"Google’s statement is deceitful. Shame on them." Epic CEO Tim Sweeney lays the smackdown on Google after its new statement that Microsoft was "always able" to offer an Xbox store on Android

Google and Microsoft personified as robots duking it out in a wrestling match

On Monday Night .RAW, it's Google Chromeberg vs. Microsoftaker in a dreaded Hell in the Excel match! (Image credit: Windows Central | Microsoft Copilot)

In the post Windows Phone world, Microsoft finds itself in the unenviable position of having to beg Google and Apple for scraps to support its mobile computing efforts.

Whether it's Microsoft Edge, Microsoft Copilot, or Xbox Cloud Gaming, Apple and Google are doing everything in their power to prevent their biggest rival from making any headway on phones, as you might expect. The latest scuffle revolves around Android, which as of right now, certainly doesn't make it easy for third-party developers to find success on its platform.

To that end, Microsoft, Epic Games, and even companies like Samsung have explored building their own app stores to sidestep Google's fees. However, since 99% of people get their Android apps direct from Google Play, there's little to zero chance of any third-party app store on Android ever finding real traction. Still, that hasn't stopped them from trying. Microsoft's own Android app store for Xbox mobile games has since been delayed pending court decisions in the United States, over Google's rules for Android app delivery.

Yesterday in a post on BlueSky, Sarah Bond laid out the current state of play for the Xbox mobile app store for Android. "At Xbox, we want to offer players more choice on how and where they play, including being able to play and buy games directly from the Xbox app. I recently shared our ambition to unlock these features first with the Google Play Store on Android devices in the U.S. while other app stores adapt to meet consumer demand," Bond emphasized. However, as expected, Google isn't taking Microsoft's efforts lying down.

Xbox Cloud Gaming on Backbone controller — Due to Google's 30% fees on transactions, Microsoft had to remove in-app purchases from its Xbox app on Android to keep the service financially viable. It's now accessible on the web at xbox.com/play. (Image credit: Future)

Google was granted a grace period by the U.S. courts while it builds its appeal case, leading to the feature being delayed. Bond continued, "Due to a temporary administrative stay recently granted by the courts, we are currently unable to launch these features as planned. Our team has the functionality built and ready to go live as soon as the court makes a final decision."

Now, Google itself has responded (via PureXbox). "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." Google claims, "The Court’s order, and rush to force its implementation, threaten Google Play’s ability to provide a safe and secure experience. Microsoft, like Epic, are ignoring these very real security concerns. We remain focused on supporting an ecosystem that works for everyone, not just two of the largest game companies."

Google's inference of its court battles with Epic Games led to the Fortnite dev's CEO Tim Sweeny swinging in with some comments of his own: "Google’s statement is deceitful," Sweeney's post on Twitter reads, "Shame on them. They well know that the 30% cut they demand is far more than all of the profit from game streaming. They know this because they blew hundreds of millions of dollars building the failed Stadia game business themselves."

Oof, as the kids say. Let's break down what's actually going on.

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And what's the bottom line?

Logitech G Cloud leaning against retail box with Xbox Wireless Controller. — Android-based gaming devices have never really taken off, and at least part of that is likely due to Google's steep cut on app sales forcing manufacturers to price themselves out of the market to make a profit. (Image credit: Windows Central | Zachary Boddy)

Tim Sweeney is completely correct that Google's statement is deceitful. The firm doesn't mention the fact that Microsoft and Epic Games are opting out of the Google Play model due to its steep 30% cut on software sales. Xbox, PlayStation, and Nintendo all take a similar cut on their hardware platforms, but the hardware there is sold at cost or for wafer thin margins generally speaking — the cut is there to keep the platform afloat. Apple conversely sells its hardware at a premium on top of its 30% cut for developers, which is a bit like having your cake and eating it.

But wait, Google itself doesn't actually deliver its own hardware for the most part, so there's no margin to speak of there generally speaking. Its Pixel phones have a vanishingly small global footprint, and its own Android Pixel tablet range has reportedly been cancelled. The Android business hinges almost entirely on software and services rendered through Google Play on third-party devices, while also feeding its mammoth ad empire (which, by the way, the United States recently described as a monopoly). Google requires its hardware partners to preinstall its apps and services on these handsets to gain access to Google Play, while also controlling the default apps on top too. This gives it a huge advantage when it comes to data powering its search and ad empire.

Its status as a middle man has irritated developers like Microsoft and Epic Games, who can't grow new businesses, like the cloud gaming business, owing to that 30% cut on app revenue. Cloud gaming is unprofitable as of 2024 by all accounts, and the inability to sell in-app purchases on Google Play is one thing holding it back. At the same time, discoverability will be near non-existent without a Google Play listing, increasing Microsoft's user acquisition costs.

As much as I loathe Google (in no small part for its anti-competitive behavior towards Windows Phone), it's hard not to see their point of view to some degree. With the United States Department of Justice describing Google's ad business as a monopoly, there's a real chance that they might have to explore other avenues for Android profitability if they're forced to dent its own ad business. It would be neglectful of them to not fight this, playing devil's advocate for a sec, given that they could be forced to give up two revenue streams for Android instead of just one.

Xbox cloud gaming show on a variety of devices — Microsoft's "Xbox Everywhere" strategy hinges on selling Xbox games on every platform humanly possible. So far, its efforts have revolved around Windows PC and the mobile web, thanks to Apple and Google's iron grip on native mobile software. (Image credit: Microsoft | Windows Central)

Microsoft's 30% cut on developers for Xbox games is designed around selling the Xbox Series X|S hardware as cheaply as possible for consumers and customers Microsoft has signalled that it intends to open up future Xbox consoles to third-party game stores like the Epic Games Store and Steam itself, but that vision is likely years away from materializing. Microsoft does take a smaller cut than usual on its Microsoft Store for PC games, though, at around 12% compared to the typical 20-30%.

I would argue Windows' open platform model has been better for consumers than what is offered by iOS and Google-brand Android, where Microsoft takes 0%, leaving innovators to build business like Steam unhindered. Android is more open than iOS, allowing for easy side-loading and pre-installed OEM app stores, but the tight grip it maintains over Google Play does promote its own products at the expense of others. Amazon's Kindle book app on Android, for example, was also forced to remove in-app purchases by Google, while Google continues to sell books itself via Google Play.

Where all of this goes will ultimately be up to the courts, but it could've all been avoided if Microsoft had just continued investing in growing its own mobile platform... you know, like Windows Phone. And THAT'S the bottom line!