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Drama Clickbait The Verge - Microsoft wants to reduce its Xbox store cut and shake up console gaming (Update: Not Happening, see OP)

Craig of War

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Update:


“We have no plans to change the revenue share for console games at this time,” says a Microsoft spokesperson in a statement to The Verge about these documents.


"Microsoft has been planning to cut its Xbox store cut to just 12 percent, according to confidential documents filed in the Epic Games vs. Apple case. The software maker details its store fees and changes in a document from January, where it also lists the 12 percent cut to PC games it announced this week. While most of the important parts of the document are redacted, one page reveals Microsoft also wants to reduce its 30 percent store cut on the Xbox console side.

A table reveals “all games will move to 88 / 12 in CY21,” which means Microsoft had been planning a significant cut to Xbox transactions for some point in the 2021 calendar year. While Microsoft has announced its PC cut, which is also listed in the same table, the company has stayed quiet about any Xbox plans. A change to 12 percent would be significant, particularly because Microsoft, Sony, and Nintendo all currently take 30 percent on digital game sales."
 
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Bittermich

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Big if true.
Ob the pc space I can understand, because there are many alternatives. But at the console Space? Unbelievable
 

xShaun

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Microsoft is going to change the gaming as we know it. I think it is great, we need new things in gaming! Always question and challenge the status quo!
It honestly feels like they have done so many lro consumer things this gen. Maybe they learnt from last gen.
Big if true.
Ob the pc space I can understand, because there are many alternatives. But at the console Space? Unbelievable
Sadly this won't help consumers save money in any way but it is gigantic for 3rd party I suppose.
Lower xbox transactions set.
More mxt in game next.
All according to the plan.
🤫 Dont let the gamers realise please.
EA, Konami are sending you a cheque if you delete your post please 🤫

The real reason why is because they are coming away from selling Games and gearing up towards Cloud. Just like when DVDs went from £20 to £10 etc but some companies like to don't the opposite way around instead as they focus more on physical media.
 
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GHG

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The cut is in exchange for streaming rights and will most likely extend to some sort of guarantee for a period on gamepass at some point in the future.

People who think this is just for the benefit of the developers or people playing games are clueless.

Ask yourself this, if they can just drop the cut without any problems why isn't the first intention to pass some of that discount on to consumers?
 

xShaun

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The cut is in exchange for streaming rights and will most likely extend to some sort of guarantee for a period on gamepass at some point in the future.

People who think this is just for the benefit of the developers or people playing games are clueless.

Ask yourself this, if they can just drop the cut without any problems why isn't the first intention to pass some of that discount on to consumers?
Jim Ryan isn't going to shag you mate.

This is great for the gaming industry and when PS and Nintendo eventually do it everyone will praise them. Just accept that this is purely positive and move on.
 

Skifi28

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I'd like to see somebody think of consumers and how to save them some money for a change. Not that I don't cheer for EA or Activision pocketing even more money.
 
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Loxus

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Don't forget apparently Gamepass makes no money 🤭🤣
Probably not making money for the Devs.
Which is why MS reducing they cut to 12%, so Devs would get more money from GamePass.
Games will probably still retail at $60.

But in all fairness, a 30% cut from the platform holders sounds ridiculous for all games.

I thought the 30% was for in game purchase with real money only and full game cuts was something different.
 

MadPanda

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This is a pretty big deal.

This can only be seen as a good thing for the industry. Hopefully Playstation, and Nintendo follow suite.

Could you elaborate how it is a good thing for the industry?

I'm not against this move, in fact I don't care as long as it doesn't negatively impacts me and my gaming experience, but we will still get all those dlcs, mtx, loot boxes and all the other atrocities that plague the industry. Developers would probably still be paid the same. So other that the publishers, who benefits from this move?
 

GHG

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Jim Ryan isn't going to shag you mate.

This is great for the gaming industry and when PS and Nintendo eventually do it everyone will praise them. Just accept that this is purely positive and move on.

Oh he's not? That's a shame, here's hoping he changed his mind and runs through my doorway to pounce on me after this post.


But hey, if you guys want to think they are willing to take a 60% reduction on margins in a business that has been designed and forecasted around the 30% cut for years with nothing in exchange then go ahead.

Don't let me spoil the party, Microsoft are only doing this out of the goodness of their hearts after all. It's all for you, the fans.
 

CS Lurker

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I hope this is the way Microsoft will guarantee the xcloud support that I expect it to have.
 

Bittermich

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Oh he's not? That's a shame, here's hoping he changed his mind and runs through my doorway to pounce on me after this post.


But hey, if you guys want to think they are willing to take a 60% reduction on margins in a business that has been designed and forecasted around the 30% cut for years with nothing in exchange then go ahead.

Don't let me spoil the party, Microsoft are only doing this out of the goodness of their hearts after all. It's all for you, the fans.

how is this a bad thing though? It’s way better than riding to prices to around $120 in Europe. Ridiculous.
 

docbot

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Good for Devs, I still feel that Microsoft is just flexing it's money muscle, trying to destroy the Playstation brand, which has actually made great achievements when it comes to Games in generally. So it's hard to root for Microsoft, they better start really bringing fresh, original games to the market which actually is great for gamers instead of just trying to buy there way ontop.
 

Arkam

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Could you elaborate how it is a good thing for the industry?

I'm not against this move, in fact I don't care as long as it doesn't negatively impacts me and my gaming experience, but we will still get all those dlcs, mtx, loot boxes and all the other atrocities that plague the industry. Developers would probably still be paid the same. So other that the publishers, who benefits from this move?
It will change nothing in regards to the above items. All this does is let publishers keep and extra 18%. Which is good.... but nowhere near good enough to cover mtx/dlc revenue.

IMO, MS benefits. Looks good on paper, probably won’t cost them all that much (grand scheme) and it puts PS in a bad position where they will be forced to follow suit.... and that will most definitely be felt by PS.
 

GHG

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Could you elaborate how it is a good thing for the industry?

I'm not against this move, in fact I don't care as long as it doesn't negatively impacts me and my gaming experience, but we will still get all those dlcs, mtx, loot boxes and all the other atrocities that plague the industry. Developers would probably still be paid the same. So other that the publishers, who benefits from this move?

For publishers who have the intention of creating their own streaming platform at some point in the future they don't benefit at all.

This move would be like Netflix getting ahead of Disney by offering them lower margins for exclusive streaming rights before they had the chance to pull their content and create Disney+.

It's a smart business move but people thinking it will benefit them in any way are misguided. Epic have offered a lower cut on PC for years and there has been zero reduction in the cost of games for the end user.

how is this a bad thing though? It’s way better than riding to prices to around $120 in Europe. Ridiculous.

Will this move reduce the cost of digital/physical licences for the people buying games?

It's not about framing it as "good" or "bad", it's about seeing it as what it is. They are offering developers a higher percentage in exchange for less control of their property.
 
Dec 10, 2020
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Don't let me spoil the party, Microsoft are only doing this out of the goodness of their hearts after all. It's all for you, the fans.

Yep, for the fans of MS. Article updated

“We have no plans to change the revenue share for console games at this time,” says a Microsoft spokesperson in a statement to The Verge about these documents. That suggests these plans have either fallen through, changed significantly from January, or Microsoft isn’t ready to announce any changes yet. Either way, Microsoft has clearly been planning this change, and wants to cut its Xbox fees somehow.
 
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Panajev2001a

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Good for Devs, I still feel that Microsoft is just flexing it's money muscle, trying to destroy the Playstation brand, which has actually made great achievements when it comes to Games in generally. So it's hard to root for Microsoft, they better start really bringing fresh, original games to the market which actually is great for gamers instead of just trying to buy there way ontop.

Attacking the way Sony makes money and outlasting them can be effective if they do commit to it: lower the store royalties, make exclusive deals, buy publishers, and try to attack the perceived value of games (if you can convince people that games are not worth paying for, what do you care you sell them an “all access” subscription, then you are shrinking your competitor’s royalty portion too).

They stopped competing on the old rules and are shifting to trying to reduce the royalties Sony makes through game saes and DLC’s.

Other competitors would come up if Sony were to give up (if you do not like Sony’s censorship wait until that other competitor is Apple 😂), but what I do not think we would come back from would be if game prices started to take a nose dive and people massively shifted into access pass scheme / games subscription service where they do start seeing games costing $29-49 as too expensive (try to sell a game on the iOS App Store for more than $10 😂).
 

xShaun

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Okay. This is bigger than most might have originally thought.

QRSIzc-T-jpeg
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
The streaming rights clause would mean developers have to ensure games are available on xCloud for this improved revenue cut.
So this would mean 3rd party games will be EXCLUSIVE to Xbox Cloud, locking out the like of Amazon, Tencent, and Playstation. Kinda dirty considering Sony have been giving Microsoft money towards the Cloud lately.

Yikes.
 
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Apr 20, 2015
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If true, pretty significant move. Can make the difference between a parity clause or more performance on third party titles and so on.
 
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Okay. This is bigger than most might have originally thought.

QRSIzc-T-jpeg


So this would mean 3rd party games will be EXCLUSIVE to Xbox Cloud, locking out the like of Amazon, Tencent, and Playstation. Kinda dirty considering Sony have been giving Microsoft money towards the Cloud lately.

Yikes.

There's nothing huge about it until streaming actually takes off (if it takes off)
 
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odhiex

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Interesting move by Microsoft. I wonder whether it would be more successful than Epic's.

This is a pretty big deal.

This can only be seen as a good thing for the industry. Hopefully Playstation, and Nintendo follow suite.

I wouldn't expect so. Steam is much bigger (library and dev supports) compare to Epic Store, even though Epic offers a lot less of store cuts.

Unless the future supports for Nintendo and Playstation thanked so hard, why would they follow the Microsoft's suite?
 
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docbot

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but what I do not think we would come back from would be if game prices started to take a nose dive and people massively shifted into access pass scheme / games subscription service where they do start seeing games costing $29-49 as too expensive
yeah, but you will also not see games on the scale of TLOU 2 if that's the case. Look at iOS, the need to earn money turned gaming into a pure gamble on your addictive behaviour (Candy Crush, Clash of Titans).
 
Dec 10, 2020
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So this would mean 3rd party games will be EXCLUSIVE to Xbox Cloud, locking out the like of Amazon, Tencent, and Playstation. Kinda dirty considering Sony have been giving Microsoft money towards the Cloud lately.

Yikes.

So, at the same time devs losing the revenue from other streaming platforms if they want to accept Xcloud
 
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xShaun

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There's nothing huge about it until streaming actually takes off (if it takes off)
Last time I checked you cannot play full blown games like Gears 5, Forza, GTA V, etc on an iPhone or straight to a TV.

It WILL happen, but when is the main question. I'm predicting it will begin to emerge in 3 years.

All depends how much money Sony, Tencent, etc keep donating to Microsoft for the technology to keep improving.
Almost everyone should have good enough internet to support it now, so the only major step left is server improvement which they are actively working on, and technology to improve the latency, which they have been doing through acquiring tech companies too.
 
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Jan 16, 2020
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Last time I checked you cannot play full blown games like Gears 5, Forza, GTA V, etc on an iPhone or straight to a TV.

It WILL happen, but when is the main question. I'm predicting it will begin to emerge in 3 years.

All depends how much money Sony, Tencent, etc keep donating to Microsoft for the technology to keep improving.

3 years lmao

I remember being told that 10 years ago

The vast majority of people are not playing their AAA games on a mobile device with shitty controls. They have their garbgage freemium games for that
 
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Chukhopops

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If it happens on the console marketplace then that's quite huge, it means all publishers suddenly make around 24% more revenue on the Xbox platform, all sales being equal. It also shows MS really believes in the future of streaming (and PC gaming as well).

On PC it just makes sense since right now there's no big reason to sell your games on the Windows store versus Steam since the cut is the same and the market is just massively bigger on Steam.
 

Chukhopops

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Okay. This is bigger than most might have originally thought.

QRSIzc-T-jpeg


So this would mean 3rd party games will be EXCLUSIVE to Xbox Cloud, locking out the like of Amazon, Tencent, and Playstation. Kinda dirty considering Sony have been giving Microsoft money towards the Cloud lately.

Yikes.
Doesn't say anything about exclusivity, just that they cannot exclude xCloud if they want to have the better deal. Or maybe I'm missing something?