Why does this logic fall down for Apple? Is it size? Is the argument different if it were Microsoft doing similar with XBox?

Well, Apple is part of a duopoly. Nintendo is not. It’s kind of silly to call somebody a monopolist when they only have a small percentage of market share. In fact, they aren’t even in the top three video game companies, and their hardware is just a reason to sell software. 85% of the revenue comes from first party games. Their revenue is less than 10% of the entire gaming industry. For some reason, people insist on thinking of them as a hardware company that also makes games, when the reality has been the reverse for decades.

There are a whole lot of ways to distribute a video game. Three major consoles. Computers. Things like the steam deck. Smart phones. You could ignore any one or two of them, and still have a great business. In fact, lots of companies do. A whole lot of people have access to more than one of these platforms. You could ignore anyone or two of these platforms, and still sell your product to most of the people in the market. It is a highly competitive environment. If you don’t like Nintendo’s policies, just sell on Xbox and PlayStation and steam. People do this. If an environment is competitive, then by definition, nobody has a monopoly or an unfair advantage.

The Earth has 8 billion people, most of whom have a smart phone, all of which are using one of two operating systems. Not many people have more than one. If Apple says your app cannot be in their App Store, half of humanity, cannot use your app. It is a much different scenario.