Confidential documents filed in the Epic Games case against Apple revealed that Microsoft planned to reduce its Xbox Store fees to only 12 percent, and the software maker details the store’s fees and changes in a document from January, where it also lists the 12 percent discounts for the PC games announced. This week, while most of the important parts of the document have been revised, and one page reveals that Microsoft also wanted to cut 30 percent of the store parts on the side of the Xbox console, according to the verege.
The document revealed that “all games will move to 88/12 in CY21,” which means that Microsoft has been planning to drastically cut Xbox transactions for some time in 2021. Microsoft has announced parts of its PCs, which are also listed in the same schedule. , While the company has been silent about any Xbox plans. The change to 12 percent would be significant, especially since Microsoft, Sony, and Nintendo all currently account for 30 percent of digital game sales.
“We have no plans to change the revenue share for console games at this time,” a Microsoft spokesperson said in a statement last Saturday, before releasing a clearer statement last Sunday, according to TheVerge.
“We won’t update the revenue split for console publishers,” says a Microsoft spokesperson. Microsoft still refuses to answer whether the document is inaccurate, or simply that the plans have changed.
This document is part of Epic Games and Apple and there may be questions about Microsoft’s fee plans. Epic and Apple are calling Microsoft’s Lori Wright, vice president of Xbox Business Development, as a third-party witness next week.
The documentation also reveals that Microsoft has been planning to adopt this low storage rate on the PC side with an important caveat. The document reveals, “There is a proposal currently under consideration by the Game Leadership Team to approve the 88/12 as a public share in the PC game revenue for all games in exchange for the granting of broadcast rights to Microsoft.”
Microsoft plans to cut its share of PC gaming revenue to 12 percent in August, but it is not clear if the broadcast rights clause is still included.
The streaming rights clause means that developers will have to make sure that the games are available on xCloud for this enhanced revenue cut. Cloud gaming rights, particularly Xbox Game Pass, have become an emerging battleground for exclusive console rights in several decades recently. Nvidia has also faced opposition from publishers and developers after releasing some games on GeForce Now cloud gaming service without permission.
Microsoft also supports the Epic Games action against Apple. Microsoft previously defended a 30 percent cut in sales of Xbox digital games, and Epic Games has been happy to keep it in place. “Game consoles are specialized devices that are optimized for a specific use,” said Rima Alili, Microsoft’s deputy general counsel, last year.
Alaily argues that “the business model for game consoles is very different from the ecosystem around computers or phones,” because Microsoft supports devices and consoles “outnumber computers and phones in the market.” An Epic Games executive also revealed in testimony in court this week that the company had never sought to negotiate with Microsoft to avoid using its commercial engine on Xbox. Despite defending its Xbox parts, Microsoft admitted last year that the company had “more work to do to establish the right set of principles for gaming consoles.”