The Epic vs Apple trial that shook the world of apps came with some astounding revelations. One such was from Microsoft, which was roped in the legal battle to justify its 30 per cent cut from developers on in-app purchases made on the Xbox store. The tech major, in its defence, had confirmed to the court that it never generated any profits from the sale of Xbox consoles. The cut from the purchases of and within its apps and games, thus, was the only source that helped it break even.
It seems like Microsoft will now let go of this business model. The company has come out with a set of guidelines, under the title “Open App Store Principles,” that will frame the working of the Xbox console store going forward. Out of a total of 11 principles, seven have already been put into effect on the platform. The guidelines had already been active for Microsoft Store on Windows.
These guidelines regulate the quality and safety standards of the apps, as well as try to ensure fair play on the Microsoft-owned app stores so that the company’s own apps are not preferred over those by other developers. It is, however, the remaining guidelines – not implemented yet – which are intriguing many around the world.
In the 8th principle in the company’s new blog, Microsoft president Brad Smith writes that Microsoft will not require third-party app developers to use the company’s payment system to process in-app payments. In the following points, he also mentions that the company will not put an app or its developer at a disadvantage if any of them choose to do so.
It is not yet clear whether Microsoft will still take a commission if the app developers start using a third-party payment system for their customers. After all, we have seen Apple offer the capability to its App Store developers after a lengthy legal battle, but the company clearly mentioned that it will still take the cut.
So, there is a chance that Microsoft will follow the trend. However, it would make no sense to bring in the ability if developers do not benefit from it. It is thus likely that both Microsoft and Apple will take a reduced cut from developers opting for third-party payment on their app stores. Microsoft may follow its 12 per cent commission strategy that it introduced to PC gaming last
The guidelines are in direct compliance with what Epic, and many others, had been demanding in the first place – a smaller, if not zero, cut for the app store provider from in-app purchases. Having defended its position for the past two years, Microsoft now seems to have thought it best to change its business model with the rising demand of the same.
What is even more interesting, is that the company has decided to do so when there is no law demanding it as yet. In the blog, Smith writes that Microsoft will “incorporate the spirit of new laws even beyond their scope.” So while we await such legislation for app stores of smartphones and PCs, Microsoft will also hold its gaming console to the high regard.
The principled approach is sure to put pressure on others like Apple and Steam to follow. Just a few weeks earlier, Microsoft even announced that it will continue the availability of Call of Duty and other major gaming titles across rival platform PlayStation, despite spending $68.7 billion to acquire its maker, Activision Blizzard. It says in the blog that these decisions will help create an “open app market” and better serve its users and creators. It is easy to see how the company is striding towards these goals and will soon be a beacon of hope for the digital world at large.