Apple has blocked Project xCloud on iOS.
Microsoft has abandoned testing the streaming service on Apple devices, and issued a strongly-worded statement criticising Apple's decision.
"The App Store was created to be a safe and trusted place for customers to discover and download apps, and a great business opportunity for all developers," Apple said.
"Before they go on our store, all apps are reviewed against the same set of guidelines that are intended to protect customers and provide a fair and level playing field to developers.
"Our customers enjoy great apps and games from millions of developers, and gaming services can absolutely launch on the App Store as long as they follow the same set of guidelines applicable to all developers, including submitting games individually for review, and appearing in charts and search.
"In addition to the App Store, developers can choose to reach all iPhone and iPad users over the web through Safari and other browsers on the App Store."
Microsoft, clearly, is upset at the decision. In a statement issued to The Verge, the company bemoaned Apple's policy.
"Our testing period for the Project xCloud preview app for iOS has expired," Microsoft said. "Unfortunately, we do not have a path to bring our vision of cloud gaming with Xbox Game Pass Ultimate to gamers on iOS via the Apple App Store. Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass. And it consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content.
"All games available in the Xbox Game Pass catalog are rated for content by independent industry ratings bodies such as the ESRB and regional equivalents. We are committed to finding a path to bring cloud gaming with Xbox Game Pass Ultimate to the iOS platform. We believe that the customer should be at the heart of the gaming experience and gamers tell us they want to play, connect and share anywhere, no matter where they are. We agree."
Microsoft has an ally in this: Epic boss Tim Sweeney, who took to Twitter to declare: "Apple has outlawed the metaverse."
"The principle they state, taken literally, would rule out all cross-platform ecosystems and games with user created modes: not just xCloud, Stadia, and GeForce NOW, but also Fortnite, Minecraft, and Roblox," Sweeney said.
It's perhaps no surprise to see Sweeney come out swinging against Apple - he's been a vocal critic of the company and what he calls "their 30 per cent taxes". Apple - like other digital platforms - takes a 30 per cent cut of sales on the App Store - and the tech companies who are setting up their own subscription and streaming services do not like that at all.
The upshot is Project xCloud looks unlikely to launch on iOS any time soon, which is bad news for Apple device owners who were hoping to use the system. Android devices, however, will run Project xCloud.