Dabe Alan

Xbox One vs. indies: Microsoft bullies developers into signing with publishers, and it needs to stop

Xbox One vs. indies: Microsoft bullies developers into signing with publishers, and it needs to stop

Microsoft doesn’t allow developers to self-publish their games on the Xbox 360, nor will it be allowed on the Xbox One. There’s been much talk about this limitation, but few really understand what it means, or why that decision not only screws over indies on the Xbox One, but the PlayStation 4 and PC as well. Microsoft, in one very broad stroke, has made it much harder for smaller developers to operate in gaming as a whole.

You need to either pay us, or pay them

To explain why, I caught up with Brian Provinciano, who released the game Retro City Rampage on damned near every service and console there is. He gave an illuminating talk about what he learned from the experience, and he’s become an outspoken critic of Microsoft’s policies. His platform summary for Xbox Live Arcade was short, and to the point: “Most expensive, a bottleneck, damaged PR, hindered other platforms’ success.”

“Self-publishing basically means that the developer can release their game directly to the stores without a middleman,” Provinciano explained. “We're able to sign straight distribution agreements with them, we get a simple revshare, and that's that.” The problem is that Microsoft does not allow developers to self-publish, you have to have a third-party publisher, or you can be published by Microsoft Studios.

So you have to pitch Microsoft Studios if you want to be on Xbox Live Arcade, and the negotiations and contract portion of this process can take six to nine months, according to Provinciano, if not more.

“Like any publisher, Microsoft Studios takes more from you than a simple platform revshare,” he said. “In addition to their publisher cut, Microsoft Studios also requires at minimum a timed exclusivity, so you won't be able to release on other platforms day one.”

So you end up with less of the revenue for yourself, Microsoft gets a cut as the publisher and the platform holder, and you have to be exclusive to the platform for a set amount of time. Or you can go through a third-party publisher, since Microsoft will only allow companies that release retail games to have slots on Xbox Live.

Microsoft’s push for an all-digital future is fine, but if you’re an all-digital company? You better find a publisher who does release retail games, and be willing to give them a cut of your revenue if you want to release your game on Xbox Live. It’s a hopelessly backwards system.

Paying to avoid exclusivity

But you can go with a third-party publisher for your Xbox Live release if you want to avoid being forced into timed exclusivity. Here’s the catch: Most publishers can’t, or won’t, sign a deal to publish just on Xbox Live. They want a cut of everything your game sells, on every platform.

“They feel that if they're publishing your game, they want to be the end-all-be-all publisher,” Provinciano said. “They want to publish all platforms, even those which you could self-publish on.”

“Long story short, this means that on all other platforms, you're needlessly giving a chunk of your revshare to a publisher for nothing more than the ability to get your game onto Xbox and the freedom to release on the other platforms, which you can already self-publish on, at the same time,” he stated.

Think about how fucked up this situation is: small developers end up in a situation where they have to pay a third-party company to avoid Xbox exclusivity. Or they can avoid Microsoft's system altogether, leading to fans complaining that the game isn't on their favorite platform. Both the developers and the fans lose due to Microsoft's arbitrary rules.

“The average consumer assumes Microsoft's paying developers for exclusivity, when NOT ONLY is that NOT the case, it's completely flipped around. Developers are essentially the ones paying to AVOID exclusivity,” Provinciano explained, emphasis his. “Developers get a lot of negative PR and hate from fans when they announce that their game is coming to Xbox first. Fans slam developers for taking 'money bags' instead of supporting other platforms, which as you can see isn't what's going on at all. Many consumers perceive this as developers choosing Xbox because it's 'the better platform.' That's the intention.”

Other developers are talking openly about their disgust with Microsoft’s policies, including Oddworld Inhabitants’ Lorne Lanning. Sony put the latest version of Oddworld in its presentation, while Microsoft won’t let the game on the Xbox One unless Lanning is willing to bring in a company and give them a chunk of the profits.

Here’s the problem: The game has no need for a publisher. “Why do we need a publisher when we self-finance our games, we build our own IP, we manage our own IP and we've turned nearly two million units online as indie publishers sold - not free downloads?” Lanning asked in an interview with Eurogamer. “Why? What's wrong with us?” Right now the game simply isn’t coming to the Xbox One.

This policy has other unintended consequences, with publishers often “renting” their Xbox Live slots to smaller developers for a straight payment. That system only works because Microsoft has created artificial scarcity with their online games, with rules that are designed to benefit big publishers.

You have to pay someone a cut of your revenue if you want to release on an Xbox platform, even if you have zero need for any of the goods or services being provided. Microsoft has it basically mobbed up: You need to pay a tithe to Microsoft Studios or a third-party developer if you want to be on the platform, and it's likely to cost you more money to avoid Xbox Live exclusivity. The digital future Microsoft is promising only applies when they want to limit how you play your games, if you're a purely digital company bringing your games to the Xbox One, it's going to cost you.

Microsoft stands alone

Regardless of Microsoft's promises at E3, the Xbox One remains a console that is openly hostile to smaller developers and indies. Sony threw a party at GDC to celebrate its relationship with smaller developers, inviting notable smaller developers and personalities to mingle and play games.

Sony's Adam Boyes listed the PlayStation 4's policies like the company was throwing down the gauntlet: Indies are allowed to publish their own games, so the only money paid out to Sony is the standard cut for the platform holder. You can update your game for free, as patches won't cost anything. If you have a good game and can't afford a dev kit, Sony will hook you up.

Microsoft's response: Why change what wasn't working? The system stacks the deck against smaller developers, and helps big publishers dip their beak into the work of indies who don't actually need their help. Microsoft is setting up a number of roadblocks to releasing your game on their service, and they're taking money away from indies in exchange for “services” they don't need. Developers are beginning to speak out against the practice, and many are simply turning their back on the Xbox One.

“Alternatively, when self-publishing on Nintendo or PlayStation for example, you simply make your game, submit it into their system, submit it into certification, get your full revshare and that's about it,” Provinciano said. Smaller developers increasingly don't need publishers, although Microsoft is trying to bully them into signing with one anyway.

After talking with a variety of small developers and, while many aren't comfortable with directly critcizing Microsoft, nearly all of them expressed their appreciation for Sony's approach. It allows them to make more money, to maintain control of their games, and to continue doing business. Microsoft's policy may make sense now, but it's only going to hurt them in the long run, as more developers speak out and leave Microsoft's platforms altogether.

It's time for the Redmond giant to realize the world has changed, and to change its policies in response. Forcing smaller developers to lose part of their profits and freedom to publishers just to be on your console is backwards, wrong, and borderline corrupt.