Apple app store rules limit rival gaming services

Video-game fans suddenly have their pick of a huge menu of titles thanks to a raft of new mobile subscription services from Apple, Microsoft, Alphabet’s Google and Nvidia. But for the more than 1 billion users of Apple’s iPhone and iPad, the only real option is Arcade, the subscription service launched by the company in September.

That’s because Apple imposes strict limits on the kinds of apps users can access on its devices. For example, App Store guidelines ban services that rely on streaming from the cloud. Arcade adheres to the requirements, in part, because it’s included as a feature within the App Store itself. This is the latest example of what critics say are arbitrary rules favoring Apple’s own apps at the expense of similar software from outside developers.

“There’s a fraught relationship between developers and Apple precisely because of rules like this,” said David Barnard, a longtime independent developer and advocate at RevenueCat. “In some ways, I am incredibly grateful to their marketplace for helping me make millions of dollars I wouldn’t have made without it. On the flip side, them being so heavy handed at times does kill apps and does cause developers to miss out on other potential revenue.”

If software developers want to reach as many consumers as possible, they have to be on Apple’s iOS. The operating system powers more than 1 billion smartphones and tablets and it’s the only way to access the iOS App Store, which accounted for 65% of app spending globally last year, according to Sensor Tower. The Cupertino, California-based company can also make or break mobile gaming businesses: More than half of the $62 billion spent on smartphone gaming last year happened on Apple products.

Cloud gaming services, where users stream games live over the internet, are growing in popularity, especially as faster fifth-generation, or 5G, wireless networks proliferate. The new offerings from Microsoft, Nvidia and Google are cloud streaming-based, while Apple Arcade is not. Those other services are found on the Android operating system, which powers 2.5 billion devices worldwide. Among the popular games found there, and missing from iOS, are Red Dead Redemption 2, Gears of War 5 and Destiny 2.

Asked about the challenge of reaching iPhone and iPad users with the chipmaker’s GeForce Now service, an Nvidia spokesperson said: “Ask Apple.”

Apple said its “customers enjoy great apps and games from millions of developers and gaming services can absolutely launch on the App Store” if they follow the App Review Guidelines, which means that games have to be submitted individually, allowing them to appear in App Store rankings and search. The company also said it intends to continue building on its relationships with developers and providing a level playing field.

“Developers can choose to reach all iPhone and iPad users over the web through Safari and other browsers on the App Store,” Apple said. But currently the new cloud-based gaming streaming services aren’t accessible through web browsers on iPhones and iPads.

Whether the restrictions raise antitrust issues is another matter. The policies were in place before the latest gaming services launched, and “I don’t see it cutting one way or the other,” said David Reichenberg, an antitrust lawyer at Cozen O’Connor.

Apple said there is strong competition in every category in which it makes its own apps. Arcade, only available on iOS, is $4.99 per month for more than 100 games and is a growing contributor to the company’s services revenue, which is important amid a period of reduced hardware sales growth.