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Microsoft wants to reduce the number of its Xbox stores and shake up console games



Microsoft plans to reduce its Xbox store to just 12 percent, according to confidential documents filed in the Epic Games case against Apple. The software maker details its store fees and changes in a January document, which also lists the 12 percent cut in computer games it announced this week. While most important parts of the document have been edited, one page reveals that Microsoft also wants to reduce its 30 percent reduction on the Xbox console.

The table reveals “all games will move to 88/12 in CY21”, which means that Microsoft has planned a significant reduction in Xbox transactions for some time in the 2021

calendar year. While Microsoft announced its downsizing on the computer, which is also listed in the same table, the company remained silent about any plans for the Xbox. A change of up to 12% would be significant, especially since Microsoft, Sony and Nintendo currently account for 30% of digital game sales.

Microsoft’s confidential plans from January.

“We do not currently plan to change revenue share for console games,” a Microsoft spokesman said in a statement to On the edge for these documents. This suggests that these plans have either failed, changed significantly since January, or Microsoft is not yet ready to announce changes. Anyway, Microsoft is obviously planning this change and wants to somehow reduce its Xbox fees.

This document is part of the Epic Games Vs. Apple, which starts on Monday and here may have questions about Microsoft’s fee plans. Both Epic and Apple are calling on Lori Wright, Xbox’s vice president of business development, to witness a third party next week.

The documents also reveal that Microsoft plans to accept this lower storage speed on the part of the computer with an important note. “The proposal of the Gaming Leadership Team to accept 88/12 as a public share of revenues from computer games is currently being considered. all games in exchange for granting Microsoft streaming rights, ”the document reveals. We asked Microsoft if this proposal was extended, but the company declined to comment in time for publication. Microsoft plans to cut its share of computer gaming revenue to 12 percent in August, but it’s unclear whether the streaming rights clause is still included.

Microsoft may have a warning to reduce computer games.

The streaming rights clause means that developers must ensure that games are available on xCloud for this improved revenue reduction. Cloud gaming rights, and in particular the Xbox Game Pass, have become an emerging battle for console exclusivity rights in many contracts recently. Nvidia is also generating repulsion from publishers and developers after posting certain games on its GeForce Now cloud gaming service without permission.

Any changes to Xbox store fees in exchange for streaming rights would put pressure on Sony, Nintendo, Valve and even Apple. As we noted yesterday, Microsoft also quietly supports Epic Games’ actions against Apple. Earlier, Microsoft defended its 30 percent discount on Xbox digital game sales, and Epic Games is happy to support it. “Game consoles are specialized devices optimized for a specific use,” said Rima Alaili, deputy general manager at Microsoft, last year.

Alaily claims that “the business model for gaming consoles is very different from the ecosystem around PCs or phones” because Microsoft subsidizes hardware and consoles “are significantly less on the market than PCs and phones.” An Epic Games CEO also revealed in a court ruling this week that the company has never tried to negotiate with Microsoft to avoid using its commercial Xbox engine. Although it defended its Xbox, Microsoft acknowledged last year that the company “still has work to do to establish the right set of principles for game consoles.”

Elsewhere, another confidential document highlights the exclusivity of Xbox games. STALKER 2 is listed as a quarterly console deal for exclusivity, Tetris effect: Related with six months exclusivity for related updates and The fold with eternal exclusivity for the Xbox.

Court documents also detail Xbox exclusivity deals.

Updated, May 2 6:50 AM ET: Article updated with additional details about streaming rights.


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