- Microsoft announces a cut on the fee it takes from the game’s sales to the Windows store.
- This announcement will pressurize Apple to make the battles large-scaled.
Introduction:
Microsoft shakes up the gaming industry with a very important announcement. It will cut down on the fee it takes, from the game’s sales to the Windows store. Superficially it is a welcome move. Microsoft matches the 12% cut that Epic games take. This puts more pressure on Valve that takes a 30% cut on Steam purchases. The cut seems to be a tactical move: Microsoft wants to indirectly pressurize Apple. This week’s announcement can play a huge role in the bigger app store battles that may start next week.
Statement from EU:
The Microsoft announcement has come just before a court trial between Epic Games and Apple. The EU has detected issues with Apple’s rules. It claims that the company has a “dominant position in the market for the distribution of music streaming apps through its App Store.”
Microsoft is silently backing Epic Games’ action against Apple. But Microsoft has called for the regulators to investigate the Apple app store. If the effort turns out to be a success, it would benefit Microsoft’s software business. It will also benefit its ambition related to cloud gaming.
About Epic Games founder, Tim Sweeney:
Epic founder Tim Sweeney shares a long history with Microsoft and recently their interests are aligned. Sweeney popularly lashed out at Microsoft’s efforts to control the windows software ecosystem with its store. This was along with the Universal Windows Platform (UWP) initiative. Since then Microsoft has been an open model for Hololens. Sweeney shares the stage with the software maker and pledges Epic Games’ support for Microsoft’s mixed reality headset.
Apple is on the eye of the storm:
The Apple App store is in the middle of the current lawsuit. It has been a particularly sore point for Microsoft. After it lost the battle against IOS and Android, Microsoft has been fighting battles against the Apple App store for years. It hit out at the Apple Store with the changes in policy. Moreover, Microsoft will take any chance to force favorable fees if it is timely. The software development company also launched its SkyDrive for iPhones in 2012. But it got caught up in a battle with Apple over a 30% cut of revenue for cloud storage purchases through the app.
Microsoft is also into a battle to launch its xCloud game streaming service on iOS. There it would keep the 30% cut it makes on game purchase. This will also include in-app transactions on cloud versions of Xbox games. Apple continues to block services like xCloud or Stadia. And Microsoft had to create a web version to work around the restrictions.
Microsoft’s chief legal officer Brad Smith meets Judiciary Antitrust SubCommittee:
Microsoft chief legal officer Brad Smith met the house Judiciary Antitrust SubCommittee last year. He briefed the panel on concerns about the App Store and its fees. This happens around the time when Apple commissions a study that a 30% cut was an industry standard. It is difficult to look at the Microsoft PC gaming fee cut this week. But it is difficult to notice a timely push that highlights the disparity within PC and mobile app stores.
