Windows 11’s new app store is bad news for Apple and Google

OPINION: App stores on desktop operating systems don’t work.

There are a few reasons for this, but it’s mainly because the stores themselves aren’t comprehensive.

Software companies, who don’t want to pay a 10-30 per cent store tax, can simply instruct their users to download an .exe file directly from their web browser and pocket 100 per cent of their revenue. It’s a no-brainer.

Microsoft is trying to change that (again) with Windows 11. And this time, I think it’s got a chance. Why? Because Microsoft is going to let developers keep all their Windows app store revenue.

App stores on desktop operating systems don't work. Microsoft is trying to change that with Windows 11, and this time, it might have a chance. (File photo)

Swayne B. Hall/AP

App stores on desktop operating systems don’t work. Microsoft is trying to change that with Windows 11, and this time, it might have a chance. (File photo)

READ MORE:
* Apple is spooked about the future of the App Store
* Epic Games vs Apple: Who do we want to win?
* How to tell if you can, and if you should, upgrade to Windows 11
* Five things to know about Microsoft’s Windows 11 operating system

Yep. You read that right. All. Of. It.

Developers are free to use their own payment systems on apps sold through the Windows 11 app store, and Microsoft won’t touch a penny.

The move represents a sizeable shift for Microsoft, as it currently collects a 15 per cent cut of app revenues (12 per cent for games).

That’s not all. Microsoft is also working hard to incorporate third-party app stores inside its own app store. One of the biggest headlines from the Windows 11 launch event was that it’ll let you run Android apps. And the way this will work is by aggregating Amazon’s (Android) App Store inside the Microsoft Store.

Amazon, of course, will continue to take its 20 per cent cut of the revenues that pass through its servers. But Microsoft doesn’t care.

The reason, according to Microsoft’s Chief Product Officer, Panos Panay, is because Windows 11 wants an “experience where you go to the store, you type the app in and you get the app you want”.

Fair enough.

Windows 11 will be released later in the year.

Microsoft

Windows 11 will be released later in the year.

Microsoft’s ambitions for its store don’t end with Android apps. It’s courting other third-party app stores, like Steam and the Epic Games Store. Microsoft wants them to live rent-free inside the Windows 11 app store.

It’s a head-scratching strategy. Recent figures suggest Steam is bringing in several billion dollars of revenue per year. Steam, remember, is almost totally reliant on Windows for its users.

Which begs the question: why is Microsoft working so hard to make third parties more money?

A few reasons.

The Microsoft Store is a flop that’s never been anywhere near Apple’s and Google’s levels of profitability. So the sacrifice Microsoft is making here isn’t as big it appears.

The gesture will also have a very real impact on the regulatory pressure Apple and Google are currently facing regarding their own app stores. Seeing that duopoly fall can only be a good thing for Microsoft – as it will (potentially) give them another crack at the mobile devices market.

David Court: The Microsoft Store is a flop that's never been anywhere near Apple’s and Google's levels of profitability. So the sacrifice Microsoft is making here isn't as big it appears.

Abigail Dougherty/Stuff

David Court: The Microsoft Store is a flop that’s never been anywhere near Apple’s and Google’s levels of profitability. So the sacrifice Microsoft is making here isn’t as big it appears.

There’s also a bit of if-you-can’t-beat-em-join-em here. Third-party app stores are already a thing on Windows, and there’s little Microsoft can do about it. Releasing a new OS with a revamped Microsoft Store that promises to “get the app you want” allows Microsoft to have more control over the user journey.

And controlling the Windows user journey has the potential to solve a lot of security problems for Microsoft. It’s been the home of malicious computing for too long.

There’s one more reason. Maybe.

If/when the world’s 1.3 billion Windows users start visiting the Microsoft Store to download their apps, who’s to say Microsoft won’t one day use that position of dominance to rethink whether it deserves a small cut of transactions that take place on its store.

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