Microsoft revealed a series of app store principles yesterday, similar to their manifest from two years ago. Brad Smith said these regulations are designed to ensure they provide “the best possible experience for creators and customers of all sizes.” Note that some of those principles only fit Microsoft’s Windows store.
“Emerging legislation is not being written for specialized computing devices, like gaming consoles, for a good reason. Gaming consoles, specifically, are sold to gamers at a loss to establish a robust and viable ecosystem for game developers. The costs are recovered later through revenue earned in the dedicated console store.”
Brad Smith, Vice Chairman and President of Microsoft.
Take it from one step behind: This change of ideology is mainly to reassure the regulators looking at the company after its deal with the $68.7 billion acquisition of Activision Blizzard. The effort behind the change is for adjusting regulatory changes and giving the federal government to sign off on the acquisition.
Why are the regulators alarmed? Regarding Xbox, Microsoft doesn’t earn a substantial profit on sales of these consoles. Instead, they make money from “in-game sales and online service subscriptions.” Microsoft takes a cut in all of the in-game purchases under its subscription. Microsoft says that this subscription relied on the business model will be altered, to assure the regulators seek it. “We recognize that we will need to adapt our business model even for the store on the Xbox console,” admits Smith.
“… We recognize that the emerging new era of tech regulation brings with it both benefits and risks, not just for a single company but for our entire industry. As others have pointed out, there are risks with any new regulation, and these deserve a fair hearing and thorough consideration. But as a company, we continue to be more focused on adapting to regulation than fighting against it. In part this is because we have been adapting for two decades to antitrust rules, and we’ve learned from our experience. While change is not easy, we believe it’s possible to adapt to new rules and innovate successfully.”
Like Apple’s cut from App Store, Microsoft takes a 30 percent cut on digital game purchases through its Xbox store. However, it hinted that its Xbox store would be more open, changing its business model.
It’s unclear when the Xbox Store will be liberated further. Microsoft says it’s now building a “next-generation game store” based on these new principles. The changes might include a reduction of its Xbox store cut. This kind of reduction is something it has previously explored as Microsoft reduced Windows store cut to just 12 percent and the firm had been planning to reduce its Xbox store cut to just 12 percent as well.
We know that Microsoft already applied these first seven principles to the Xbox:
Quality, Safety, Security & Privacy
- We will enable all developers to access our app store as long as they meet reasonable and transparent standards for quality and safety.
- We will continue to protect the consumers and gamers who use our app store, ensuring that developers meet our standards for security.
- We will continue to respect the privacy of consumers in our app stores, giving them controls to manage their data and how it is used.
Accountability
- We will hold our own apps to the same standards we hold competing apps.
- We will not use any non-public information or data from our app store to compete with developers’ apps.
Fairness and Transparency
- We will treat apps equally in our app store without unreasonable preferencing or ranking of our apps or our business partners’ apps over others.
- We will be transparent about rules for promotion and marketing in our app store and apply these consistently and objectively.
