I do think a company should pay for talent, but then again, if someone's not happy with the rates, they don't have to publish on the platform.

Well that's... vague.

Sounds to me like, "Yes it's true, but we rock anyway."

Or possibly, "All your bases are belong to us."

I don't know marketing speech is tricky.

Nextup Kotaku responds to the response of Microsoft responding in response to royalty cuts …

@Killtacular:

"they don't have to publish on the platform."

Exactly. Let MS charge what they want...then they can watch as they all flee from XBLA to PSN(or wherever). If MS wants to shoot themselves in the foot- I say let them.

@Tylahedras:
Especially Microsoft marketing speech. The spin machine's at full tilt these days for all three companies though...it's pretty hard to be sure what's going on with any of 'em, especially here at GDC.

@romBox: Bingo! Bad move MSoft. And here I was thinking you were becoming a harbor for besieged indie developers.

Seriously, is there one game company beyond reproach?

Oh. Yeah. Valve.

@Killtacular: Humm... You're not sure companies should pay for talent? What should they be paying for then? I'm not sure I understand your logic. Also, I don't think it would be good for MS to have too many people turn away from their platform.

And here we go, another round of spectacularly ill-informed comments on the way. Brought to you by a bunch of clueless fanboys without the faintest idea how the industry works. Take it away, all...

"blah blah blah"

Translation;

"YES, WE FUCKED THEM. WE FUCKED THEM RIGHT IN THEIR STUPID ASSES! HIGH FIVE"

They would've denied it if it wasn't true.

Yes, we're not commenting about supporting our independent developers that's going to float out console this year, BUT OH GOD - WE'RE AWESOME. LOVE US.

Hopefully some Kotaku insiders will let us in on how much cut the PSN and Wii.

Like I said, I'm not defending Microsoft, but 35% is a pretty standard royalty rate in this space (and even higher than some!).

@cheeba: Aren't we clever today?

I always thought that access to the market should be open, anyone should be able to push software to the Xbox Live market and anyone should be able to purchase, but that MS would be served better by just getting their cut from every transaction. Apparently, they want to charge the developers for access to the market, charge the customers for first access to buy the products, and then take a cut of the transaction.

Seems to me that MS is letting their greed cloud their long term status in the console market.

Writer Strike! err... I mean Indie-Developer Strike!

/facepalm

Microsoft. Come on. Who the fuck wants to develop for a commercial platform when they don't get reasonably paid for it?

C'mon was this unexpected--when has Microsoft ever been shying about using market leverage?

Even legality is no barrier to them.

This is a pretty crappy rumour. We don't know how this compares to other markets like Steam or PSN for a start. 30% could still be 3x as much as PSN for all we know.

That was more of an advertisement than a confirmation or denial - is it even possible for MS to put the spin on hold when they make a statement?

@Dorphat the Insomniac: *that're... this is what I get for re-typing it three times.

Nevertheless, anyone have any insight on how much indy game devs traditionally make without using a service like PSN or XBL to springboard their software? (Yes, I guess that means indy PC games...)

Microsoft are vorlons now

Well they can always develop for the pc and make 100%.

But whats 100% of nothing...

Anyone?

Bueller?

I'd be interested in knowing exactly where dollars spent on arcade titles goes...

@HurricaneDave: MS hosts the content, as well as advertises, support, etc for it. They even take care of a lot of the testing. 35% is way better than any indie will get with something like Popcap or those services.

Thats always the answer to something like this,

"we work closely with all of our partners to provide the Xbox 360 community with the best entertainment possible while
(Between the lines it reads, We totally shafted Indie and dont give a shit, money money money money!)
making publishing a title on XBLA an attractive prospect."

From my opinion, it's a case of read your contract before you sign it.

Is it just me or are empty PR responses worse than not saying anything at all? It would be nice to see a company have the balls to say something like, "Since we host, market, and deliver your product and basically have a captured consumer base waiting for the developers goods, we decided that it's in our best interest to take a larger cut to support our infrastructure. Developers will still make a pretty penny even at 35% because our user base has grown greatly since the launch of XBLA."

Now I'm not a fan of big business but sadly, they are the ones that make the video game world go around and not everything has to be sugar coated. everyone wants to make money. Tell it like it is and I bet you wouldn't see as much of a negative reaction as you would expect.

I'm sure that some developers will move to other platforms because of this but as that platforms user base grows, don't be surprized if you see their pricing plans change as well.

guys just stop supporting their BS...it's all y'all need ta do

Pretty clear they mean yes they`re cutting the rates.

Answering the question by not answering the question. Typical Microsoft.

@zPhreak:

Seems simple to me that MS should allow the developer to find a host or host it themselves, either way let it be their decision on how much to spend for hosting. As for advertisements, I've never seen MS advertise any indy game and I'm sure if that was the case, the indy developer would rather persue their own avenue for advertisement.

I think you are giving MS too much the benefit of the doubt, plus what about the other stuff I posted. I guess the real key now is for Sony or Nintendo to capitalize off of this rumor and release their own royalty rates.

Cutting the royalties make no sense to me. I doubt the rumor is true. Microsoft are not idiots!

A rate for any contract isn't guaranteed until you sign on that dotted line. Indie Developers could be angry since every game previously was 70%, so it was always expected it to be 70%.

If we know how much the rates are on PSN and others then we can probably guess if the threat is more of a writers strike and not an all out abandoning.

@tei: Don't have to be idiots to make bad decisions. Just how things are this gen. :(

Microsoft has the power and ability to destroy the industry like this, but it is a terrible idea. Not just terrible like a serial killer smothering a baby (which it is quite like), but terrible from a business standpoint too. If Microsoft continues with their 70% cut going to the developers, they will see a thriving market. If they cut it to 35%, the market will disappear. I know that Microsoft is confident that they are invincible and that everyone is forced to worship at their feet, but they're wrong. They do still need to worry about Nintendo, Sony, and even small unknowns who might launch their own platform specifically for small developers.

There are multitudes of very creative people out there and a huge market of people wanting to experience whaty they have to offer. All they need is someone to provide the boring platform background. Yes, that platform is valuable, but cutting the developers to the bone for it is a terrible business decision.

Microsoft's Windows platform got huge because of developers. They know this. It is part of their history. Now we're seeing that if they had the ability at the time to charge every single developer an astronomical amount to develop for their platform, they would have and Windows would have withered and failed. Microsoft is preparing to abort it's own gaming platform in this way. I suppose it is the logical extension of their complete lockdown of their platform, doing in hardware what the legal system denied Nintendo the ability to do legally in the 80s.

MS is a company in business to make money, and make as much of a profit as possible. If this move is true and it drives away (valued) developers and it costs them money, than they will respond to this and possibly change it. A distributor/publisher does involve a lot of over head, though digital distribution is a bit different.
Because I suspect they will leverage the passion of budding game developers who want exposure more than cash percenategs, (much like the music industry), MS will leverage this exposure as their 'product' to these developers. This allows them to have the financial incentive to get behind this whole "youtube of games" thing and support it because it will be financially viable.

I don't particularly care for MS as a company as it relates to me the consumer, due to the reason they tend to do the least possible to satiate me as a consumer. They have far to conservative of a track record for me to want them to dominate any market (especially entertainment), but I think what they have done with XNA is pretty interesting and has helped things a great deal for developers and I'm glad they are competing in the game market. I don't want them to dominate though or even be in the lead. I like a separate but equal 3 way fight here as I'm happy with what each brings to the table. I personally find so far that being a pc/ps3/wii owner covers most everything I want, though.

You only need to look at the leadership in charge at microsoft to understand why things are going the way they are.

Better stock up on the chair-proof armor.

Can't they just make it 50/50? I mean hell all the people working on the game are doing just that WORKING on it. Why make it less than 50%?

In the distance the crowd forms chanting PSN PSN PSN!!!

Doesn't seem like a very wise business move to me. Not something that they should be doing with the PS3 gaining on them.

If this turns out to be true I expect alot less indie developers to make games for the Xbox brand. If they can do the same thing and get paid better elsewhere...they will.

Sounds like propaganda from this secret "well-sourced RUMOR" against Microsoft.

So basically they admit confirming no denying that the royalties have in fact not officially been un-halved.

That's just crystal.

Would that be even legal?
Well, I think I'll just give up making my final project on Game Development on XNA for X-Box...

@HurricaneDave:

Heh, they have to pay for the RROD somehow...

Well.

It's Microsoft.

If there's one thing they're good at, it's monetizing software, and despite all the money spent repairing shoddy hardware and providing ad overload, they know they can make it back selling code. It's really just their business model at work.

That sounded awfully long for "We're not going to tell you." But if it were false they would've said no.
@7ucky:
I saw that in the other thread too. Is that for a standard game like you'd see at Best Buy? Because the publisher relation is different for that. In a typical relationship, I believe the publisher funds the development, prints the CDs, advertises, and distributes. In this relationship, Microsoft only needs to distribute (which is just bandwidth) and possibly advertise (on channels they already own).

@rebelphoenix: Why should it be 50% each? Are you just taking the number of parties in the transaction and dividing equally?

I suspect that there is a cut pending. I doubt Microsoft will cut it in a way that will make it more profitable to be on another platform because that's not wise. I guess this just gets to the heart of the matter of whether fans are armed with enough information to be outraged about what happens on the business end of the games industry. I'll let you all know right now, the business end is uglier then you all can imagine. Listen to some of the old gamasutra podcasts and some indie outlet boards... this isn't new nor pretty. I think it's nice that fans are willing to support indie developers but we shouldn't react without facts.

@romBox: If MS wants to shoot themselves in the foot- I say let them.

Yep. What sucks is that seems to be exactly what they are doing.