Kotaku
News of Microsoft's democratization of indie game development was overshadowed this week by an increasing discontent among established indie developers that the company was halving the royalties paid to them for future Xbox Live Arcade projects, several well-informed sources told Kotaku.
Several developers directly affected by the cut told Kotaku that the once generous royalty share of 70 percent given to them by the company was within the past few months cut down to 35 percent.
The move, some believe, may be tied to Microsoft's future reliance on the recently announced initiative to deliver games created using the company's XNA software package to Xbox Live users for a still undisclosed price.
At least one developer I spoke with said they were considering moving over to Sony and its Playstation Network in light of the cuts.
Microsoft has been contacted for comment, but has not yet replied. We'll make sure to update as soon as we hear word.
Update: Microsoft has responded, and you can see what they have to say here.
Comments
There's a good and bad for this all. Hopefully though, it's just a rumor
If true, that's just awful. Why would they do something so drastic?
35%? Wow, no wonder no indie is interested in XNA...
one after another the dominoes keep falling
yeah, hope this is just a rumor, too. doesn´t come in a good moment, after the recent news i was pretty excited to get rolling on a xbox live game
Ms pulls it's money by being a suscription-based service, and the original royalty model encourages developers to make games for it. Cutting royalties in half will end up being a bad thing on both sides.
Well, it wouldn't surprise me at all.
Greedy bastards. How do you go from 75 to 35?.
Oh, Microsoft's doing something evil? Go figure
Huh, thats a big cut, but 70% is a large number to start out with. Perhaps at first they were thinking 70% of 1k isn't to much, but if these hit big that might be a huge loss. I assume MS acts as the publisher to these smaller devs? Whats the industry standard cut for publishers?
why is microsoft shooting itself in the foot? Hard download limits affecting downloadonly games (SF2HD, Bionic Commando, etc)
Now this? Giving developers a reason to jump ship to PS3
Wow they really are trying to snatch defeat from the jaws of victory.
Microshaft
remember the writers' guild strike? well here comes the indie game dev guild strike! it'll be a 40+ man raid =P
but yeah... that really sucks.
@Kyle81: lmao @ that...
I guess they feel that having lowered the barriers for entry, Microsoft will get even more content without having to pay as much. It's the quality of content that's going to suffer though, with established indie developers leaving for better pastures.
That being said, this is still a rumour. And I have no idea what royalties the creators receive on WiiWare and PSN.
@Kyle81: Try Macroshaft, this is big.
Honestly, what are you trying to pull? MS you EXPECT to get money for indie games? Come on, this is for the fans from the fans, not for your wallets!
if this is true, itll be just one more thing to help '08 be the year of the playstation3.
Oops...and I thought Microsoft just gave us a GDC 08 barring the Rrods of course...
Well, if it's true, then there goes all that good press and buzz. Microsoft better have some clever PR maneuvering in store to counter this bad news ("We feel that the additional exposure makes up for the cuts", etc.).
@hahnchen: Unless MSFT raises the royalty, I am sure the indie's would jump ship to a platform that even offers 50%. Sans the few loyal indie devs who are faithful and was able to eat because of Live?
Microsoft seem to tout these amazing ideas then shoot themselves in the foot or don't follow through! This can't be doing them any good.
It's still just a rumour, but 70%? Really? 50% would already be quite high, but 70%?
Found couple sites mentioning Dev Industry Royaly rates, raning from 10% to 40%. If these still hold true 35% isn't all that bad, near the top end. Still is a huge cut though.
[www.gamesinvestor.com]
[www.ifla.org.sg]
I wouldn't be terribly upset if they went to psn, hopefully Sony gives a bit more. What I don't understand is why Microsoft seems set in screwing themselves. One step forward, two steps back I guess.
Well, if they leave MS at least they will no longer be restricted by file size.
If this is true...
Sounds like MS likes to kiss people before they fuck em at least ;)
Wow that's really fucking weak. MS doesn't have enough money?
We can't figure out if 35% is good or bad until we know what the competition is doing. How much does Sony pay out in royalties?
what the hell is microsoft's problem?
Just when things were starting to pick up a bit. Well I guess now its sonys turn to make a mess, wonder what they'll do? Possibly announce an increase in price or bring back backwards compatibility . . .while removing bluray playback. I love the games industry, it's a wild place!
Indie developers need money badly. If Microsoft is so willing to screw them over, then they do not deserve the support of indie developers.
I have just one thing to say to Microsoft in the event they are interested in anything I'm working on: Fuck off.
-NK
This is another example of how desperate microsoft is to save their sinking 360 ship. They have to suck the life out of the small independent developer. This just confirms that the 360 is a dead platform. Sony has it so right with the PS3.
Well, I WAS interested in developing something for MS this summer...Not so much now. (This isn't the only reason, though.) I dunno what we'll do platform-wise at this point.
Bad idea on Microsoft's part to do this IF TRUE. If true, you're going to see a lot of these games come over to PSN, if not already. Getting your paycheck cut in half would tick anyone off. Even so much as to leave the platform.
Personally, I think 75% was way too big to start with anyways. That is some handsome royalty checks.
I am more curious about the sales of the high profile xbla games. 10 bucks per game, at least a million sold. Indie Dev walks out with at least 5+ million?
Well - if this rumor is true then it nullifies all the warm, fuzzy community gaming rhetoric that MS was shoveling at their GDC keynote.
Is it just me or does MS seems to be stumbling over their own feet in terms of public relations this year. Quite a reversal from last year when Sony seemed to be f*cking up all the time.
They made 125 million on selling stuff on Live so far, but lets screw the developers!
Definitely a bad move, I could understand if they reduced the royalties to 50% but a cut of 35% is too much as they clearly must have at first believe the 30% they would have received was viable profit. They probably didn't miscalculate so bad. Anyway this sucks.
@pupaboy2: Fanboy. If you can't offer a moderate opinion on something and constantly call the 360 a dead console, then how about taking that Dual Shock 3 and sticking it up your bumhole? I'm quite tired of people arbitrarily saying that one or another console is "dead" when we're not even halfway through the current console generation. In about three to six years, we'll know which console is going to be the first to drop.
The rumored royalty cut move by Microsoft is just another nail that's being readied for the 360's coffin, that's all.
I KNEW IT! these companies are gonna screw the little guy in the end. just stick to making bitchin flash games or other pc things!
AAAAAAHHHHHHHHHHH, THAT'S why they were talking about "democratic whatever blah blah blah" at GDC. Because this makes them look like scumfucks. Which is what they are.
I guess it's a balancing act of lying, because the truth seems to be pretty grim.
@pupaboy2: Your post makes no sense whatsoever.
@Fyren: Considering all that MS does is add it to live and QA, I can't see how letting the developer who shoulders all costs, and actualy made the thing, take 70% of of the is too much.
Internet portals that host indie games generally do 50%, and they do that without the QA, features of Live, advertisement on Live blades, XBLA customer service, etc.
Anyone know what PSN does?
Besides which, I thought for XBLA Arcade that 70% wasn't a standard, I thought it was up to 70%.
wow MS is the new Sony.
2006 Sony that is.
So so typical.
So so sad.
@BlackDove: If you look at the post of Xerxes 8933A/A it's not so bad since that's around the average royalties. I do dislike it alot but to put it to an average isn't so bad. Do you know what Sony charges? Until you know what the other companies charge it's hard to call MS liers. Especially since Sony is the biggest liers of all time. E3 crap, other stuff and just recently claiming PSN is better than XBLA for small publishers because silver card members can't buy demoes even though they can.
For those who wonder, I read somewhere that the royality on Wiiware titles is about 65%
grrr just reading through the comments I'm gonna need to get to a decontamination shower. the fanboy bomb's just exploded.
To everyone claiming that 70% was too much, you have to understand this is royalties off XNA developed titles, the cheap stuff. Not big games from Capcom, they are taking money away from small indie developers. This is horrible!
If true you can imagine tons going over to the PSN since they offer a free development software aswell as better royalties now.
MS is trying to turn the industry into the music industry...
Sony doesnt have royalty fees cause they just buy the gmes fromd evelopers for 1 lump sum.
@NKato:
Well said.
On subject though this is total bs, even if 35% isn't bad the overall quality of games is going to go down because they have less money to invest in the project (because of less profit potential) while at the same time increasing the amount of mediocre titles.
@-Sigil-: Uhhhh Silver members have been locked out of several demos already. They eventually get them but they have been giving gold members timed exlusivity on stuff.
Also if a developer is saying they are considering going to PSN because of this, pretty obvious the royalties are better on the PSN.
@Kyle81:
Which is what we pay for, but silver members still get access to 99% of demos and all DLC and XBLA games at the same time
Wait who is saying that developing for PSN is even reasonable for an indie? Wasn't the dev kit crazy expensive?
To code for XBLA you just need to pay $99 a year, simple.
There's a lot of benefits to making games on PSN... its more than obvious now.
@-Sigil-: this post doesn't think that maybe erm sony were right about PSN being better for small devs?
accuse gentle microsoft of a misdeed? shame on you kotaku!
@Kyle81:
PSN doesnt pay royalties. sony buys the rights to the game and pays the dev(s) 1 lump sum. it was on EGM a few months ago. it was either the guy who developed echochrome or everyday shooter that they were interbiewing.
@Kyle81: So a one week exclusitivity is your idea of a total lock out?
Yeah but the cost of dev kits and XBLA registration are hugely different so it's hard to predict which is the better deal since it's either $100 a year or $10,000 upfront.
And it's obviously better but if it was only 45% or whatever it might not even help.
@Morberis: You pay for timed exlusive for a couple demos? I really doubt it, especially since its something they only just recently started doing and only a few titles.
Only reason a person pays for Live is really just to play a game online. Everything else is given to a person, which s pretty sad since most live games are p2p and yet the only real bonus we get for paying is to be allowed to play online? We get pretty much everything else for free.
This is why Microsoft will never become the number worldwide console. Their business model has always been about getting userbase and then screwing people over. In the console world, with the userbase reseting every 4-6 years, people are never going to trust them. I mean they are cutting royalties and they don't even have global dominance.
@nolifedopestar: My first post said that this sucks. it is bad for devs and I do dislike MS doing it but putting it to the average royalties of indie devs isn't exactly a demonic act. It's also quite premature to judge it without hearing what the other devs charge. PSN is good but small devs do have to pay 10,000 for the development kits on it.