Japan’s Fair Trade Commission is looking into whether Apple improperly pressured Yahoo Japan to shut down a game streaming platform that competed with the iOS App Store, according to Nikkei. Yahoo Japan’s Game Plus service allowed people to stream full games made for other platforms and to play HTML5 games on mobile phones, which would have allowed iPhone owners to get games without going through the App Store.
Nikkei reports that Yahoo Japan slashed the program’s budget last fall, just months after it launched, and told partners that it was due to pressure from Apple. It’s said to have begun filing complaints with Japan’s FTC around the same time.
A major alternative could steal revenue from the App Store
Developers essentially have no good alternative to the App Store on iOS. Their only other option is the web, which is a wonderful place for websites, but the web is rarely as fast or flashy as a native app. There are a great number of features that only native apps can take advantage of, which requires going through the App Store and giving Apple a 30 percent cut of most sales.
Yahoo Japan’s service was meant, in part, to be an alternative to that, offering better terms to developers, according to Nikkei, and fewer restrictions around how games were updated and sold. Final Fantasy creator Square Enix had even signed on and produced an exclusive game for the platform, which has since been pulled.
While it’s hard to imagine a web platform stealing much attention away from the App Store, any alternative that works well enough would be a threat. That’s particularly important as Apple focuses more and more on revenue from its services division. As an example of what can happen: Google is expected to lose $50 million in just the next five months because Epic Games was able to skirt the Play Store when launching Fortnite on Android.
Of course, game streaming is a difficult business that no one’s really managed to crack in a successful way just yet. So it’s unclear how competitive this service would have been. But Nikkei’s report would indicate that it was seen as a potential challenger. Nikkei didn’t receive comment from Apple or Yahoo Japan.
Yahoo Japan is no longer related to Yahoo (Yahoo had a stake in Yahoo Japan, but that stake remained behind in a holding company when Yahoo was purchased by Verizon). While it’s an independent entity, SoftBank owns very nearly half of Yahoo Japan, and this may have contributed to Game Plus’ demise. SoftBank handles payments to the App Store made by its mobile phone subscribers, taking a cut from those payments, and Nikkei reports that the company got involved with Yahoo to protect that revenue stream.
If that’s the case, it complicates what’s going on. And Nikkei warned that, because the companies involved may not be interested in helping with the investigation, it’s very possible the FTC won’t be able to prove any improper actions were taken.
Apple just recently managed to get out of another investigation from Japan’s FTC. The commission said that Apple may have violated antitrust rules by forcing a specific payment scheme on service providers selling the iPhone, but the company wasn’t punished because it agreed to make changes.