The games bring the money: Microsoft doesn’t earn anything on XBox devices

The games bring the money
Microsoft doesn’t earn anything from XBox devices

Microsoft sells the two new XBox models for 300 and 500 euros – and pays more. That explains a manager of the group, who is questioned as a witness in the process between Apple and the game company Epic.

A basic assumption about the gaming industry was officially confirmed in the process surrounding Apple’s App Store: game consoles are a losing business. In principle, Microsoft does not earn any money selling devices from its Xbox console, said Lori Wright, manager of the software group, in court. Instead, one has to rely on, among other things, withholding 30 percent of the proceeds when games are sold on the platform.

Wright was questioned by lawyers for the game company Epic, who are arguing with Apple over the terms of the app business on the iPhone. The 30 percent levy is a central point of contention in the process. Apple takes them when selling apps and digital content on the iPhone. Epic, on the other hand, wants to run its own app store on the iPhone and not pay a fee to Apple for digital sales. The process could therefore turn the app business inside out.

Apple’s lawyers had confronted Epic boss Tim Sweeney with the fact that his company had no problem with paying a fee in the same amount to console vendors. Sweeney countered that the consoles were messing up while the iPhone was highly profitable. When questioning Wright, the Epic attorneys evidently aimed to substantiate this thesis.

One of the questions in the process is whether the iPhone can be seen as an independent market for game apps. Epic takes this view and accuses Apple of abuse of a dominant position. The iPhone company replies that you have to consider the entire game business including consoles instead. Epic is known among other things as the developer of the popular online game “Fortnite”.