Microsoft Is Looking To Reduce Its Xbox Store Cut From 30% To 12%

Microsoft Is Looking To Reduce Its Xbox Store Cut From 30% To 12%
Image: Microsoft

According to internal documents filed in the ongoing Epic Games vs Apple case, Microsoft has plans to reduce its cut on digital downloads on the Xbox console store from 30% to 12%.

Found in court documents, first spotted by The Verge, Microsoft shares various information and data about its digital storefronts on Windows 10 and Xbox.

In a section covering revenue shares, Microsoft lists the Windows Store cut changing from 30% to 12% sometime in 2021. This news was just announced last week by Microsoft. In that same section, Microsoft similarly says it plans to reduce its store cut on Xbox by the same amount also some time in 2021.

This reduction on console games hasn’t happened yet. These docs suggest Microsoft is (or was) planning to reduce the Xbox store cut this year. It’s also possible those plans have changed or been postponed.

Screenshot: Microsoft / Kotaku Screenshot: Microsoft / Kotaku

In a statement sent to The Verge, Microsoft downplayed the proposed plans found in the court docs, telling the site it has “…no plans to change the revenue share for console games at this time.”

If this change does happen, it would be a big deal. Currently, Nintendo, Microsoft, and Sony all take a 30% cut from digital game sales on their respective console stores.

Also found in those same documents are more details about the recently announced Windows Store cut reduction. It seems that in exchange for the lower cut on digital sales, Microsoft would get exclusive streaming rights to the game. The Verge reports that Micorosoft refused to comment about this part of the document so it’s unknown if this streaming clause is still hanging around.

Comments

  • I could see MS doing this with Xbox. With game pass being the big money maker for them this wouldn’t impact that.

    Be interesting to see how many people just have game pass and never buy a game for the system.

  • I’m loving watching all these monopolists scrambling to protect some semblance of their effort free profits. Good job Epic.

    • So the costs to recoup hardware sale losses and maintain infrastructure into perpetuity to maintain access to a once off purchased title is monopolistic? Well I guess it is if you proscribe to the Apple/Nintendo/Sony approach of shuttering infrastructure and removing access after a set time.

      • Dude, your argument lost, time to give up.

        Once upon a time you and I might have had some kind of genuine back and forth about whether 30% is really a reasonable take in exchange for a web programmer, some bandwidth costs and a payment front end. Since then storefront after storefront after storefront have all accepted that, actually, 12% is a perfectly fine cut from which to still extract their monopoly profits.

        I mean, nobody is forcing anything here. Epic has yet to win a single case, and may never. Dropping the percentage cut is nothing other than a simple marketing expense at this point.

        Sure, most consoles are sold at some kind of a loss but it’s nowhere near what it was a decade ago, well under $100 a console if not mostly closer to break-even, and this is easily made back from subscriptions and licensing fees in the first year. People don’t buy a console just to display it on their mantelpiece; as long as it’s getting used odds are someone is still making money.

        And dude, what do you think happens with that 30% cut? Are you seriously suggesting that it’s put into some kind of trust fund to maintain access to a console into perpetuity once people stuff buying shit for it? Seriously?

        Perhaps Apple, Nintendo and Sony should set up a Patreon to stop themselves from going bankrupt, eh? I’m sure you’ll be happy to help them out, amirite?

        • If Epic had something more than a glorified downloader after three years, you’d have a point. But they don’t, so neither do you.

          Microsoft shifting to 12% is an amoretised shake at marketshare by marketing to devs after getting shellacked by Sony and a storefront that makes EGS look good.

        • Hey since you’re here – can i set up my business in one of the rooms of your house/apartment? I’ll pay you $200. Once. Thanks, appreciate it.

          • $200 sounds a bit low, but sure, no problem. Just so long as there are only two landlords in the entire world and I am one of them.

    • Effort free profits?
      So far the biggest stumbling block to Epics legal efforts has been the courts recognising that the services and benefits offered by others for 30% is significantly more that Epic offers for 12%.

      I’m all for developers getting more but it’s sad watching folks get caught up in the hate and incomplete truths of the whole affair.

      • With how the Steam store runs, I have no issue as a consumer with the 30% cut because it’s clear where the money is going. Epic takes less money but the storefront is trash and the lack of investment is evident. You get what you pay for.

      • Seriously? Have you seen the Android Play Store or the Apple App Store recently? About the only extra ‘feature’ we’re talking about here is user reviews that are mostly either shilled testimonials triggered by in-app prompts or helpdesk requests. Maybe add a shopping cart, but you weren’t even buying one app, let along two, eh?

        But hey, if you think these things are worth 18% more of your purchase price going to a website rather than the guys who actually made your game then nobody should stop you from paying. Just so long as you don’t force your personal feature set preferences, that realistically cost nothing like an extra 18%, on the rest of us. Yeah, capitalism.

        Hell, I’m mainly interested in the games. If you’re looking for something more social, perhaps try Facebook?

        One thing I can say with certainty is that what ‘features’ are or are not offered by any particular platform will make not one ounce of difference to the outcome of any legal case. The cases are not about whether 30% is a reasonable cut for the services offered, they’re about whether you should be forced to pay that cut when other companies are willing to offer essentially the same service, even a cut down service, for significantly less.

        Courts literally couldn’t care less if a company is likely to end up going broke due to selling goods below cost, and they sure as hell are not going to protect a monopoly simply because it offers Steam trading cards.

        • Nobody mentioned Apple or Android here and I’m sure that the vast majority of people would agree with you that the store features of both are lacking for a 30% cut. The direct competition to Epic is Steam, GOG (for some people) and MS store and out of all of those options, Steam is the only store with features that’d justify a 30% cut. I do use Steam and enjoy Steamlabs and the huge amount of stuff they’re constantly testing and bolting on so I can find indie gems in the sea of AAAs and shovelware. Their competition doesn’t have any of that.

          • Umm… first sentence of the article. “Epic Games vs Apple case”. Also, it was mostly implied in the original post, which in this particular case happened to be mine. I mean, it’s kinda the only reason we’re even having this conversation. Of course we’re talking Apple and Android.

            Regardless, I genuinely am really glad that you have a store you like, no need to convince me or anyone else. I’m not asking you to stop. Keep using it, great!

            On the other hand, if your argument is that others shouldn’t similarly be able to decide for themselves what they want to pay for simply because the current options happen to suit you personally, that might be just a touch patronising.

          • Angora, I mean in the comments replying to you which is the current context of this discussion. No one here argued that Apple and co. deserves their 30% cut and I don’t think anyone will argue that (because Apple objectively don’t) and raising it is a moot point. It’s already a given that they don’t deserve it because their stores are trash.

            What people do argue is that if a store like Epic, Apple, Android etc. has no features then regardless of developer cuts, it’s not going to do as well as Steam for customer usage which does have extensive store features. Ergo, Steam can justify its cut versus the other storefronts since it provides far more features for that fee. There’s not much point in developers getting more money out of their cut if nobody can find the game to buy it, which is what you’re not getting about the arguments being raised. Poor storefront = poor discoverability = poor sales.

            Instead of charging less, Epic, Apple, etc. should charge the 30% and actually compete with Steam at a base level so they can fund the development of their storefront and once that works properly, then they can look at discounting the fee (or actually put money in as it is now in the alternative). There is absolutely no point in a customer touching a storefront that’s hard to search and hard to use at a usability level, because the unpleasant use experience will eventually outweigh the savings. I am glad though that you think that Epic’s existing and future customers aren’t allowed to demand a better storefront experience because godforbid Epic spend money improving a key investment, which is a common sense and practical business decision.

        • The “feature” is access to hundreds of millions of customers. Why do you think that should be free?

          • Why do you think that monopoly profits are a good thing?

            That’s why we have anti-trust and competition laws, so that consumers don’t get screwed by large companies buying up competitors, driving out the competition and extracting huge monopoly profits disproportionate to any actual effort involved.

            And it’s not free, a current model iPhone can easily set you back $1300. Who said anything about free?

  • Sony increase exclusive game prices by 40%. Microsoft reduces its cut on digital games and has game pass which gives you access to all their exclusives for 15 bucks a month. These companies couldnt be moving in more different directions.

    • True. Sony actually make and release games. Microsoft, well maybe someday they will…

      It is slightly amusing that Sony have released a game on Xbox before MS (also free on game pass for extra giggles). And MS will probably release a game on PS5 before it does on Xbox in deathloop.

      Weird times

      • They’re making and releasing games that no one can play because there’s no hardware to play on and that’s going to hurt them when the PS5 is being sold at a loss. Sony can’t do anything about the scalpers which are the biggest issue, but it’s hurting them more than MS at the moment.

  • Hoping that this means Publishers will actually charge less than physical copies now for digital games. Something tells me they wont, Something tells me they love charging the same (sometimes more) for digital games.

    • The only thing saving physical is that retailers would refuse to stock consoles if there were no game sales to be had. Consoles take up a shitload of storage and floor space for crap margins.

  • Another tech site has quoted the following from the court documents presented by MS:

    “There is a proposal currently under Gaming Leadership Team consideration to adopt 88 / 12 as a public PC games revenue share for all games in exchange for the grant of streaming rights to Microsoft,”

    That’s pretty significant as it places a big clause on this proposition. The same article pointed out that it’s not clear whether this applies to the upcoming revenue split or if the requirement was dropped .

    It does mean that if or when MS adopt an 88/12 split it may do so in a way that benefits MS by bolstering it’s GamePass Ultimate subscription. Even if the games aren’t on GamePass, XCloud (the streaming distribution) requires the same subscription so MS may be sacrificing upfront sales to help build its subscription catalogue.

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