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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)

laynelane

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The title of the article does not match the contents.

“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.

Yes, Microsoft "clearly" has been planning the change and wants to cut Xbox fees. You can tell by how they flatly said they are not doing it. Articles like these are one of the main reasons why gaming journalism has become something I can't take seriously.

 

mansoor1980

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let them try , its all good

 
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yazenov

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While this plan is nice in theory, it would not move a needle in terms of console sales. Unless it directly leads to lower priced games, the PS5 will continue to trounce the Xbox in unit sales and developers will have no choice but to release their games on the popular system.

See steam vs. Epic store as a prime example of established dominance vs the new kid on the block trying to buy their way into the market instead of innovating and delivering a better product.
 
Jan 16, 2020
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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?

Good eye usually it should say exclusive streaming rights

Maybe by opting for the 88/12 they're just agreeing to make the game available on xCloud?
 
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Warnen

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While I enjoy blood thirsty MS, did this move help epic much?

Guess might drive some exclusives but hope it just spurs others to do the same.


That said still waiting on Sony to adopt the digital refund policy of others and they refuse to…
 
Mar 6, 2016
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Don't forget apparently Gamepass makes no money 🤭🤣

Well where’s the proof it has?

On the 7th day go... Phil created gamepass.

Unless 3rd parties decide not to release on ps, then this split will mean nothing. And even if they decide not to release on ps, then they’re just throwing money away.

And it’s the consumer who decides the “better to have 100 pies at 12% than 10 at 30%”.
 
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CAB_Life

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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.
MS has this little thing called Gamepass that gives budget-conscious consumers a steady stream of games for a $10-15 fee per month. Not sure how much more you want them to do other than offer that service for free (and they'll probably do that eventually with an ad-supported model).
 

MadPanda

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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.

It does cost them much as 18% on their scale is a lot, hundreds of millions a year, as it impacts all games, dlcs and micro transactions, basically everything happening through their store, so I'm not sure what Microsoft gets from this on a business plan. I have some ideas but I'm not sure whether they're sound or not.
 

Elios83

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This might be good, if they actually do it, to try to offset the impact of declining full priced software sales they're having on Xbox right now thanks to GP.
They obviously can't throw money at every publisher and for every game, in this way they could simply make a platform where full priced software sales are declining more attractive. Less software sales but with higher profitability.

About the competition Epic has already done this with their store and the impact on the competition has been absolutely marginal.
Unless the whole industry (Apple, Google, Steam, Sony, Nintendo) accepts this, it will be just a Microsoft thing. Big companies don't get baited in changing rules unless these rules don't work for them anymore.
 

supernova8

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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.

Well if they are offering a bigger cut in exchange for "streaming rights" then presumably they would be available on .. Game Pass (the streaming platform, or download and play, whatever floats your boat) at no additional cost..?

If you're on Xbox and you have Game Pass then you only really need to separate games into two categories:
(a) games on game pass
(b) literally everything else

If this lowering of the percentage means more games from (b) go over to (a) then yes I am benefitting as a consumer and I would see it as a "good". That's fewer games I need throw down $60+ for.

As for developers having less control of their property... well it's their choice, they either get into bed with Microsoft or they don't... not sure why we should even care unless we are literal investors in those companies.
 
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SSfox

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Make sens, games don't sell much on Xbox and MS are betting everything on Gamepass.

Thinking they would have done this if they were selling like Sony is being ultra naïve, remember that it's still the company that made you pay for F2P games for 15 years, and that tried to double you the price of Xbox live gold.
 
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Beardsalt

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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.
Why would any develope purposely limit their games to just Xbox?
They would literally be cutting off millions of possible users just to adhere to the Xbox ecosystem (which has been the smallest i console-wise n years)!
I mean come on, it’s common sense. This is akin to why businesses still sell merchandise on QVC/Homeshopper. You pay QVC a bigger cut to sell your product on their broadcast which will reach millions or you sell your product specifically to one store who promises a bigger cut for exclusivity of your product.
Most developers will choose to release on all 4 platforms (PC/Xbox/Playstation/Nintendo) to maximize profits no matter the cut!
 
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MonarchJT

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They need to shake it up, Sony and Nintendo have been the market leader for years now.
i'm happy that the xbox one gen went wrong ... gave us gamepass and series x..bc and ms platform unification ... refunds, crossplay and crossbuy and xcloud too ... well I don't care who was the market leader I am not a shareholder and the competition at the moment offers me simply less as a customer. I hope Microsoft continues like this
 
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"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."

Article is 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.
 

reinking

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Why would any develope purposely limit their games to just Xbox?
They would literally be cutting off millions of possible users just to adhere to the Xbox ecosystem (which has been the smallest in years)!
I mean come on, it’s common sense. This is akin to why businesses still sell merchandise on QVC/Homeshopper. You pay QVC a bigger cut to sell your product on their broadcast which will reach millions or you sell your product specifically to one store who promises a bigger cut for exclusivity of your product.
Most developers will choose to release on all 4 platforms (PC/Xbox/Playstation/Nintendo) to maximize profits no matter the cut!
Yep. We already have Epic vs Steam to see that the majority of developers/publishers are still going to release on the most popular platform. This would be big news if this is going to be just a straight up cut with no strings attached.
 
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Arkam

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It does cost them much as 18% on their scale is a lot, hundreds of millions a year, as it impacts all games, dlcs and micro transactions, basically everything happening through their store, so I'm not sure what Microsoft gets from this on a business plan. I have some ideas but I'm not sure whether they're sound or not.
Oh for sure it “costs” them cash. But the questions is whether this loss can be viewed as an investment. Losing money to gain users can be a smart mid term strategy if you feel you can keep them. As some one already posted better to make 12% of 100 sales than 30% of 10 sales.

So without us seeing their books, it’s just academic speculation based on public records and perceptions.
 

Beardsalt

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Yep. We already have Epic vs Steam to see that the majority of developers/publishers are still going to release on the most popular platform. This would be big news if this is going to be just a straight up cut with no strings attached.
I agree, IF there were no strings attached but these are not strings, they’re ropes lol!
 
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KungFucius

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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?
If it keeps games 60 bucks instead of 70 bucks isn't that as good as reducing the price? And if it prevents publishers from being cunts and not allowing streaming of games they paid for like they are with many games on nVidia's streaming platform. Doesn't that also benefit their customers? If this thing is real it is aimed at being more competitive which is better for those who ponied up 500 bucks for an Xbox.

But yeah its a bad thing because you bought a PS5 and must console war about them not just giving money back to consumers instead of some strategic marketing.
 

Hendrick's

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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?
Who the hell is saying this is just for developers and gamers? We all know how this also helps Xbox. It's a win-win-win.
dj khaled GIF
 

ManaByte

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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?

Yea this sounds like a shot at the marketing agreements that bar a game from GamePass. If Capcom signs one of those, then Resident Evil VIII wouldn't benefit from the reduced rate.
 

MadPanda

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Oh for sure it “costs” them cash. But the questions is whether this loss can be viewed as an investment. Losing money to gain users can be a smart mid term strategy if you feel you can keep them. As some one already posted better to make 12% of 100 sales than 30% of 10 sales.

So without us seeing their books, it’s just academic speculation based on public records and perceptions.

How exactly are they going to gain users with this? This doesn't change anything for the end user, ie us, customers. Sure, that math at the end is sound if this would lead to increases in sales, but it's not as everything is going to cost the same. Just compare steam and epic games store. Games and everything related costs the same, it's just the publishers getting more money.
 

Derktron

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i'm happy that the xbox one gen went wrong ... gave us gamepass and series x..bc and ms platform unification ... refunds, crossplay and crossbuy and xcloud too ... well I don't care who was the market leader I am not a shareholder and the competition at the moment offers me simply less as a customer. I hope Microsoft continues like this
I agree, Xbox learned from their mistakes and that is what makes me like them even though I still criticize them. I've given them props for turning into an aggressive company. This is something Nintendo has done with the Wii U disaster, turn that failure into a success.
 
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DenchDeckard

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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?
Business is give and take from all parties. It has to make sense for Microsoft as well as the devs or it wouldn't change.

If it makes sense and does infact benefit all parties then we will see it go ahead and more devs/publishers sign up to it.
 

Gamezone

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The only good that can come out of this for us is that Valve also lowers their cut to 12%. If Tim Sweeney keeps his promise, he will stop doing exclusives, and Ubisoft might return to Steam.
 
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Arkam

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How exactly are they going to gain users with this? This doesn't change anything for the end user, ie us, customers. Sure, that math at the end is sound if this would lead to increases in sales, but it's not as everything is going to cost the same. Just compare steam and epic games store. Games and everything related costs the same, it's just the publishers getting more money.
Can make the platform more appealing to some devs/publishers. While i said earlier that 18% ain’t gonna mean the end of Mtx, it’s still a bit of money. This could easily translate to preferred development or (limited) exclusivity. From their we could extrapolate more/better games make the platform sell more units, which then equals more user sales.

On paper it CAN work. Will it IRL... no clue without fully understanding their strategy and starting position.
 
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zaanan

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Friendly reminder of good guy Microsoft’s DNA
 
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El Pistolero

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Don't forget apparently Gamepass makes no money 🤭🤣

It certainly is not profitable, and won't be for a long time. MS is doing this not because of Gamepass money, but because of the other divisions "fuck you!" money. They are prepared to bite the bullet early on if it means dominating the industry later...
 
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Hendrick's

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This will also make it more expensive for Sony to keep money-hatting exclusives. MS wants as many games as possible coming to it's ecosystem, and lowering the cut is a huge incentive for some publishers/devs.
 

b6a6es

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I agree, Xbox learned from their mistakes and that is what makes me like them even though I still criticize them. I've given them props for turning into an aggressive company. This is something Nintendo has done with the Wii U disaster, turn that failure into a success.
Or sony with PS3 launch/Cell engine Crazy Ken’s disaster into PS4
 

b6a6es

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I guess people who enjoy Gamepass have to thank companies like Sony because they keep donating money towards Microsofts Azure and by proxy, Xbox. Thanks Sony. 👍
Or People who buys the majority of 3rd Party games on PS4/5 with Sony enjoying Free advertisements from Microsoft exclusive marketing deals / presentations, thanks MS 👍
 
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Derktron

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Or sony with PS3 launch/Cell engine Crazy Ken’s disaster into PS4
Sony's success came from Microsoft's mistakes. But look where we are at now, Microsoft was right and Sony was wrong because the majority need online DRM to work. In a sense, Microsoft was ahead of the time with scams that these devs do now. Sony took the opportunity and ran with it.
 
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I guess people who enjoy Gamepass have to thank companies like Sony because they keep donating money towards Microsofts Azure and by proxy, Xbox. Thanks Sony. 👍
Sony still uses Amazon and it isnt a donation.
Most streaming services arent profitable. None even come to mind. That Microsoft deal was Sony probably licensing their patents for game streaming. In any case Sony might just end up pulling a Disney+. Where the delay to market didnt really matter.
 
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kikkis

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Considering most of the revenue comes from microtransactions in online games, dropping xbox gold would be the best strategy to ultimately increase revenues.