@randomnine: Solid point on the pedestal comment. In the words of Charles Barkley "I'm not a role model... just because I dunk a basketball doesn't mean I should raise your kids. Your parents are role models."

XBLA, you're right on the money in regards to very few if any fully original titles been released, most of the games on XBLA are ports or remakes of other releases. Though I think there are a bunch in development now that are in high enough profile to make XBLA look real appealing to the Indie scene. Castle Crashers, being amongst them (really excited to play that one).
The thing that I'm interested in seeing what pans out is *if* this rumor is true, and business is lost for M$ to the PSN, would there be a drop in regulations on XBLA? There could be a back and forth of policy changing..."PSN is getting our market! Drop our prices!"..."M$ is getting our business, increase our support!!" Interesting times for sure.

@Garo: Profile trolling ftw! You're right, you're not dumb. You were just ignorant. Totally different. Ignorance can be cured, stupidity can't. And now you know, and knowing is half the battle. GEEEE-IIIII-JOOOOOOOOOE!!!! What do you want me to say, sorry? I'm sorry. I'm sorry that I try to educate the public from the viewpoint from people that actually make games instead of just playing, complaining, raving about them. We're not gods, we're normal dudes that play games, have opinions and experiences, that read your lame-ass asinine uninformed comments and feel that we have to justify, defend and explain our passion for this medium. We are fanboys as well. I don't hate fanboys, I hate ignorance. Does it make me sound more credible? Nope, it just makes me sound snarky and condescending. Hey no one's perfect...how about I work on my snarkizms, and you work on your ignorance, and we'll meet half way with a hand-shake and a "how-do-ya-do". :)

opt2not

it's the new XNA deal. I hope the know what they are doing. Nintendo's system is already getting +100 projects before they service is released...

VakeroRokero

So they don't even have the balls to just come out and admit they're fucking over the indie developers?

Coldbrand

For goodness sake, this is all just rumours and hearsay - and even if it were true, do you actually believe that 70% (or anything even remotely close to that figure) is in any way economically sound? Even Valve caps it at, what, 50%?

PSN might have a different and more lenient model, but it has yet to be proven that it will be even half as successful as XBLA in bringing out many different and smaller-scale games (though this could indeed change, but right now everything is just pure speculation). Potential is just that, potential, but the realisation of said potential is quite another beast altogether...

mexxxant

@Akin: ROFL

Irenicus-the one and only

I'm assuming the rumor is true. I know MS wants to start taking more from full-fledged developers... and I wouldn't be surprised if they wanted even more from XNA devs.

RemyDuvalle

this is what happens when you have a monopoly on all downloaded games for the system. the dev would be better of making for the PC, even though less people would be buying. I somehow doubt digital distribution systems on the PC (like steam) take 65% of the money.

something related a friend of mine just told me:
friend: In Bioshock, there are only two different types of vending machines, and they're probably owned by the same company.
friend: This, of course, is because of Libertarianism!
Friend: The company that owns the vending machines probably bought out or drove all the other companies out of business, and then to further cut costs they don't even hire people anymore, they just jam all their stuff into vending machines and charge crazy-high prices for everything.
Friend: and Ryan, being a Libertarian, figured this is a good thing and didn't bother to regulate the market at all.
Friend: END RESULT: you can barely afford a medkit whenever you need one, and you end up practically broke after every time you use a vending machine!

Akin

@randomnine: Don't worry, I took the pedestal down into the basement, it will stay there for now ;)

Irenicus-the one and only

@Garo: @Irenicus-the one and only: Most developers you hear from in the news are high-profile project leads with something to sell, adopting a diplomatic tone because the careers of tens or hundreds of people they're working with might be affected by any negative impression people get of them and - by association - their product. Remember, they're one in a hundred or less.

Most of the rest of us are gamers like anyone else and still enjoy talking shit on games sites. No-one knows who we are, so no-one cares what we say. So it doesn't matter! Chill out and stop putting developers on a pedestal, we don't deserve it :)

@opt2not: Steering clear of NDAs... Everyday Shooter demonstrates both that: (a) Sony are looking out for tiny indie developers with interesting projects, and have actually put their money where their mouth is. Though XNA is promising, I don't recall Microsoft putting a game to market through it yet; (b) porting a small game to the PS3 is not such a fantastically onerous task (reportedly Jonathan Mak had ES running on the PS3 three days after receiving a devkit). Theoretically, retail games have to push the PS3 to its limits to compete, so they need to deal with its foibles... a simpler game can dodge much of the complexity purely by ignoring most of the more complex facilities available.

Now, I think XBLA is great service. Still, you can't deny that Microsoft have let its appeal to hardcore gamers slide somewhat with the flood of ports and casual titles since launch (though I'll give them credit for Rez HD!). Sony run an attractive alternative. They are specifically funding innovative projects that keeps things interesting, and that is already making PSN more engaging to the typical audience for arthouse-ish indie games - and thus also, in turn, to the indie developers that make them.

They're both real contenders for developer attention at the moment. We'll see if XNA will change the game when it eventually launches, and if Nintendo's WiiWare can hold its own when it enters the ring. It's an exciting time, and any serious change like this could alter the course of indie console gaming over the next five years.

I bet people who have XNA projects underway but unsigned are feeling a little burned by the bait-and-switch. Not that Microsoft ever publicised the previous royalty rates... but they never indicated they were subject to change, either.

randomnine

@opt2not:

Wait Mr. "I am a games-developer vistiting this blog to show you how superior I am" you can call me a fanboy, Xbot or Playslave or... well whatever your "creative" mind makes up.
You can say that Jade sucks at her job!
You can say that you encounter the worst types of gaming scum while you are playing NHL'08.

But what you can't call me is "dumb"...
or do you think that somethink like this makes you sound more credible?

Garo

@opt2not: So Sony is more evil now? :) Well where do you work at though? And if you can tell me, what game?

Irenicus-the one and only

@Irenicus-the one and only: Heh, nah I hate M$. But like I said, lesser of the evils to make games for.

opt2not

@Manny: If that were the case, then the quoted developers who were considering moving to PSN because of these cuts would be making a pretty dumb move...

Tzepish

@TheHun: Some will accept the 35%, but it means that we won't see single-person dev teams putting out good games. They won't be able to afford it. Like I said, if they want to be the next PopCap and make a meager bit of change, they'er well on their way. They've just previously claimed it to be much more than that. And if they stuck with that original vision, they wouldn't just make "some" money, they would rake it in faster than they could count.

And you're right, Microsoft does bring more traffic from more customers. That entitles them to 10%. It's called a Finder's Fee. If you hook up a seller with a customer, you get 10%, that's just standard. Standard in terms of ethics, not standard in terms of business or law obviously. If you ask for any more, you're being greedy and taking more than you deserve and, in this case, you'll hurt your own market.

@7ucky: Yes, I am talking of PopCap in their capacity in which they publish their own games and distribute them online. Like RealArcade and places like that that provide a place to find and buy small games on the net. They're not losing money, really, so it's not totally ridiculous to copycat their model I guess. But the alternative they have, leaving the 70% cut in place for XBLA and duplicating it on the XNA side, would turn them from a ho-hum business move into an unbelievable phenomenon. It would be more fantastically successful than their wildest dreams. The Xbox division of Microsoft would start turning more profit than the Windows division within a couple years. This will not happen if they do not make it possible for developers to develop a title in their bedroom and then rake in enough cash to quit their job.

BTW if anyone thinks I'm a Sony fanboy, keep dreaming. I own all the consoles and I'd like to see them all succeed. Microsoft got me absolutely excited when they coined the term "YouTube of Gaming". I tried like hell to get a copy of that speech Moore gave but the conference people wouldn't release it. I am well aware of just how hellish the PS3 is to develop for, I've read a great deal about it. I'm also aware that it costs an arm and a leg to develop for too. The XNA Game Studio toolkit is marvelous and, even if Microsoft destroys the market with a move like this, it will have been a good thing for the gaming community after all. I'm sure it will lead lots of gamers into the realm of being authors and probably even trick a few into going into the game development industry where they'll be destroyed as a human being and pump out more licensed sequel crap.

otakucode

@opt2not: So where do you work at? Microsoft Game Studios? ;) I hear you.

Irenicus-the one and only

True, 35% is better than a lot of what other indie prospects would get. But here's the problem I have with what's happening here:

XNA requires the developer to use Microsoft tools: Visual Studio, C# programming language, XNA Game Studio, Windows OS, etc. I'm presuming (correct me if I'm wrong) that before you can publish an XNA game, you have to buy the full versions of these softwares from Microsoft. They already get money this way, and there is little or no support for open-source alternatives.

A hobbyist or fledgeling developer will have to throw down mad cash before they can publish their first game, after which they may have a game that no one will want to pay for. If Microsoft wasn't so strict about developers using only Microsoft products, I wouldn't mind the royalty cut. But now it just seems like they're trying to gouge the developer.

"Gouge the Developer." That does seem to be the Microsoft modus operandi.

Highlander Wolf

@Irenicus-the one and only: Ha ha, yet I'm not worried that a few of my anonymous comments on Kotaku would be enough to destroy the whole game-market. "oh my god, he pointed out my ignorance, I'll never buy another video game again!!". If you read my original post, it was more about the differences of developing on XBLA vs. the rest, and my disagreement with the "anonymous developers considering to switch to PSN". Clearly I don't have enough work to do.

opt2not

@chiefpoopingpants: Don't worry, the PC gaming alliance will show up and save the day ;)

Irenicus-the one and only

If they don't flat out deny it then there is some truth it. Way to go MS, you don't have a monopoly yet on gaming so way to ruin your chances.

chiefpoopingpants

I'd be interested in knowing what Sony gives their Indie devs, along with the amount of support they provide compared to MS. I'd say the % of revenue can't be much different then the 35% and that they might not get the same level of support. Anyone who's working on games for either company should give us some info on these types of things.

Darkest Daze

@opt2not: Exactly, for a living, not so smart to piss on everything you ain't working at for the moment. Or am I wrong?

Irenicus-the one and only

@mx5: If you are a developer then you must be Denis Dyack ;) Sorry but unless you can give me a name to put with credits I call BS. And if you are a dev thats cool, we need more fanboy devs out there for real...

Irenicus-the one and only

@NotZed: Not all developers make their decisions based only on contractual profit. There are a plethora of factors associated with signing contracts with n publishers.

@Garo: What's funny is how fanboys actually adapted negative connotations toward the word Fanboy. What's wrong with being a fanboy? You like our games, we like your attention. No hate here.

The thing that bugs me is the ignorance that is sometimes associated with fan-boy-isms, just because a game or feature isn't on your favorite console or in your favorite IP doesn't mean you need to speak out about it, nor dismiss every outside of it. Nor do you need to comment on things that you clearly don't know the intricacies of.

Oh and btw, game devs are gamers like you, we just make the games for a living.

opt2not

@mx5:
Yeah sure dude, whatever.
Like I said before... veeeeery professional :/

Garo

So these developers have made a platform choice based on a specific royalty level. They have made business and financial investments, and learned tools and technologies that tie them to that platform.

Now that platform will not be as profitable as it as when they made those decisions. Also there is this 'democratisation' process going on which just seems to mean that more developers will be able to make more stuff more cheaply - which will lessen the value of the platform even further. By flooding it with crap that has to filter to the top I presume (is that the democracy bit?).

I would say plenty of them have a good reason to be pissed off about it.

It hardly seems a wise business move as PSN is becoming more of a competitor as the numbers grow, and WiiWare just around the corner. It's not like XBLA is the only small-game service out there (though ms may think that - they think strange things), and the technology isn't that much of a tie in that people can't change fairly cheaply.

NotZed

Garo: it is fun watching the fanbois fighting each other :) ... eating popcorn and reading while waiting for the compiler to finish ...

mx5

@mx5:
Oh another developer?
You guys are so funny, it's so professional to go to a gamerblog and call other people fanboys?! No wonder the industry is so fucked up.

Garo

@otakucode: I don't really understand what you're saying because PopCap is a developer and not a publisher (aside from repping their subsidiaries Retro64 and SpinTop).

Or are you referring to PopCap as distribution portal? Can you clarify what you mean? (Sorry - I'm just trying to better understand what you're trying to say).

7ucky

@opt2not:

1. As you already said: why should he/she move away from the obviously easy to program XBL if he/she wouldn't get a better deal from the other console makers?

Well my friend you are on the Web nobody knows who you are and what you do.
You can't breach the NDA if nobody knows who you are.
So, how are the royalties on PSN? Come on, don't be so shy!

2. For a developer (what you are trying to make us think you are) you have a very unprofessional and rude approach, you're proving this with how you adress me: dummy dumb.

Garo

@opt2not: As a developer I totally agree with you. Yeah, Microsoft are evil but one has to hate himself to switch from XBL to PSN. Sony and PSN suck in develpers support big time. People now will bitch about royalties being cut but noone will migrate to PSN ...
P.S. And it is true that most of the people in this threads are Sony fanbois who have never touched a 360 devkit and a PS3 devkit and realised how the latter one sucks big time ...

mx5

@Garo: I'd be interested in finding out who this dev is and whether he/she's actually found out whether or not Sony would indeed give them a better price.
From the article:
"At least one developer I spoke with said they were considering moving over to Sony and its Playstation Network in light of the cuts."

This statement doesn't actually say they are getting a better deal with Sony's PSN, in fact it seems to have been said in sheer propagandistic spite if anything.
Like I posted, my main point is the ease of development and support advocating. I'm not willing to submit any details of contracts or potential contracts of our company to a game rumor/news site. That is a breach of our NDA's (Non-Disclosure-Agreement).

2. Guess what an Xbox is? It's a glorified PC dummy-dumb! Guess how closely PC development and Xbox development is? It's like having a twin sibling, their personalities are the different but to the average developer they look the same. :)

opt2not

@romBox:
Well, they have put indie game devs in a tough spot. Many people bought into the 360 platform because they could get games that would otherwise never see the light of day. They do have the most robust DLC marketplace right now. People buy the Wii if they want to get their retro game on, and I don't think anyone buys the PS3 just to get DLC (though I could be wrong). Right now, though, the Wii is staged to pass the 360 in total console sales, and the PS3 has pulled off a miracle and managed to survive in spite of Sony's disasterous combo of overpricing the console just to push their HD format and marketing the thing in every possible way they could think of that would be virtually guaranteed to _not_ convince people to buy it. If Nintendo picks up the ball and offers new DLC, they'd have to start kicking babies or something to lose this generation. If they don't, and Sony does, what with Microsoft's continued seeming inability to get their hardware issues straightened out, we could be looking at a day when the PS3 even manages to overtake the 360. Losing out to the Wii is just something they couldn't account for up front, but if, after all the goofy mistakes that have been made this generation, they manage to hand over the middle spot to Sony on a silver platter, it'll be hard to take them seriously as a console manufacturer anymore.

Purple Dave

@otakucode: But the alternative places do not provide nearly as much traffic of paying customers.
Who gets to decide how much MS deserves anyways? is it the gamers? the developers? or perhaps the one with the power to do so (hint MS)?
I've heard "a product is worth as much as the customer is willing to pay." if it is worth it for the developers to pay a certain % in royalties then they will, otherwise they can head to PSN or the internet. My guess is they will accept that 35%

TheHun

@opt2not:

1st.
Actually a dev has already said that PSN offers better royalties (check the article)
But if you know how much you get from Sony or Nintendo why don't you enlighten us all?

2nd.
For an indie the best way to go would be the PC!
Nobody tells you what you are allowed to do and what not.
You get the best royalties possible with one negative side effect: piracy!

Garo

From previous article: "At least one developer I spoke with said they were considering moving over to Sony and its Playstation Network in light of the cuts."

Given that the few of you who actually know the ins and outs of game development, why would it make sense for an indie developer to say this? is it just a case of FUD since only one has said this?

Tepoz

I've got to confess, although I felt a pang of anger toward the reduction of royalties, in reality I know next to nothing about this stuff. Why am I getting miffed at something I know nothing about? I feel dirty, like a Congressman investigating steroids in baseball.

Islandkiwi

Funny how most of the negative commenter's on this page have never made a game, nor knows exactly what goes into game contracts regarding royalties and IP holdings. Sure M$ is the evil empire of gaming, but they're nothing compared to the strict BS that Sony and Nintendo uphold to third party/indie developers.
In terms of development support, Sony is completely incompetent, if you can even get a dev kit within a reasonable time frame, developing on it is completely ridiculous. Ask any Coder out there, and see what they prefer: Playstation coding vs. (windows based) 360 coding? Nintendo (enter fan-boy backlash) has such strict policies towards content, its so hard to put anything into a game that doesn't cater to their adolescent market, as well as a negative outlook on any developer based out of North America, that it makes developers squeamish towards working with them. Microsoft in all it's faults at least has less of a grip on the creative reigns, which gives more opportunity to indie and small market devs. Clearly Nintendo is not interested in the smaller development companies (indie or homebrew), and I haven't seen any proof that this will change anytime soon.
I hate M$ as much as the next man, but in terms of XBLA vs. PSN, vs. WiiWare development, quite honestly XBLA is the lesser of all evils. Their availability and dev-support is light-years ahead of the others, as well as the ease of developing on a windows-based platform. Sure cutting royalties sucks, if it's true, but coming from a developer that is actually passionate about making games rather than selling out the highest bidder , I'd rather take the path of less headache/frustration/incompetence/geographic prejudice for a pay cut. The only decent royalties given to Sony or Nintendo products are to 1st party devs, which means that cuts out 95% of the indie game companies, as well as community (homebrew) attention. You'd be naive to think that Sony or Nintendo would give you better royalty agreements to non-1st party devs.

opt2not

@TheHun: That's not true... they would be able to charge for content. You can find places online to easily charge for content that take only 1 or 2% of the transaction for processing fees. For their service of bringing customers to your product, the standard that you get is 10%. That's a finder's fee. It's been around for a millenium. Microsoft does do more than that, however. They provide aggregation and community features (or at least they claim they are going to). That's worth a few more %. Bandwidth and disk space are both commodities and don't warrant any more %. They maybe get docked a few because their platform is unstable. I don't see where they think they deserve 65%. They are expending absolutely no creative energy. They developed a framework and put it out there and now they need content to fill it or their investment will be wasted.

Retail stores ARE dead. They just don't know it yet.

otakucode

@Tepoz: All games on Xbox use XNA. XNA GSE Framework however is specific to Microsoft's initiative. Because it's a framework, you can use it to make windows games, Creator's Club games, and XBLA games... or even port them over to the full XNA Framework to make full retail disc games. The thing is that most retail games and some XBLA games require more horse power from the hardware and/or require integration with middle-ware that is simply not available (yet) through GSE. These, at the end of the day, are just tools. XBLA has always been Indie-friendly... this news, even if true, does not change that. GSE initiative on the other hand is here to make indie even more accessible and it does.

okenny :)

@okenny :):

And what do your comments sound like? Good ol MS defense no? Honestly, the fact that they didn't outright deny something like this, and the fact that Crecente has multiple sources that are backing up don't lead you to believe that this is likely true? I mean you're showing your bias if you don't even feel suspicious of this. Will it ever get fully confirmed? Microsoft won't ever admit it, so we have to take the word of thse multiple sources.

You have to ask yourself, are these people independently lying to Crecente. What reason would they have to lie? Why would they all give the 35% figure?

LittleBigPlaneteer

@Manny: Do you believe that XNA developers will get a higher share of their sale price than XBLA games do? Remember that those companies putting out XBLA games paid several thousand dollars for a development kit.

@7ucky: Well it's like I said... if they want their service to become just another PopCap and make a little bit of money, they're getting right in line for it. If they want to make a LOT of money and improve the market and even the world a little bit, they're going exactly the wrong way... and that makes me very sad.

otakucode

@otakucode: "The things Microsoft does are nearly worthless." I would disagree They do supply the prime virtual real estate: the XBL Marketplace. That itself is worth a lot, because without it they would not be able to charge for their content.
As you pointed out, in ways this is very similar to the music industry, and things are turning around there with more and more musician's going indie, but the big labels are still needed to sell and promote(on a retail level). Here MS does the promotion by selling Xbox's and provides the retail through the marketplace.
Also if "Distribution is dead" then this should be the big wake-up call for developers to spring free! But they wont, because they will still make more money with MS. Distribution is about as dead as the retail stores are.

TheHun

People are complaining that the response is too vague yet are running to the gallows with Microsoft when the first rumor was posted and still are. This sounds more like good'ol M$ hate to me... carry on.

okenny :)

I think we're all getting confused on XNA and XBLA because isn't XNA supposed to be used to create XBLA games? For right now, XBLA really isn't the indie scene as it's dominated by major players from the mobile market. Was XNA supposed to change that?

Tepoz

Think this is bad? The music industry doles out 13% to their artists for digital downloads. Apple recently was fighting for 4%... FOUR PERCENT. I'm not saying MS is right or not because of this, but it's obvious if you want any taste from a big corporation to peddle your wares, it's going to be a small one.

Killtacular

@otakucode: XNA community games and XBLA games are 2 different things.

Manny

@otakucode: The only reason I think 35% might make sense (other than being average or standard in the casual/arcade games industry) is because MS is also providing a platform for development.

Right now there are indie devs all over the world who are getting that rate for casual PC games, but they [usually] also have to invest $$ into developing a lot of their games from the ground up.

What puts me off, though, is one thing: doesn't MS charge devs to use XNA? It seems like charging for access AND offering lower royalties is a low blow, but I don't see problems with either in a standalone scenario.

7ucky

@Tiber: I don't really know how retail is divvied up, so I can only speak to digital distribution. It's standard in the casual/arcade space (which is the current DD model) for royalty rates to be in the 30s percentile-wise.

7ucky

@cheeba: nice opening statement, where did you learn that line, at a fanboy annoymous meeting? get over yourself.

their response was vague at best. which leaves the topic open for discussion for this site and its members. i think that is a very basic principle. i don't need to know insider info on the industry to make that conclusion. hop off of MS nutsack dude.

zanzibarlegend

@vanderblade: Valve? Nope. They bend over and take it from retailers all the time. Steam could be astonishingly awesome, but their concessions to retailers ensure that it's nothing special.

@7ucky: Sure 35% if pretty common. And if Microsoft wants to be common, I guess they can roll with it. It'll end up being a flop like all the other independent game services out there, a place where gaming companies instead of creative individuals go and every once in awhil esomething decent comes out. If they want to make a couple million a year off of XNA instead of a couple billion, I suppose it is their choice. An epic-grade of stupid choice, but theirs to make.

@balls187: I'm betting that is Microsoft's thought process. They know that an indie title trying to make money online by itself is essentially a hopeless effort. It's like winning the lottery except a lot more work and less reward. That is irrelevant to the fact that Microsoft won't make nearly as much money giving a measly 35%. Look at something like RealArcade or PopCap. Small companies. Sure, they make money. But not much. If that is what MS wants XNA to be, then 35% is right up that alley.

@zPhreak: The things Microsoft does are nearly worthless. They host the content and distribute it. That's nearly worhtless. Distribution is dead. The music companies are starting to figure this out and the game distributing companies need to figure it out too. Anyone can send some bits. No big deal. What Microsoft provides that is valuable is the push-button purchase experience and the aggregation of content into one place. THAT is valuable. But it is not so valuable that customers are going to pay $20 for games that ought to be $5. And developers are going to have to charge $20 for those $5 games so that they can eat.

High percentage going to developers = lower prices = higher sales = higher repeat customers = fanbases developing for developers which sells even MORE games... all of it leads to more profit for Microsoft... but they're moving to set a nuclear bomb off right under it all.

@Manny: Steam and PSN are not holding themselves up as the YouTube of Gaming, and are not meant for small developers. They are both meant for well-established developers who can drop $50,000 to develop and float a title. It's an entirely different market than MS claims XNA was meant to address.

Err, sorry for the length... I am loquatious.

otakucode

Wow, that response is delightful. Imagine, that PR hack went to college and spent money on a degree to learn how to so artfully craft words that say absolutely nothing. I can't even classify this as a PR dodge as it never actually addressed the issue at hand. This is a dismissal by refusing to recognize the question.

xDiscoStu

@Kaneda: I said, and I quote, "I *do* think a company *should* pay for talent..."

So really, what's your issue again?

Killtacular

dont you think they would deny this if it wasnt true? wouldnt that be the right thing to do considering PR? i think the rumour is true.

LeBaron

Is it just me, or does the controller on the right side of the XBLA logo look like a buzzard/vulture/condor?

SaintWaldo

I think Microsoft wants to be the next US political party! At least their talk is straight politics talk, talk talk and nothing said.

FelicioLostHorizonPT

@Ehardergardens: That idea you put forth, of developers who want exposure more than cash, doesn't exist. The idea of making a living by developing games that people like and being rewarded handsomely is MUCH different from the idea of getting a job in the games industry where you will be abused, overworked, underpaid, unappreciated, forced to work on sequels and licensed properties, etc. Nobody WANTS that job. They'd much rather develop games people really enjoy to play with unique characters and novel gameplay elements.

Microsoft has the resources to make that a possibility. Previously it might have been argued that Microsoft could think that striking a balance where middle-sized development companies with a few hundred developers could offer a game would be the right way to go... but this is 2008. It is abundantly clear to anyone not intentionally closing their eyes to it that the creative community on the Internet is legion. When given the opportunity and a LOW BAR TO ENTRY with potential for high rewards, the viral popularity of a service can become monumental.

The only explanation for Microsoft not wanting to move to become a YouTube of gaming with community-driven efforts is pure malice. They want more to hurt gamers and creative people than they want to make money. Because that's the end result they are acting to pbring about - protection of the status quo at the cost of less profit for themselves.

otakucode

seems to me like it is a confirmed cut. Only time will tell if it has any significant effect on the developer base.

Oh and for those of you who moan and bitch about MS shooting themselves in the foot, where are the developers going to go? PSN (maybe if their rates are in fact better ), internet (see balls187's comment). xbl is still attractive, it just might not be the gold mine it once was.

TheHun

I guess I have to stay tuned in.

Irenicus-the one and only

Well, duh... with sales on the wane, who else is gonna pay for that $1 billion PLUS allocated toward RROD consoles?

The witless consumers have already been gouged to death, so now it's time to pass on the cost to the developers.

TheFaze

@vanderblade: I thought so :p. I kid of course, it was just such an obvious setup I couldn't resist. And one or two intelligent comments aside, looks like they didn't let me down.

People really shouldn't be so self-righteous when they have no frame of reference. Yeah, cutting rates in half sounds bad, but 35 percent's still a fairly standard rate. As mentioned in the last topic, the old 70% rate smacks of a subsidy to get early interest drummed up with indie developers.

You can argue about the minimal costs of digital distribution all you like, but try asking Realarcade (or any other casual games portal) for a 70% cut and see if that gets you anywhere other than laughed off the site. It sucks, but when you're dealing with game publishing, the idea of the dev getting a fair cut goes out the window, regardless who you're working with. If Sony or Nintendo offer significantly better rates, I'd be very surprised.

Couldn've done without the garbage PR speak from MS, but that stuff seems to be rife with everyone these days. Doesn't make it any less excusable, but short of a mass PR suicide (finger crossed, people!) looks like we're stuck with it.

cheeba

Read: Our response is we have no response.

Yes, in Steve Bailmer logic this makes perfect sense.

After all, they value developers three times as much as anyone else (again, ask bailmer

huginn - No I will not give you a hug!

The biggest problem here is that 70% was a very attractive rate for small developers and when something that large gets cut to 35% (which by MS not denying it is basically a confirmation) then it's a blow to the developers. A lot of these small studios are making games for XBLA because they realized they could make quality titles and make money as well. But if a game with a decent sized team takes a year to make and that team only gets 35% back, then their INCOME isn't doing anything. The other factor you have to look at is if a company is being self funded. If they are, and they get 35% off of a $10 game where it took a year to develop and a budget of $250,000 (you have to factor in salaries and development costs that a lot of people don't realize developers have to pay for, and this would be for a small 4-5 person team making lower than industry standard) then that game has to sell around 70k units to break even. We can all look at the estimated sales and show that not all games are selling in that range. Plus that studio has to survive until they get the royalties and be able to fund their studio for a next game...which in my eyes is why a developer might be considering PSN as well and the possibility of not being self funded.

AwShucks

@romBox: If MS wants to shoot themselves in the foot- I say let them.

Yep. What sucks is that seems to be exactly what they are doing.

Too bad, since it seems to be more MS screwing up than Sony doing stuff right that is causing this very obvious momentum change that has been going on the last couple of months.

KaneRobot

I suspect that there is a cut pending. I doubt Microsoft will cut it in a way that will make it more profitable to be on another platform because that's not wise. I guess this just gets to the heart of the matter of whether fans are armed with enough information to be outraged about what happens on the business end of the games industry. I'll let you all know right now, the business end is uglier then you all can imagine. Listen to some of the old gamasutra podcasts and some indie outlet boards... this isn't new nor pretty. I think it's nice that fans are willing to support indie developers but we shouldn't react without facts.

okenny :)

@rebelphoenix: Why should it be 50% each? Are you just taking the number of parties in the transaction and dividing equally?

teeth7

That sounded awfully long for "We're not going to tell you." But if it were false they would've said no.
@7ucky:
I saw that in the other thread too. Is that for a standard game like you'd see at Best Buy? Because the publisher relation is different for that. In a typical relationship, I believe the publisher funds the development, prints the CDs, advertises, and distributes. In this relationship, Microsoft only needs to distribute (which is just bandwidth) and possibly advertise (on channels they already own).

Tiber

Well.

It's Microsoft.

If there's one thing they're good at, it's monetizing software, and despite all the money spent repairing shoddy hardware and providing ad overload, they know they can make it back selling code. It's really just their business model at work.

Datheron

@HurricaneDave:

Heh, they have to pay for the RROD somehow...

Andy D.

Would that be even legal?
Well, I think I'll just give up making my final project on Game Development on XNA for X-Box...

Bokusatsu_Tenshi

So basically they admit confirming no denying that the royalties have in fact not officially been un-halved.

That's just crystal.

Twisk

Sounds like propaganda from this secret "well-sourced RUMOR" against Microsoft.

maniacmayhem

Doesn't seem like a very wise business move to me. Not something that they should be doing with the PS3 gaining on them.

If this turns out to be true I expect alot less indie developers to make games for the Xbox brand. If they can do the same thing and get paid better elsewhere...they will.

Bones_Jackson

In the distance the crowd forms chanting PSN PSN PSN!!!

Gam3r

Can't they just make it 50/50? I mean hell all the people working on the game are doing just that WORKING on it. Why make it less than 50%?

rebelphoenix

You only need to look at the leadership in charge at microsoft to understand why things are going the way they are.

Better stock up on the chair-proof armor.

cactaur

MS is a company in business to make money, and make as much of a profit as possible. If this move is true and it drives away (valued) developers and it costs them money, than they will respond to this and possibly change it. A distributor/publisher does involve a lot of over head, though digital distribution is a bit different.
Because I suspect they will leverage the passion of budding game developers who want exposure more than cash percenategs, (much like the music industry), MS will leverage this exposure as their 'product' to these developers. This allows them to have the financial incentive to get behind this whole "youtube of games" thing and support it because it will be financially viable.

I don't particularly care for MS as a company as it relates to me the consumer, due to the reason they tend to do the least possible to satiate me as a consumer. They have far to conservative of a track record for me to want them to dominate any market (especially entertainment), but I think what they have done with XNA is pretty interesting and has helped things a great deal for developers and I'm glad they are competing in the game market. I don't want them to dominate though or even be in the lead. I like a separate but equal 3 way fight here as I'm happy with what each brings to the table. I personally find so far that being a pc/ps3/wii owner covers most everything I want, though.

Ehardergardens

Microsoft has the power and ability to destroy the industry like this, but it is a terrible idea. Not just terrible like a serial killer smothering a baby (which it is quite like), but terrible from a business standpoint too. If Microsoft continues with their 70% cut going to the developers, they will see a thriving market. If they cut it to 35%, the market will disappear. I know that Microsoft is confident that they are invincible and that everyone is forced to worship at their feet, but they're wrong. They do still need to worry about Nintendo, Sony, and even small unknowns who might launch their own platform specifically for small developers.

There are multitudes of very creative people out there and a huge market of people wanting to experience whaty they have to offer. All they need is someone to provide the boring platform background. Yes, that platform is valuable, but cutting the developers to the bone for it is a terrible business decision.

Microsoft's Windows platform got huge because of developers. They know this. It is part of their history. Now we're seeing that if they had the ability at the time to charge every single developer an astronomical amount to develop for their platform, they would have and Windows would have withered and failed. Microsoft is preparing to abort it's own gaming platform in this way. I suppose it is the logical extension of their complete lockdown of their platform, doing in hardware what the legal system denied Nintendo the ability to do legally in the 80s.

otakucode

@tei: Don't have to be idiots to make bad decisions. Just how things are this gen. :(

Saint Anima: Kotaku's Poetic Massacre

A rate for any contract isn't guaranteed until you sign on that dotted line. Indie Developers could be angry since every game previously was 70%, so it was always expected it to be 70%.

If we know how much the rates are on PSN and others then we can probably guess if the threat is more of a writers strike and not an all out abandoning.

Tepoz

Cutting the royalties make no sense to me. I doubt the rumor is true. Microsoft are not idiots!

tei

@zPhreak:

Seems simple to me that MS should allow the developer to find a host or host it themselves, either way let it be their decision on how much to spend for hosting. As for advertisements, I've never seen MS advertise any indy game and I'm sure if that was the case, the indy developer would rather persue their own avenue for advertisement.

I think you are giving MS too much the benefit of the doubt, plus what about the other stuff I posted. I guess the real key now is for Sony or Nintendo to capitalize off of this rumor and release their own royalty rates.

HurricaneDave

Answering the question by not answering the question. Typical Microsoft.

AnEternalEnigma

Pretty clear they mean yes they`re cutting the rates.

Morberis

guys just stop supporting their BS...it's all y'all need ta do

Rabid_Fanboy

Is it just me or are empty PR responses worse than not saying anything at all? It would be nice to see a company have the balls to say something like, "Since we host, market, and deliver your product and basically have a captured consumer base waiting for the developers goods, we decided that it's in our best interest to take a larger cut to support our infrastructure. Developers will still make a pretty penny even at 35% because our user base has grown greatly since the launch of XBLA."

Now I'm not a fan of big business but sadly, they are the ones that make the video game world go around and not everything has to be sugar coated. everyone wants to make money. Tell it like it is and I bet you wouldn't see as much of a negative reaction as you would expect.

I'm sure that some developers will move to other platforms because of this but as that platforms user base grows, don't be surprized if you see their pricing plans change as well.

Hagame

From my opinion, it's a case of read your contract before you sign it.

bluesquareapple

Thats always the answer to something like this,

"we work closely with all of our partners to provide the Xbox 360 community with the best entertainment possible while
(Between the lines it reads, We totally shafted Indie and dont give a shit, money money money money!)
making publishing a title on XBLA an attractive prospect."

Phenom88

@HurricaneDave: MS hosts the content, as well as advertises, support, etc for it. They even take care of a lot of the testing. 35% is way better than any indie will get with something like Popcap or those services.

zPhreak

I'd be interested in knowing exactly where dollars spent on arcade titles goes...

magic_envelope

Well they can always develop for the pc and make 100%.

But whats 100% of nothing...

Anyone?

Bueller?

balls187

Microsoft are vorlons now

Kyle81

@Dorphat the Insomniac: *that're... this is what I get for re-typing it three times.

Nevertheless, anyone have any insight on how much indy game devs traditionally make without using a service like PSN or XBL to springboard their software? (Yes, I guess that means indy PC games...)

Dorphat the Insomniac

That was more of an advertisement than a confirmation or denial - is it even possible for MS to put the spin on hold when they make a statement?

wild_world_girl

This is a pretty crappy rumour. We don't know how this compares to other markets like Steam or PSN for a start. 30% could still be 3x as much as PSN for all we know.

Manny

C'mon was this unexpected--when has Microsoft ever been shying about using market leverage?

Even legality is no barrier to them.

SSJPabs

/facepalm

Microsoft. Come on. Who the fuck wants to develop for a commercial platform when they don't get reasonably paid for it?

redgopher

Writer Strike! err... I mean Indie-Developer Strike!

Moosebox

I always thought that access to the market should be open, anyone should be able to push software to the Xbox Live market and anyone should be able to purchase, but that MS would be served better by just getting their cut from every transaction. Apparently, they want to charge the developers for access to the market, charge the customers for first access to buy the products, and then take a cut of the transaction.

Seems to me that MS is letting their greed cloud their long term status in the console market.

HurricaneDave

@cheeba: Aren't we clever today?

vanderblade

Like I said, I'm not defending Microsoft, but 35% is a pretty standard royalty rate in this space (and even higher than some!).

7ucky

Hopefully some Kotaku insiders will let us in on how much cut the PSN and Wii.

Tepoz

Yes, we're not commenting about supporting our independent developers that's going to float out console this year, BUT OH GOD - WE'RE AWESOME. LOVE US.

Dorphat the Insomniac

"blah blah blah"

Translation;

"YES, WE FUCKED THEM. WE FUCKED THEM RIGHT IN THEIR STUPID ASSES! HIGH FIVE"

They would've denied it if it wasn't true.

BlackDove

And here we go, another round of spectacularly ill-informed comments on the way. Brought to you by a bunch of clueless fanboys without the faintest idea how the industry works. Take it away, all...

cheeba

@romBox: Bingo! Bad move MSoft. And here I was thinking you were becoming a harbor for besieged indie developers.

Seriously, is there one game company beyond reproach?

Oh. Yeah. Valve.

vanderblade

@Killtacular: Humm... You're not sure companies should pay for talent? What should they be paying for then? I'm not sure I understand your logic. Also, I don't think it would be good for MS to have too many people turn away from their platform.

Kaneda

@Tylahedras:
Especially Microsoft marketing speech. The spin machine's at full tilt these days for all three companies though...it's pretty hard to be sure what's going on with any of 'em, especially here at GDC.

Archaotic

@Killtacular:

"they don't have to publish on the platform."

Exactly. Let MS charge what they want...then they can watch as they all flee from XBLA to PSN(or wherever). If MS wants to shoot themselves in the foot- I say let them.

romBox

Nextup Kotaku responds to the response of Microsoft responding in response to royalty cuts …

SchoolBusDriver

Sounds to me like, "Yes it's true, but we rock anyway."

Or possibly, "All your bases are belong to us."

I don't know marketing speech is tricky.

Tylahedras

Well that's... vague.

Danin

I do think a company should pay for talent, but then again, if someone's not happy with the rates, they don't have to publish on the platform.

Killtacular

As always, reality is a lot more complicated:
[www.gamesetwatch.com]

aka Bitter

@Garo: *sigh* Sometimes it feels like I am. ;)

Randomnine is right, working towards a degree in art or programming gives you the opportunity and structure to point you towards a portfolio to get "your foot in the door". But it's not a guarantee.
Some people can teach themselves, gain practice on their own time fueled by passion and self discipline, for that I commend them. I have little cousins that ask me what's the best way to get into the game industry, which schools to go to? For the most part I tell them to try to learn this stuff on your own first, teach yourself, if that fails then spend the time in school to get what you need. A LOT of schools that are teaching "gaming" are full of shit, and are a waste of time and money! You know what I mean, the "Institutes of Science that feature Gaming Curriculum's". The pay-us-20K for you to be ill-guided and tricked into thinking that you'd be guaranteed a job afterwards. Bleah. You could get more value out of spending that money on a kickass computer, and an internet connection. Use tutorials, read forums, "buy Teach yourself X" books.
Most studios value experience over "white pieces of paper that let them know you spent 4 years and a lot of money in school". Think about this this way, you have 2 applicants for the same position. Applicant A has a degree, fresh out of school. Applicant B has no degree, but has shipped or has already made a game...who do you think is less risky to hire?

opt2not

@otakucode: Still, the way this model differs from the traditional way of distributing physical copies is so radically different from before, and unlike the usual publisher, Microsoft has no need to try and influence the developers and their schedule: they can release the game when they please, it will never get buried under other games, be out of stock and it will always be available for purchase.

On the flipside, this also means that the servers have to be on 24/7, and there has to be enough bandwidth available so that even during the most user-heavy periods the customer can receive their purchase within minutes (at least I would be rather put off if I had to wait for a 50-100 meg game for over, say, half-an-hour).

Now, relying on potential ad-based profits, on an exponential increase of buyers, on a small percentage... it is all well and good in theory, but I can't see that having them be the cornerstones of the business would please any stockholders. Microsoft is a company first and foremost, and they want to make a profit. Plus, while Microsoft does have many deals with bandwidth-providers, that does not mean that the Xbox-division gets to access all of it (as Microsoft has many more important, bandwidth-intensive operations that have nothing to do with the Xbox). I'm sure you remember the problems Live had during the Christmas season?

This whole thing has been nothing but hearsay, and the 35% has not been confirmed. If it is true, then I do not agree that it is fair, but neither do I believe that 70% is necessary, though it is a very nice carrot. Even 60% would be very generous.

All in all, I hope that the percentage that the developers do get is fair, and that hopefully, as this kind of business model gets a little more established in the future, more small developers will get their chance in the spotlight. There is money in it for everyone, and maybe a few good and innovative games as well.

mexxxant

@Garo: "The finals"?

Studios are generally very pragmatic and care about talent, not credentials. Most places, for an artist, a strong portfolio will get you a job. Programmers can have a portfolio of completed projects too, in a way. The problem is, where do you get the time to build that portfolio?

A degree gives you time to practice and put together some work you can show. That's its real value. You can get that other ways - say, by working your ass off in your spare time for a year or two. It's been done.

Some studios do specifically value degrees, but many will take anyone who can prove their talent. I suspect most developers do have degrees, because game development *is* an advanced field... but if you do choose to pursue a career in gamedev you'll meet a good number who don't.

randomnine

@Toasticus:
Full Sail? Full Sail or anything similar is a last resort.
Every major developer want's people with a degree in computer science, fine arts or graphics design!
At least in EU and I don't believe it is any different in NA.
Go ahead and an take a look at
[www.gamesindustry.biz]

Garo

@Toasticus:
The point is without a degree you won't enter the finals! A degree will open you the doors! That's a fact, at least in Europe and I don't believe it's any different in NA :/
[www.gamecareerguide.com]

Garo

@mexxxant: Bandwidth is never free. That is true. But it is ridiculously cheap. Astonishingly cheap. Especially for people like Microsoft who have big deals with Akami and other large scale data distribution companies. And you can keep up the 70% rate forever. You will make such a ridiculous amount of money in quantity that the 30% you're getting will be billions of dollars.

It's not just minimizing leakage to move from 70% to 35%, it changes the market they're getting access to. At 70%, you get big companies, mid-sized companies, small companies, and individual developers. At 35%, you get big companies and mid-sized companies. You cut your market down to almost nothing.

How about looking at it this way... by cutting the royalty rate so harshly, even though they are getting it in line with the royalty rate other publishers use, they are making sure that it is more difficult for people to publish on their service. If less people publish on their service because it is difficult, they lose money. Microsoft doesn't have to only make money off of the royalties. I think they would be better served by investigating other revenue sources. For instance, if there are hundreds of developers getting involved (and there won't be at 35%) and a lot of them are individuals or very small teams instead of faceless corporations (again, not happening at 35%), fanbases really come into play. Games start selling because Dev X has a following. Where does that following gather? Forums, websites, etc. Microsoft could provide those sites. And advertise on them.

What'll happen though is MS will cut the rate, individual developers will continue working their day job and not providing content for them to sell, companies will, EA will buy up anyone who makes a few bucks, crush their soul, chain them to a desk and get them to work on the next Madden. Gaming will be much less colorful, and much less fun for it.

otakucode

the royalty ratio has been changed they told everyone months ago...way to go with timing kotaku...its only been since dec 07 that this changed.

35 - 45 % is the max you get now on royalties and the 45% is only if you go over a million units sold.

Tkat

@otakucode: 70% is still very high for any content provider, and you have to remember that bandwidth is never free: just how long can you hold that percentage up, especially since not every download necessarily means a sale?

Minimising extra leakage is only sound, especially since the Xbox has just now barely even begun to post a profit (or at least less losses), and I expect that Microsoft would at least like to have the next iteration of the Xbox to already be something that will really bring in revenue.

I'm not against profits for small companies, but if Microsoft would suddenly have to cut back on its Xbox Live Arcade distribution, marketing and whatnot, it would not be good for anyone, now would it?

mexxxant

@vanderblade:
"Seriously, is there one game company beyond reproach?

Oh. Yeah. Valve. "

Don't mean to burst your bubble there, but I seem to remember a bit of dodginess with some in game advertising added after a game's release to full paying customers. Not to say there isn't one, though! Just be careful before putting someone on such a pedestal. But keep looking, there ARE good companies out there.

PurpleSfinx

@opt2not: Haha, good show man. It's funny how people treat devs like some mythical creature that doesn't actually exist. Nuh uh! You're not a dev! Prove it! As if proving your identity over the internet is possible or even remotely a good idea.

@Garo: Do you really think that people give a shit about whether you have a degree when they want to hire you as a digital artist? I've seen graduates from Full Sail and SCAD that couldn't paint or model for shit, and I've also seen people on deviantArt who have no formal education make stuff that is just incredible. As a game artist, what matters the most is your artwork portfolio, because one can easily tell from that how good you would be at your job. Having a degree would just be a bonus, and a small one at that.

Toasticus

this is pathetic.

nevergod

@opt2not:

LOL what is your job if you have no degree?
Janitor?

Garo

@Garo: Wow. You think we have degrees? I'm stunned. Seriously, a whole new concept of humor has just opened up for me. The pedestal is so high...! I think I'm getting sick.

opt2not

@opt2not:

I am ignorant because I believe that Crecente has spoken to several developers who think PSN is now after the cut of XBLs royalties more interesting?

I am ignorant because I believe that the PC with its gazillion installbase, with more freedom to choose your project and with its easy accesibiltity is more interesting for every indie than anything consoles are offering at the moment?

Sure, whatever!
Go ahead roam the blog, call me names and be self-righteous.
If it makes you feel better?

@randomnine:

Off course devs are humans too, but the least I can expect from a person with a degree is to behave like a mature person and not like an internet troll.
Even the minor development members should adopt a diplomatic tone!
If they can't I don't see them working for very long in any team...
and that's no only in the gaming industry :/

Garo

its fact - it was even told to everyone by someone in the know at a particular seminar, who , and when i'm not saying.

thanks microsoft, thanks for trying to rip off more brave developers by pocketing more cash, depleting live of nothing by shitty, corporate developed cash ins, or half baked retro crap.

thanks for XNA too, now you can get wide eyed enthusiastic game developers put shit up for free, see nothing from it, and you guys can rake in more advertising revenure.

thanks a fucking lot, you've just cut out a choice, made the PS3 the go to console for indie talent.

gique

@otakucode: No goverment does not have to be involved for a monopoly to exist, you are incorrect, infact, sometimes goverments need to be involved to stop or prevent monopolies. You must have listened to the wrong party of this issue.

Irenicus-the one and only

@Akin: Problem with that theory: Libertarians wouldn't believe in the government protecting the company, so anyone could start up their own medkit business. Government has to be involved for a monopoly to exist.

@mexxxant: Of course 70% is economically sound. What does Microsoft have to do? Put a file on a server and push it over their lines. That borders on being free for them. They could get away with only charging a dollar per sale and still wallow in profit.

PSN might be cheaper, but the price of devkits is astronomical and there is no PC-based easily available development environment.

otakucode