The reason, an Apple spokesperson said on Thursday, is because Apple isn't able to review each game that's available through Game Pass.
"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," an Apple spokesperson told Business Insider. "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."
Because Microsoft isn't submitting each game on its streaming service to Apple's review process, the app that enables access to those games is being blocked from publishing.
In response, Microsoft openly criticized Apple's policy.
"Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass," a statement sent to Business Insider on Thursday night said. "It consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content."
Beyond Microsoft's game streaming app, Google's Stadia game streaming app has faced similar issues with publishing on Apple's App Store. And just this week, Facebook was only able to publish its Facebook Gaming app on the App Store by outright removing the ability to play games within it.
Microsoft's statement highlighted that every game in the Xbox Game Pass library is rated by one of several video game rating bodies, including the ESRB in the US, PEGI in Europe, and CERO in Japan — the video game industry equivalent of the film industry's MPAA.
No surprise to see Apple doing something like this. Their reasoning for blocking game streaming could hardly be any less legitimate.