the smartphone market as a whole then it will be a cakewalk for another company to argue that Playstation, Xbox and Nintendo app distribution are separate markets too.

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It's not about how big the market it, it's about how the business practices limit competition with a negative impact on consumers.

Console practices arent anti-competitive while Apple's are, and the purpose of these devices highlights why one is harmful to consumers and the other isn't.

 

[Cosmic Schwung]

There is one example of a digital store that allows you to sell your games on. Needless to say it hasn't taken off in a significant way yet but maybe it could be the start of something.

It is different though, its explained in the OP. You wouldn't be able to buy a XSX or PS5 for 500$ if it wasn't for that 30% fee. They sell the boxes at a loss for a hope to profit off software. Apple sells their iPhones with gigantic profit margins and then gets more from you with their 30% app store fees.

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That would mean the console prices are being subsidised off the back of the developers. Either way they're missing out. Also consoles aren't sold at a loss forever so what's happening once they're profitable?

 

[Alexandros]

This isn't it. The primary function of a video game console is to play video games.

Anti-trust laws intend to promote competition for the benefit of consumers. The business practice of a console maker skimming all software sales will easily stand up to scrutiny, because the economics of making a console dont work without the software sale offsetting the cost of bringing the device to market. It's not about being anti-competitive, its about being viable. It's quite easy to argue that consumers want the low cost access to optimized games that consoles provide, and that software royalties are the only viable business models to provide this product to consumers. To quote the FTC, this model allows console makers "to operate efficiently, keep prices down, and keep quality up." With regards to the hardware they sell.

The primary function of smartphones is to serve as a handheld PC. Apple iPhones are without a doubt PCs. In the PC space, antitrust laws prohibit Microsoft from exploiting control over windows for anticompetitive purposes. Specifically, the antitrust laws prohibit Microsoft from restricting access to Windows solely to harm competition or force users to purchase other Microsoft products. This is exactly what Apple does.

Apple's business is viable even if they didnt block competition on their devices. We know this because iOS was successful before they started allowing the sale of native apps AND their leading competitor in the mobile PC space, google, allows competitors on the device.

It's only a matter of time before Apple gets served, either by existing laws or ones that crop up in the future.



It's not about how big the market it, it's about how the business practices limit competition with a negative impact on consumers.

Console practices arent anti-competitive while Apple's are, and the purpose of these devices highlights why one is harmful to consumers and the other isn't.

Click to shrink...

We disagree but that was a very interesting read, thanks for taking the time to write it.

 

[Trup1aya]

There is one example of a digital store that allows you to sell your games on. Needless to say it hasn't taken off in a significant way yet but maybe it could be the start of something.



That would mean the console prices are being subsidised off the back of the developers. Either way they're missing out. Also consoles aren't sold at a loss forever so what's happening once they're profitable?

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Consoles are sold at a loss. The console maker sells them to retailers for less than or at cost to make. Then you have to factor in R&D, logistics and marketing. The profit comes from software and service sales.

Them becoming profitable in the future doesnt mean "something has to happen" to adjust the model. Profitability is the justification for operating a business.

Consoles arent being subsidized on the backs of developers. Developers are paying for access to a market provided by the manufacturer- a market that likely wouldnt exist without console makers taking a hit on hardware at huge risk. both parties have a stake in making the console ecosystem viable, with the console maker assuming a much higher risk than anyone else.

We disagree but that was a very interesting read, thanks for taking the time to write it.

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No problem!