Microsoft Says Apple's 30% Fee Makes Xbox Cloud Gaming iOS App 'Impossible'

> the existence of android doesnt make apple not a monopoly

How come? User doesn't have to buy an iPhone. Many buy Androids exactly because Android has some apps that they want, so not only it is a competitive market, but it's also a market where this exact issue (whether certain apps are available) drives (in part) user decisions.

While even if I agree, is Microsoft the right company to complain as far as XBox?

And making hardware “software agnostic” you end up with the crap like Android and Windows.

There is a reason that consoles exists - where the hardware and software are integrated

I am especially curious what games you make to have such experiences and strong opinions. Interesting that you left that part out.

> ironic that Xbox of all people would complain

They are not complaining, they have only responded(in June) to a EU watchdog query and saying it not possible for them pay for IAP at 30%[1] to Apple and sell profitably, even though EU made Apple open up the App Store in EU recently.

[1] Apple does not mandate using their IAP per se, but forbids instructing on how to pay outside etc i believe.

I think this is an invalid comparison.

1. Steam is voluntary, you are free to instead use gog, epic, whatever or maybe buy physical boxes from the devs.

2. PC games these days can be huge. The hosting cost alone will be significant.

3. Valve have significant R&D costs for getting games run smoothly in multiple environments, some of which they have no control over.

4. It's up to 30%.

Part of what is missing with those raw numbers, is what you get for it as a developer.

I don't know about the others (And Nintendo's in particular is probably ironclad in NDAs and lawyers if their attitude towards their userbase is anything to go by), but for Steam you can read all about the technical, financial and sales/marketing features you get through the platform here: https://partner.steamgames.com/doc/home

EGS and MS Store compete on a lower %, partly because they offer less of this.

Valve has had a tiered system for a while now, it does still start at 30%, but then it drops to 25% for titles with >$10M in revenue, and again to 20% for titles with >$50M in revenue. They switched to that model after the major publishers started leaving Steam and releasing on their own launchers instead, so Valve structured it to give those AAA juggernauts a discount while still taking 30% from the small fry who basically have no choice but to release on Steam.

From a consumer perspective, Valve is the only one that comes close to deserving that cut. Between Proton, Steam Input mapping, Remote play, Family Sharing, etc... they are by far the most feature rich platform

With gaming:

- You're not producing a good that people need. Gaming entertainment is actually a pretty thin segment of goods.

- You can get free distribution easily (desktop, web, etc.). Other platforms are just increasing your market opportunity and you can charge a thicker margin to get onto them if you want to.

- Physical distribution has costs

- Servers and multiplayer have costs

With mobile:

- Applications do everything from dating, jobs, food, payments, etc. It's anything and everything, and a lot of them are absolutely essential for modern life.

- Apple and Google are the market. There is no alternative. They're a duopoly and embed their talons into everything.

- The app store is artificial. There's nothing stopping web downloads of applications, and any security concerns could be met with signing, risk signal heuristics and reporting, and application sandboxing.

There should be no "App Store Requirement" to deploy a native app. Period.

Furthermore, there should be no requirement to integrate with the duopoly's payment stack, messaging stack, or any other platform choice enforced upon you.

Yeah, but the problem with that is EPIC isn’t great on Linux, the licenses aren’t portable, and the stores can increase their fees at will once they gain market position.

In fact, if you become market leader for AAA it would arguably be your duty to shareholders to put it up to 30%

Consumers don’t actually want to be in the business of dealing with many different systems to minimise their costs in these sorts of markets.

Steam are predictable and are yet to dick me. Can’t say that about many companies having dealt with them for 20 years after regular consumption.

I am conflicted. I love Valve, but 30% seems like a lot. On the other hand, I doubt the developers are being charged for the bandwidth or for Steam platform integration. Which means that long after the developer has walked away with their money for the sale Steam is still providing licensing management, platform integration in the form of user management, and the bandwidth for every time the user redownloads the game at 0 cost to the user.

While that fee may seem high, the developers are in someways subsidizing other developers that could never afford to build and maintain that infrastructure. They're also reducing the friction and on-ramping of new players/users. They are also providing the payment processing and handling billing/chargeback resolution.

Just the merchant fees alone would be would be 2-4% of revenue (not including losses to chargebacks and fraud/risk controls). The raw cost of bandwidth usage would be ~2 cents per 12GB game download (not including infrastructure to host/facilitate the amount of simultaneous downloads). The staff to manage billing issues/refunds. The raw amounts are small, but not insignificant considering that for every $20 they collect on a AAA title there are several indie games getting all the same functionality which only nets Valve $2.

Valve, Epic, Playstation, Xbox. The platforms are providing the ecosystem and platform that has allowed gaming to flourish at incredible rates, outpacing the motion picture industry and the sport industry.

The surprising thing is that PC is an open platform where people could compete with Steam on even terms if they actually did it well. Gamers don't like installing 5 different game launchers and Steam is the oldest one with all their games and is mostly a neutral party.

I recently installed Playnite [1], an open source game library manager and its been incredible. It pulls in games from all launchers/sources and gives you a unified library. I think all it would take to bring down Steam prices is for studios to adopt one such project but they are too blindsided by the ambition to have their own platform. You still have to do all the downloads,licensing etc. but the fact that it's a unified launcher for all stores is enough for me to prefer it over others.

[1] https://playnite.link/

FWIW, there are large publishers which successfully negotiate with the ilk of Microsoft[1] and Sony[2] to get a better revenue split, as consoles in fact have more functional competition than mobile phone app stores: people who own a gaming console might could reasonably own a second one if they were interested in some game that was only available on one console or the other; this simply doesn't happen with phones, as only a small handful of particularly-crazy power users would ever carry around a second cell phone. If you want to not release on Xbox unless Microsoft gives you a better deal, it doesn't sound anywhere near as ridiculous to tell your potential customers "you'll have to also own a Playstation" as if you tried to explain to people that to use your new social network they have to also own and carry around an Android phone (or, worse, whatever the third option might be... is there even a third option anymore that would make any sense? ;P). You can tell that Apple has some insane amount of fundamentally market-distorting power as they seriously charge large publishers -- the ones you would expect to have the most leverage -- more than smaller ones; and, with maybe a sole exception of WeChat, we have never heard of anyone getting a better deal out of them, ever.

[1]: https://x.com/tomwarren/status/1671981463040819200?s=46

[2]: https://x.com/twthereddragon/status/1672270407179665409?s=46

Some of these platforms are less closed than others. Steam, for example, will give developers "Steam keys" for free to sell on other platforms or through their own storefront. So a developer can sell on Itch.io which only takes 10% (IIRC), the customer can use their preferred game client, and Valve pays for the bandwidth.

Can you imagine Apple or Nintendo doing such a thing?

https://partner.steamgames.com/doc/features/keys

> Imagine if they had to ship another every time they were asked forever.

The bandwidth and storage is an absolute rounding error at apple’s scale. If they want to use that as an excuse, then charge app makers cost for downloads. I can promise you it’ll never come close to 30%.

Is that actually common? I assumed most shopping malls would just charge rent.

Or reduce your own cut, like they expect Apple to do?

As always, the consumers lose when corporations fight. Even as they use us as their jurors in the court of public opinion.

Well, Microsoft expects Apple to give most or all of their cut to Microsoft...

They're both assholes in the size of their cut; don't pick Microsoft's side just because they spoke out first.

It's disingenuous in that they are both platforms doing the same thing.

Apple could argue that it's Microsoft's 30% cut that makes it impossible for developers to get their games published on the App Store. That too, would be disingenuous.

But Microsoft are making a PR maneuver that they can bring to the table to strike a deal with apple.

"I mean... it's Apple's userbase. Both 30% takes are outrageous."

Agreed on both points.

No it’s not. Spotify did just that before they removed IAP.