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Apple sets new rules for game streaming services

On Friday, Apple announced that it would be setting new guidelines for its App Store ahead of its IOS 14 launch. The new rules are set to include revised regulations around game streaming services, which have been in the spotlight in the past few months. Yahoo Finance’s Dan Howley joins The Final Round to discuss the details.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. We've got some news on Apple today, releasing updated App Store guidelines. They do this every year.

But what's interesting about today's announcement is its impact that it will have on streaming game services. Dan Howley joins us now with more on this. And Dan, just help us make sense of why these changes are coming now, and the significance of these changes.

DAN HOWLEY: Well, Seana, the changes are coming out because services like Microsoft's X Cloud, Project X Cloud, and Google Stadia are now up and running. So they are trying to get access to iOS devices. And Apple is basically saying-- well, they were previously saying you can't. And now they're saying, sure, you can, but we're going to make it a little difficult.

Now, what streaming services are basically supposed to allow you to do is be able to play games on any device that you have. So think of it as Netflix for video games, as much as the companies hate for people to describe it that way. You would be able to get access to your own games library, as far as Google Stadia goes. Or with Microsoft, you would be able to get access to Microsoft's own hundreds of games on any device you own. That's TV. That's console. That's your smartphone, your laptop, desktop-- anything that really has an internet connection and a screen, you would get a play on.

Now, the problem with the iOS App Store guidelines is that they want these companies to get consumers to download every game that they would use. They would also have to review all of the games that are available through this service.

Now, the point of these kinds of services is that you don't have to download them. You literally stream them. That's like asking Netflix users to download every show or every movie they download on Netflix to their iPhone or iPod.

This doesn't make sense from a practicality standpoint, because that would take up so much space on your device. And from a consumer friendliness standpoint, you just want to give them immediate access, not have them sit there and wait.

So this is going to be a big problem going forward for the adoption of services like X Cloud and Stadia and other game streaming services that are coming down the line. And it also hurts Apple, because again, the big issue with them in antitrust is their control of the App Store.

Now, this has nothing to do with the 30% cut that Apple takes. That's really where the problem is for them that companies see Apple having. But what it does is just proves the iron grip that Apple has over its App Store.

Now, it is its own app store, by the way. So that's basically what they can do if they want. But it does just lend credence to the idea that it can hurt other companies and other industries if they don't work well together.

SEANA SMITH: That's interesting, Dan, because that means that Apple is basically placing itself in the crossfires once again, because we know, like you said, they're under antitrust scrutiny already for that 30% cut that they are taking from developers. So now that they have even more of a handle and even more control, I guess, over some practices that are happening in their App Store, then you would think that this would soon develop or soon become an antitrust concern.

DAN HOWLEY: Yeah, it really is odd for them to kind of take this stand. But look, they were doing this previously. When Microsoft was trying to roll out X Cloud a few weeks back, they made a similar stand.

This kind of eases the restrictions. But it doesn't really solve the actual problem. It kind of introduces new ones.

Facebook had a similar issue with streaming games through iOS and the App Store. And you know, they've both come out and said, look, we have problems with this. So I think moving forward, it just behooves Apple to be more amenable to these companies, rather than kind of be almost antagonistic to a degree.

SEANA SMITH: Well, Apple shares under a little bit of pressure today, closing off just around 1%. Dan Howley, thanks so much for joining us.