In the Shadow of Antitrust Law | The DeanBeat

Game developers live in the shadow of giants. It almost sounds like a dramatic video game setting.

This week, we saw more of that. Apple just agreed to end its monopoly on the iOS platform for payments services in the European Union. Now, it will allow payment companies to use the technology behind Apple Pay to create competing payment services as part of a settlement with EU regulators.

The deal applies only in the European Union, which earlier this year allowed alternative app stores and online stores to open in competition with gatekeepers like Apple and Google. That was the result of the EU’s Digital Markets Act, and now another practice that was seen as monopolistic is also ending.

Until now, Apple has refused to give rivals access to the iPhone’s near-field communications technology, or NFC, which lets people touch their phones to the payment reader and quickly pay via Apple Pay. This tap-and-go technology adds convenience to rival payment services, which could open up competition.

Much of this crusade against Apple’s monopoly was litigated in the Epic Games v. Apple antitrust trial. Epic only contributed a small part of that case—the right to advertise lower prices in alternative app stores—but the EU has taken up a significant part of its case and restricted Apple’s behavior in Europe. It remains to be seen whether that will lead to further antitrust action around the world.

Great move by the European Commission and Apple, which will benefit all Europeans. It’s a shame that companies and citizens from all other countries in the world are excluded from the commitments on open payment technologies. https://t.co/xc0yrkSqgX

— Tim Sweeney (@TimSweeneyEpic) July 11, 2024

For game developers, this is a good thing, as we move towards 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. In most cases, game developers still pay 30% of every dollar they earn to the platform hosts.

As we observe Apple’s efforts to maintain its 30 percent share and monopoly, we should also pay attention to other moves.

Microsoft this week announced that it will raise Xbox Game Pass subscription prices for both Xbox and PC games starting in September.

This is one of the effects of market consolidation and Microsoft’s successful acquisition of Activision Blizzard for $68.7 billion, which included the Call of Duty game series.

Price hikes are like the other shoe dropping. In June, Microsoft showed us a dizzying array of games for Xbox and Windows PC. And here’s the other half of the news: you have to pay for it.

Before the acquisition deal closed, the Federal Trade Commission sued Microsoft for violating antitrust laws because it believed Microsoft could take the multiplatform Call of Duty franchise and make it exclusive to Microsoft’s gaming platforms, leaving Sony, Steam, and Nintendo out in the cold. That would be a disservice to consumers on those platforms, the FTC argued. The FTC lost because antitrust laws are actually meant to protect consumers, not companies that are competitors.

Now Microsoft has introduced a Byzantine range of prices for its subscriptions. The net result could be a very bad price hike for consumers—exactly what the FTC sought to avoid with its lawsuit.

Xbox Game Pass Ultimate subscribers will pay $20 per month on September 12, which is a $3 increase from the current price of $17 per month. The $20 price includes day-one titles like Call of Duty: Black Ops 6, which is coming this fall. Players who skip those day-one titles will pay a few dollars less.

For gamers, it’s an interesting calculation. If they’re going to be playing a lot of brand new games and big titles like Call of Duty, they might as well pay for Xbox Game Pass Ultimate and get Call of Duty for a few bucks more instead of the $60 or $70 they might pay for the standalone title.

Microsoft is calling attention to its practices by raising prices, which could cast a shadow over the rest of the industry. Gamers have noticed and are pissed that Microsoft has shot itself in the foot again in this way. The move could also trigger another round of antitrust activity from the FTC, so Microsoft should tread carefully. If I were Microsoft, I wouldn’t even think about raising prices for gamers.

We don’t need more than one Apple to cast such a large shadow over gaming.