Soon you will be able to install PC games from Microsoft Store or Xbox Game Pass to any folder. The appropriate changes will be included to the upcoming update for Xbox for Windows. It is currently in testing.
This means that you will be able to access game files, install mods, and move games to other drives or folders without restriction. The new version will solve issues with installing games from Xbox Game Pass for PC, where players would run into issues with the Microsoft Store, the restricted WindowsApps folder, and the inability to control the location of installed games.
In addition, the updated Xbox app will include file verification and the ability to restore games from a backup copy. Other game launchers, such as Steam and Battle.net, allow to create and restore game backups for long, as well as check the integrity of files.
Microsoft has confirmed to The Verge that it plans to implement a more user-friendly experience for installing games on PCs from the Microsoft Store.
“With great PC games like Back 4 Blood, Age of Empires IV, Forza Horizon 5, and Halo Infinite on day one with Game Pass, we wanted to provide players with more options to customize their experience in the Xbox app,” says a Jason Beaumont, partner director of experiences at Xbox. “We’ll continue to share updates as we launch additional features.”
According to The Verge, the Xbox app update is currently being tested internally, and Microsoft didn't reveal these new features to the public yet. They are expected to become available to most users on December 8th, along with the launch of Halo Infinite multiplayer.
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About time. They should let us do that with any app as well, I really hate forced directories (You too Steam).