XBLA royalty rate cut in half

I didn’t see a thread on this already, which surprised me. Short story: XBLA royalties for 1st party games used to be 70/30 in favor of the developer, now they’re 35/65 (with maybe 45/55 at the high end).


As Jake says in the last link, it seems like this might reduce the likelihood of seeing really cool stuff on XBLA. I think the service has (had?) the chance to try to be the HBO of the game industry.

I will be interested to see Sony’s PSN response. I had heard that WiiWare was already 35/65, but then I heard another report that it was actually 65/35, but I don’t know for sure.


I don’t know the ins and outs of the biz very well, but does this strike anyone else as a very self-destructive move by Microsoft?

To clarify, this reportedly affects developers directly publishing on XBLA. Not the XBLA royalty rate of publishers who have a publishing agreement with Microsoft.

According to this article at joystiq, this ‘reduced rate’ only applies to developers for whom Microsoft is acting as a publisher, fronting costs for ESRB certification, localization, and presumably MS certification, all of which would add up to probably in the range of $50k-$100k as I understand it.

This would functionally make Microsoft the publisher in those cases, and taking half of what would otherwise be the developer/publisher share makes a lot of sense to me.

I don’t see this as halving the revenue as much as MS offering publishing services to expand the range of indie devs who can feasibly get their products onto XBLA.

And they end up paying for less stuff (ESRB certification, etc). So there is less up-front cost but less upside if the game goes big.

So, no matter what happens, microsoft wins.

Well, they were already getting that money, so you can also look at it as lowering the barrier to entry.

I’m way more surprised that the indie developers used to get 70% than I am that they now get 35%.

Nice of MS to help towards the cost of MS certification.

You’re suggesting that they shouldn’t certify code that’s going to run on their console? Or are you suggesting that it should be free? So far as I know, ever console maker charges for certification.

Those kids from volt gotta be paid somehow.

Yeah, why doesn’t big bad Microsoft lose once in awhile?

Anyway, basically MS seems to be covering the publishing for XBLA games at 35/65 and if you want to pay them for the publishing or publish your own game you can still have your 70/30 right? This seems to be the antithesis of what some people in the thread are trying to make it out to be.

No, I’m suggesting that if this is one of the justifications for a lower dev split, its a bit shaky, because like publishers sometimes do, they could then inflate those costs to be whatever the hell they wanted.
I guess they could do that anyway…
Long live PC gaming.

Is it possible to publish on XBLA without going through MS as your “publisher”?

Is it possible to publish on XBLA without going through MS as your “publisher”?

Yes, if you sign with companies like Vivendi/Sierra Online, Ubisoft and the like, who then happen to be your publisher. Straight self-publishing isn’t possible at this point, IIRC, but that’s probably what the XBL Community Games channel is being made for.


No. 35/65 is the only deal being offered to new developers; you can’t “publish it yourself”. You either go through Microsoft at 35%, or go through a 3rd-party publisher and get like 30% of 70% == 21%, or whatever deal you can manage to eke out.

(I have the old deal, so I am not affected by this … until my next game.)

I also want to try and inject some sanity into the discussion by pointing out that the cost of testing + localization is nowhere near half the revenue for an Arcade title, unless that title totally bombs (like totally bombs). This doesn’t in any way even the deal out. It is just something they are offering to make the situation slightly more appealing, but the truth is that Microsoft just wants to make a lot more money off Arcade games.

Since they control the channel, and they built it, that is sort of their right, but I do think that this will have significant hard-to-predict consequences.

Err… if that’s how the other publishers work it’s still rather hard to paint Microsoft as being ebil here… you’re still getting a bigger cut if they do the work than you would if you were working for a “real” publisher, right?

I also want to try and inject some sanity into the discussion by pointing out that the cost of testing + localization is nowhere near half the revenue for an Arcade title, unless that title totally bombs (like totally bombs).

Define totally bombs? I thought I recall hearing that most games do indeed totally bomb and only a few sell mediocrely and only a handful sell well?

Plus, just as a reference, the only place on the net I know of that has XBLA game sales estimates this chart:


That uses MyGamercard.net info to extrapolate how well XBLA games sold.

Quite a few games have done quite well, but a lot have bombed, according to that chart. Though I guess where you put the line on defining “bombed” is a big factor.

That may be true, but it still means an indie developer (who isn’t publishing through Ubi/Vivendi/Activision/EA/whatever) has to come up with that money. Even if the reduction in back-end take from 70% to 35-45% ends up being more than the $50-100K required for localization, ESRB submission, certification, and so on… if you don’t have that extra $50-100K, you don’t get your game on there.

It is effectively lowering the bar to indie devs, making the game costs pretty much ONLY the cost of making the game, at the expense of getting less money in the long run.

Maybe that’s not a good tradeoff, maybe it is. I suspect it will depend on the indie dev and game in question. The 70% split was probably not sustainable long-term, and most XBLA devs seem to be surprised it went on as long as it did.