Microsoft and Google are fighting over the future of Xbox

In October, it became very clear that Microsoft and Google were at war again. After a six-year truce on legal battles ended in 2021, Google has, in recent months, been voicing its concerns about Microsoft’s cloud business. That particular dispute is at the “lobbying regulators” stage, but another disagreement between the two tech giants has slipped into the courts and the public sphere and could sway the very future of Xbox.

Microsoft revealed last week that it built a new Xbox game store for Android but has been unable to launch it. The store relies on a key court ruling that would force sweeping changes to Google’s Play Store, opening it up to competition and ending the requirement for apps to use Google Play Billing. Microsoft has been desperate for regulators to act and pave the way for its ambitious Xbox mobile efforts. But after the court ruling offered a brief moment of hope, Google won a temporary administrative stay blocking the changes from coming into effect in November.

Microsoft had planned to sell games directly in its Xbox app for Android and allow customers to immediately stream those games directly to their phones and tablets. These two features combined aren’t possible right now, unless Microsoft is willing to sacrifice 30 percent of Xbox game purchases on Android to Google.

“Due to a temporary administrative stay recently granted by the courts, we are currently unable to launch these features as planned,” said Xbox president Sarah Bond in a Bluesky post last week on the eve of Thanksgiving. “Our team has the functionality built and ready to go live as soon as the court makes a final decision.”

Google’s reaction was different, though. “Microsoft has always been able to offer their Android users the ability to play and purchase Xbox games directly from their app – they’ve simply chosen not to,” said Google spokesperson Dan Jackson in response to Microsoft’s public complaint.

As always, the reality between Microsoft’s and Google’s statements here is somewhere in the middle. Microsoft used to allow you to buy games in the Xbox mobile app on Android, but it removed the functionality in 2020 when it decided to add remote console streaming to the app. Google’s Play Store policies mean Microsoft would have to give up a 30 percent cut if it wanted to allow Xbox players to buy games in an Android app and then also play them.

Google “allows customers to purchase digital content using non-Google commerce systems in a native app — but only if the content is not consumed in the app, e.g., a customer can use Sony’s PlayStation app to purchase (but not to play) digital games,” says Microsoft in a court filing last month. That explains why Sony and Valve both offer the ability to buy games in their Android apps but run separate streaming apps for remote play.

Microsoft says Google’s fees are “exorbitantly expensive,” making it “uneconomic” for the company to offer streaming Xbox games in the way it wants to. More than that, Microsoft says Google Play Billing just won’t work because in-game purchases in Xbox console games are engineered to use its own payment systems. It would “take years” for Microsoft to rewrite the code, the company says. “Many of the most popular Xbox games are third-party titles that Microsoft cannot rewrite because it does not develop those games,” says Microsoft.

I’m not so sure it would take years to offer Google’s payment system in Xbox games, but it’s clearly something Microsoft has no incentive to build just to give 30 percent of game purchases to Google. Microsoft should be allowed to easily link out to a website to let people stream the games they just purchased — exactly the type of Xbox app it just built.

The court ruling and any potential delay here will be key to Microsoft’s plans to extend Xbox beyond a console base that isn’t growing. Microsoft recently launched its “This is an Xbox” marketing campaign to try and make people think of phones, laptops, tablets, and handheld gaming PCs as Xbox devices. This entire marketing campaign and Microsoft’s strategy rely heavily on regulators and courts forcing Apple and Google to open up their stores and allow the purchase and streaming of Xbox games without the 30 percent cut.

Microsoft wants to make it easy for people to buy Xbox games or subscribe to Xbox Game Pass and then play those games within a single app to make it feel like a phone truly is an extension of an Xbox console. Back in 2018, Microsoft strongly believed it could reach 2 billion more gamers this way, and it was confident it would be able to launch an Xbox Cloud Gaming app on iOS and Android and sell consumers on its Xbox Game Pass vision.

That never happened. Microsoft’s entire Xbox mobile vision has been delayed and complicated by app store policies from Google and Apple, but Xbox president Sarah Bond still very much believes in this vision. Sources at Xbox tell me that Bond has staked her career reputation on the idea of Xbox being everywhere, across multiple platforms and devices.

The new “This is an Xbox” marketing effort is the first big campaign to launch after Microsoft shook up its internal Xbox marketing teams earlier this year. Former Xbox chief marketing officer Jerret West departed in June, enabling Microsoft Gaming to move its marketing teams closer to the Xbox business instead of Microsoft’s central marketing teams. The Xbox marketing team now reports directly up to Bond, who is clearly keen to get the “Xbox everywhere” message out there.

A big part of this “Xbox everywhere” strategy is an Xbox mobile store. Microsoft has been teasing its vision of a “next-generation” Xbox store on mobile for years, with Microsoft’s $68.7 billion acquisition of Activision Blizzard securing key mobile games like Call of Duty and Candy Crush that could potentially tempt consumers away from the Google Play Store and Apple’s App Store.

Microsoft was hoping that the EU’s Digital Markets Act would help it launch the Xbox mobile store this year, with Xbox chief Phil Spencer describing the regulations as a “huge opportunity” for Microsoft. That mobile store hasn’t emerged, though. Microsoft said a web-based version was going to launch in July, but it didn’t happen. That particular web store is still in testing, and it’s not clear exactly why it was delayed.

The danger for Microsoft’s “Xbox everywhere” strategy is very clear from this Google court case and its mobile Xbox store struggles. Microsoft has to play by the rules of other platform holders, and the potential outcome of a court case can sway its entire Xbox strategy and how it offers games across multiple devices. Until mobile app stores are forced open, Microsoft now has to find workarounds or lobby regulators even harder to make its Xbox vision a reality.

• Microsoft faces another FTC investigation and has come out fighting. The Federal Trade Commission is investigating Microsoft’s software licensing business, cybersecurity services, and AI offerings. First reported by Bloomberg and confirmed by The Verge, the investigation is part of a wide-ranging probe into Microsoft, making it the fifth big tech company to come under such scrutiny in recent years. While both the FTC and Microsoft didn’t initially comment on news of the antitrust investigation, Microsoft accused the FTC of leaking the news earlier this week. Microsoft’s corporate vice president and deputy general counsel Rima Alaily accused FTC management of violating the agency’s own ethics guidelines in a letter that made it clear Microsoft thinks Bloomberg’s source is someone at the FTC.
• No, Microsoft isn’t using your Office docs to train its AI. After social media posts accused Microsoft of using Word and Excel documents to train AI systems, Microsoft has clarified that it’s not using customer data to train its AI models. The confusion arose from a poorly worded privacy setting in Microsoft 365 apps and even a Microsoft support document. It’s not unusual for Microsoft to have confusing features and support documents, and Microsoft was quick to correct the record in a statement.
• Samsung’s DeX app on Windows is being replaced by Microsoft’s Phone Link. Samsung is quietly killing off its dedicated DeX app on Windows with its upcoming One UI 7 update. The DeX app for Windows, not to be confused with the broader DeX platform that turns your phone into a PC, lets you mirror your phone screen to a PC and easily drag and drop files between the devices. Samsung is now recommending people switch to Microsoft’s Phone Link app instead, which offers similar functionality and is an app that Samsung has closely collaborated with Microsoft on in recent years.
• Microsoft faces a £1 billion lawsuit in the UK over cloud pricing. The FTC isn’t Microsoft’s only headache over cloud competition concerns. Across the pond, Microsoft is now facing a £1 billion ($1.2 billion) lawsuit for what is being described as overcharges to use alternative cloud solutions. Google filed a complaint with the EU recently over similar concerns, and it looks like the pressure is building on Microsoft over its lucrative Azure and Windows Server licensing costs.
• Microsoft pauses Windows 11 updates for PCs with some Ubisoft games installed. The latest Windows 11 version 24H2 update has been causing issues for Star Wars Outlaws and games in the Assassin’s Creed series, with players reporting crashes after installing the Windows update. I’m surprised it has taken this long, but Microsoft has finally paused updates for PCs with some of these Ubisoft games installed, after Ubisoft promised multiple times to address the issues without success.
• Microsoft 365 had a big outage last week. I was busy hiking in the mountains last week and thought that Outlook on my phone was bugging out due to poor connectivity, but it turns out that a major Microsoft 365 outage was wreaking havoc on Outlook, Microsoft Teams, and more. The all-day outage took some time to fix, but Microsoft finally got things under control late on Monday night.
• MSI has two new Windows-powered handheld gaming PCs. MSI is releasing two new Claw 7 AI Plus and Claw 8 AI Plus handhelds, starting at $799 for the Claw 7 and $899 for the Claw 8. MSI had some battery life and performance issues on its first attempt with the original Claw last spring, so hopefully these new Lunar Lake-powered devices improve things this time around.
• Microsoft closes the door on Windows 11 supporting older hardware. Microsoft has poured cold water on any hopes of lower hardware requirements for Windows 11. A blog post this week makes it clear that the TPM 2.0 requirement is “non-negotiable” and that Microsoft won’t be lowering its Windows 11 hardware requirements ahead of the Windows 10 end of support date in October 2025. You can still bypass these restrictions with some workarounds or by using the Windows 11 LTSC edition, but I certainly wouldn’t recommend workarounds, as you never know when an update could block older hardware.
• Microsoft is testing a new in-game browser. Edge Game Assist is a new widget for the Xbox Game Bar overlay that brings up tips and guides for the game you’re playing on Windows 11. It’s basically Microsoft’s equivalent of the Steam browser overlay, but it crucially uses the same profile you’re logged in to on Edge. You’ll have all your data, cookies, autofill, and favorites, so you won’t have to log in to sites again.
• The new Microsoft 365 Companion apps start to appear. During Ignite last month, Microsoft surprise announced that Windows 11 is getting contacts, files, and calendar companions on the taskbar. While few details were shared about how these will work, Windows 11 testers started spotting the file search companion app appearing in builds last week. It looks like the apps will be web-based and float above the taskbar.
• The Microsoft Store on Windows 11 is now faster with better support for Win32 apps. Microsoft has been quietly improving the Microsoft Store app on Windows 11 in recent months, reducing its start time by 25 percent and reducing the number of download hanging issues by 50 percent. I’m still not a big fan of this store for game downloads, but Microsoft has also added Win32 app support to the store web installer, alongside a redesigned library page and a new updates and downloads page.
• Microsoft’s Copilot now has AI “Vision” to read webpages. Microsoft has started testing its new Copilot Vision feature, which allows Microsoft’s AI companion to see what you see on an Edge webpage you’re browsing. This has the potential to be both cool and creepy, and a video demo shows how it could be useful for some. Microsoft is treading carefully here, though, limiting the Copilot Vision preview to some Copilot Pro subscribers in the US and only on certain websites. It’s looking at feedback before it rolls this out more broadly.

Thanks for subscribing and reading to the very end. Hopefully you read my email from earlier this week about Verge subscriptions, but if not, then your Notepad subscription is being rolled into a Verge subscription, so you get more benefits at a lower annual cost. All the changes are outlined here, and if you’re experiencing any account issues or billing problems, then please reach out to support@theverge.com. Thanks again for supporting my work and The Verge.

If you’ve heard about any of Microsoft’s other secret projects, you can reach me via email at notepad@theverge.com or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.