Spencer on Why It Makes More Sense for Microsoft and Sony Than Apple and Google to Keep the 30% Fee

Phil Spencer explained why it makes more sense for Microsoft and Sony to keep the 30% fee on Xbox and PlayStation stores compared to Apple's iOS and Google's Android stores.

[CrimsonWing69]

Lol ok, just stop.

[OptimusDK]

Did you even read it

[CaptainHenry916]

Most of the time Phil doesn't make sense that's probably why CrimsonWing said that.

[NotoriousWhiz]

That's two that didn't read it.

[CaptainHenry916]

@NotoriousWhiz
It has nothing to do with me reading it. I'm just replying to Optimus comment and letting him know why Crimson probably didn't read the article.

[NeoGamer232]

I think that there are several fundamental flaws with the logic.

First, stores are maturing and over time there is less and less changes so they will get to a point of no more innovation. Thereby, not needing the development and becoming cheaper and cheaper to maintain.

Second, although I agree with the volume argument, gaming companies such as Sony, Nintendo and Microsoft rake in 100's of millions to billions of dollars each year from gaming. There is room for some trimming of profits to save gamers from having to go from $60 to $70 games.

Third, I think that the platforms should be allowing multiple stores on their devices. If I am on a Windows, MacOS,, Switch, PS, XB, iOS, or Android device I should be able to buy content and that content should be available on any of those devices I own. Stores should not be Device or OS specific. That creates a monopoly, where I as a consumer am strongly deterred from switching devices because of the cost it would be for absolutely no reason. I have a lot of movies and games I have bought, but switching away from my primary console platform and mobile platform does not at all make economic sense because the cost to switch all my content is way more then the costs to keep my primary platforms.

Fourth, Everything should be sold based on profiting from their costs. Selling consoles at a few hundred dollars cheaper then they are to build then recouping that cost through locked in services and more expensive games is ridiculous. Sell the device at $100 or $200 more then give me games and services cheaper reflecting their actual costs. It doesn't matter how they do things, they are targeting a ROI. Be upfront and make me pay based on the actual thing I am buying not a discounted device for more expensive software and services. All they are doing by using this model is making it seem cheaper then it really is.

[Tacoboto]

First point - store maturity - irrelevant anyway and incorrect. The App Store undergoes major revisions every few years, PS Store just got a redesign and Xbox Store constantly gets UI changes.

Second - the only point worth making really. They have the headroom to improve goodwill towards developers and they actively choose not to.

Third - Multiple Stores for those reasons? Economic sense and a hobby 100% about being entertained don't go hand-in-hand. Windows exists for this already too; you'll likely never see Microsoft and Sony freely swapping licenses.

Fourth - This would crater the games industry and many more wallets. But really, based on the above, Windows hits all these boxes for you already

[NeoGamer232]

First point.... Stores used to change every few months now they are changing much slower. So, you have proven my point on costs.

Third Point... Instead of looking at things on how can I benefit companies I am look at what benefits the people and consumers. Store competition would change the dynamic from "lock-in and milk" to "compete across". When I buy a PS for example, why can't I join XB Game Pass Ultimate, and buy my games on Steam? Any argument against that is arguing for companies not consumers.

Fourth Point... How would that tank the market? That is hyperbole. And Windows does not hit all the boxes. Windows is only one device type.... I want a store across all device types. I want to own an ipad tablet, Android phone, Windows desktop, and console (and I do).... But, I don't see any reason why I have to buy a game I really like on all or many of the devices if I want to play it. Spotify lets me listen to music on every device. Amazon allows me to shop for retail goods on every device. Why can't I buy games for all my devices? It is pro-company and anti-consumer forcing me buy a game multiple times to play it on different devices. Absolutely dumb.

[Petebloodyonion]

1) Yes a store usually need investments at the start and investor hope to recoup and make money at later stage when cost for maintaining is reduced it's call a risk. If it was your store would you suddenly cut in your profit when you are making money because your initial investment are paying off?

2) There is room for some trimming of profits to save gamers from having to go from $60 to $70 games.
Are you directly paying the 30% fee? reducing the 30% fee would mean that the publisher would make more profit not suddenly give you a rebate. I don't see Assassin's Creed costing cheaper on Epic Games Store do you?

3) Does Steam allow different store on the platform? Does Amazon allow different store with your amazon subscription?

4) Is this not what they are doing? Buy the Serie X or PS5 500$ model and you will be able to buy from various outlet likes Gamestop, Wallmart, Amazon, etc. Or buy the cheap version where they take a huge hit and get stuck with the digital store only.

[NeoGamer232]

1) Physical retail has this thing called competition. It costs 10's of millions to setup stores like Costco, Home Depot, Lowes, Wal-Mart, Target, Best Buy, etc. But I can goto any competitor and buy the products too. The problem with all the digital stores is where can I shop if I become disenfranchised with the Apple Store? Every store has risk but only digital stores don't have competition.

2) We are directly paying the 30% fees as they price the games to make a profit. There may be less sales if that fee wasn't there, but at the same time the price would be lower and companies would not be MSRP pricing and then discounting it to make you think it is selling cheaper.

3) That is my whole point. I envision a world where the Apple, Google, Steam, Microsoft, XB, PS, Switch, etc. stores are on all platforms. And when you buy something you have it across all platforms. If I get ticked at Apple and spent several thousand dollars at the Apple Store then, I switch to Android, I end up having to rebuy all the stuff I bought at the Apple Store. That is ridiculous and discourages me from switching.

4) No, the hardware vendors either barely break even or take a loss on all the devices, then they make back the money plus on software and services. Part of that 30% profit for each game sold is how they justify building the hardware to begin with.

[lelo2play]

They can give any excuse they want, but 30% fee is absurdly high for any store. It's just plain robbery.

[nickanasty206]

I mean the true cost is passed on to consumers, so none of us should be ok with this. In the end it is consumers making up for the large chunk any of these digital storefronts are taking, hence 70 dollar games.

[Charal]

This is a little bit naive I’m afraid.

Games prices will not change for end consumer whatever is the revenue model of these stores. It is only a balance about who will get more and less money between dev and editors.

Did you see any price drop on Apple store when Apple lowered their fees? I don’t think so.

I generally does not like this kind of discussion from actors of the industry, as they can say whatever they want with little chance from our side to completely understand or being able to verify if what they say is true.

Plus, devs or editors representatives talking about prices and fees are certainly trying to influence to get a bigger part of the pie, not to sacrifice anything in consumer interest.

As an old gamer, I am still amazed to see it is considered normal now to pay full price for digital game vs retail copy, and premium for digital deluxe editions with a bunch of crappy side items.

Sure download servers and bandwidth are not free, but all the manufacturing, shipping, stock surface and retailer margin costs are out of the equation.

This is for me a much more interesting topic to challenge the industry about.

[nowitzki2004]

Us consumers overall are a careless bunch as well, so we should take plenty of the blame too.

[Petebloodyonion]

I would agree with what Phil is saying regarding the console space but if I follow Phil's logic it means that the Xbox store should keep the 30% fee like the Ps5 store due to the lower number of console available in the generation. So what about Windows Store on PC then?
If I follow the logic said about phone I'm pretty sure that the number of device running windows 10 are quite high so how come MS don't follow suit there?

[Zeref]

Windows Store fees are not 30 percent. It's at 10 percent I think

[Petebloodyonion]

If the case then I can accept Phil Spencer's logic on the subject.

[Newmanator]

What kind of a run on of a headline is that

[Rachel_Alucard]

No matter what anyone tries to sell you. They will never pass what they save on to the customer. That line is stated under the assumption that the industry does things out of goodwill. It always just goes directly back into their pocket to please investor calls.

[Fluke_Skywalker]

I don't really see how it's an issue for a store to take a cut of a sale. That's kinda how shops work, be them brick and mortar or digital 🤔 I know gaming has different margins and shit but I work in retail and I know our margin is waaay higher than 30% same can be said for most retail. No one bitches about that.
You want to sell your goods through a store? Only an insane person would not expect to give them a percentage of the sale.

[XxINFERNUSxX]

So companies that are worth billions need more $$? LOL Greedy fucks, it's why I mostly torrent. I will support indie developers before giving these companies my $$, I rather torrent from greedy corporations.

[Charal]

This is typical Spencer talk: business model, game pass, millions, $$$$.

Not a word from him in recent weeks regarding first SX/PS5 face off and serie S far from being a 1440p machine, plus dropping details and frame rate vs SX on top of lower res, contrary to what have been marketed before launch.

He is just occupying media space to divert from a difficult launch of Xbox next gen.