Microsoft to potentially give up 30% commission on Xbox in wake of regulatory pressure
Microsoft is now facing pressure from regulators ahead of the Activision Blizzard acquisition, which forced the company to revise some principles for its storefronts. This also means a possible replacement of standard 30% commission on Xbox with a more flexible model.
Xbox corporate vice president Sarah Bond told Axios that Microsoft is “more focused on adapting to regulation than fighting against it.”
The company doesn’t make any promises regarding the possible changes, only saying that it might apply new rules to the next generation of its console stores. Bond noted that the industry’s business model formed when people used to buy physical copies should change: “It has put the device at the center of the experience. We think it should be the player at the center.”
Microsoft revealed 11 principles of open app stores on February 9, saying that it wanted to address its “growing role and responsibility” within the industry. Although they are applied to Microsoft Store on PC, the company has already committed to following seven of them on Xbox.
These rules are focused on safety, security, accountability, and transparency, with Microsoft promising to treat every game equally, respect players’ privacy, and not use any data to compete with third-party devs.
The remaining principles should change the way developers engage with Microsoft’s storefronts. They will be able to choose third-party payment methods and provide more favorable terms for players in other marketplaces outside of the Microsoft Store.
“We’re going to evolve the business model to support how much of the functionality we’re providing them that they adopt,” Bond said when speaking of the company’s plans to apply these open rules to Xbox in the future.
Microsoft, however, still justifies Xbox’s 30% commission by saying that it is selling consoles at loss, so it has to recover costs through revenue earned in the store. Although the company is “committed to closing the gap on the remaining principles over time” to appease regulators, it doesn’t mean that it will happen 100%.
