Xbox Boss Phil Spencer Thinks 30 Percent Cut Is Reasonable For Console Stores

Phil Spencer
Phil Spencer The Nerd Stash

The 30 percent fee for online stores has been a standard in the industry for a long time. Every major company out there, be it Microsoft, Google, Apple, or Sony, all of them (with the exception of Epic Games) take 30 percent of every sale on their platform. However, things have been changing.

As previously mentioned, Epic Games launched their own Store where they only take 12 percent of every sale. That’s one of the reasons that the Store has been growing constantly and maybe becoming a threat to the monopoly created by Steam. Steam used to take a 30 percent cut no matter what, however, they reduced this slightly if a game sells a large number of copies. Epic Games is also currently in a lawsuit with Apple regarding the same issue.

Microsoft and Sony have received some criticism over their rigid 30 percent policy. However, Xbox boss Phil Spencer thinks it’s not fair to compare Xbox and Sony with Google and Apple. Xbox and Sony Online Stores are exclusively set for video games that will run on their platform only. According to Spencer, companies sell their consoles at a loss and they turn a profit with games and services. So, the 30 percent cut is a necessity for feasibility. The more consoles a company like Sony or Microsoft sells, the more losses they suffer. However, it’s the sale of games that gives them a profit.

“If I can put Game Pass on iOS … if you just look at the scale, there are a billion mobile phones on the planet. Those are general compute platforms. A game console does one thing really; it plays video games,” Spencer said in an interview with The Verge. “It’s sold, for us, at a loss. Then you make money back by selling content and services on top. The model is just very, very different from something [on] the scale of Windows, or iOS, or Android.”

So what do you think? Do you think that a 30 percent cut is reasonable? Or do you think it should be less? Let us know your thoughts in the comments section below.

Join the Discussion
Top Stories