PDA

View Full Version : Microsoft Gives Royalty Breaks To Next Gen Developers



skorp
04-01-2005, 08:28 AM
Senior publishing and development sources leak news that Microsoft has cut its 'per disk' royalty to attract and secure platform-exclusive next gen content.

This morning we were simultaneously shocked and impressed to learn that the house that Gates built has been courting next-gen capable developers and publishers to exclusively create content for Xbox 360, by massively knocking down the cost of the company's per-disk publishing royalty, with one anonymous senior publishing source stating "for a select few there is no per disk royalty". Stunning if true.
If our sources our indeed correct (and these particular ones usually are), this could mean that the financially fortunate company will again operate (for an unknown time) at a financial loss, with the assumed reward being an increased market share through exclusive hosting of as much of the top Next Gen content around as possible. This would also prove to be a double-edged sword, as it would likely limit Japanese rival Sony's options for its upcoming PS3 console.

Just to clarify, Microsoft originally operated - with intention - at a huge loss, by selling its Xbox consoles for less money then the company was making them for - reportedly over 100 notes were lost per console. As a result, the company could sell the console at an affordable price and gain the market share it intended to.
Now it looks like the Redmond Giant is to use a similar strategy, though this time directly aimed at content providers and publishers, through offering a highly tempting reduced per-disk cost deal. Format holders are said to make rather healthy amounts of cash from charging publishers a royalty fee per printed disk - just shy of a tenner per disk last we checked - meaning that even if the game doesn't sell when on a store shelf, the format holder still makes money.

If Microsoft is indeed cutting this figure down and in one apparent case we heard, waiving it completely, then the publisher's risk is reduced massively (that could mean more interesting and original games getting signed kids). In light of current fears that Next Gen games will cost in the double millions, this becomes a very attractive proposition indeed for publishers, and one Sony may have to match (that is if it isn't matching it already) in order to attract future blockbusters.

[EDIT: SOURCE (http://www.computerandvideogames.com/r/?page=http://www.computerandvideogames.com/news/news_story.php(que)id=116837) ]

iloveRPGs
04-01-2005, 08:54 AM
Sounds good. Does that mean games could stay at $50?

Sammael
04-01-2005, 09:03 AM
Link?

maneatingcow
04-03-2005, 04:16 AM
Sounds good. Does that mean games could stay at $50?

Hypothetically speaking, it means games could hit the shelves as low as $40.

What this article means is: Microsoft is lowering their fees for producing an XBox game. For 3rd party publishers that play well, and are generous to the Xbox 360, Microsoft is charging them nothing to release their XBox titles, making the 360 an attractive option to larger publishers/developers. These developers/publishers can either lower their prices, or alternatively, keep them at a steady $50 and reap the benefits of the Microsoft deal.

An Example: Ubisoft wants to release Splinter Cell: Urban Jungle on a next-gen console. Due to the popularity of the franchise, they are certain they can sell 250,000 units (At the least). If Microsoft does not charge them, and they keep the retail price at $50, they just made an additional $1,250,000. Attractive, eh?

Variation-XBA
04-03-2005, 02:32 PM
Good news for everyone basically.
More budget for companies to spend on their development/advertizing if needed rather than worrying to rush things out cause of budget reasons.

GuiltySpark
04-04-2005, 10:53 AM
Hypothetically speaking, it means games could hit the shelves as low as $40.

What this article means is: Microsoft is lowering their fees for producing an XBox game. For 3rd party publishers that play well, and are generous to the Xbox 360, Microsoft is charging them nothing to release their XBox titles, making the 360 an attractive option to larger publishers/developers. These developers/publishers can either lower their prices, or alternatively, keep them at a steady $50 and reap the benefits of the Microsoft deal.

An Example: Ubisoft wants to release Splinter Cell: Urban Jungle on a next-gen console. Due to the popularity of the franchise, they are certain they can sell 250,000 units (At the least). If Microsoft does not charge them, and they keep the retail price at $50, they just made an additional $1,250,000. Attractive, eh?


You have to keep in mind that next-gen games are going to cost WAY more than current gen games. I see this as a great oppurtunity for M$. We'll find out in May if M$ is living up to their side of the deal...

Ninjermy
04-04-2005, 11:02 AM
Great news! I dont think this will mean 40 dollar games because why on earth would they LOWER the price from the current? Expect alot more from future games but expect a same price.