XNA developers looking for a nice payday may have to look elsewhere. In fact, we'll go so far to say creating Community Games on Xbox Live is a terrible way to make a living. According to recent reports, Community Games have sold horribly and left many creators disappointed.
Even Weapon of Choice, which possesses a higher profile than most other XNA titles, failed to convert its buzz into actual sales revenue after selling less than 10,000 units. The game's studio president, Nathan Fouts, expressed it best when he said, "that hurts," which is a general sentiment shared among XNA creators.
As Fouts revealed in his blog post, Microsoft takes a base cut of 30% plus an additional 10-30% for advertising. Simply put, 40-60% of profits goes to Microsoft, and the remainder to the developers.
Less popular games have fared far worse. Mobeen Fikree revealed the disappointing sales for DUOtrix -- out of 7595 downloads, only 157 converted to full-game purchases -- earning him $266 (aka, not even enough to cover the cost of buying a 60 GB Xbox 360 Pro console). Fikree blames the lack of a user-rating system to help promote the cream-of-the-crop in XNA titles.
The ingenuous developers of Solar circumvented Microsoft's indifference by advertising the game themselves. They released a special Flash version through flash portal Newgrounds and received 11,000 views. Sadly, Solar is the exception, not the rule.
A recent report from GamerBytes showed that the combined sales of 27 XNA titles totaled 25,049 units purchased. Only 9.2% of downloaded demos were purchased and unlocked as full games. To put this in perspective, Johnny Platform, the most successful XNA game to date, made less than $6000.
We here at GameFlavor question whether or not Microsoft can honestly justify their 10-30% advertising fee if they don't provide the necessary infrastructure to properly market XNA games and support the hard work of indie developers. Another blow against Community Games is the lack of leaderboards. With community being such a big part of the Live experience, it's strange why XNA titles aren't allowed to have achievements and will not appear on your friends' games list.
The answer is clear -- the bottomline is risk vs. rewards. Ultimately, Microsoft puts money and care into the winning horse. Therefore, Microsoft favors big-name Xbox Live Arcade (XBLA) games over small-time XNA games.
The onus falls squarely on the developers for any chance at success. Developers are under the gun to produce a high selling game despite unfavorable conditions on the Live Marketplace. They must pay upfront costs for things like XNA membership, software licenses, hardware and marketing fees, and contractor royalties.
The revenue distribution structure in its current incarnation makes the XNA environment a difficult place for developers to break even, let alone turn a profit. With such a small payoff, it's hard to balance the books when there are so many overhead costs. Profitability is far off in the horizon.
Andrew Oliver, chief technical officer of Blitz, echoed similar doubts in a recent interview. He doesn't believe independent developers can earn big profits from self-publishing games through digital distribution services like PlayStation Network (PSN), Wii Ware or Xbox Live Arcade (XBLA). Oliver maintained his opinion that indie developers earn more by working with a publisher than flying solo. His company Blitz is currently working with Namco Bandai to publish Invincible Tiger on XBLA and PSN.
Why can't Microsoft see the advantage of creator-owned projects? DC Comics and Marvel Comics both have tremendously successful imprints that feature popular creator-owned comics. DC's Vertigo imprint gave us seminal works of fiction like Garth Ennis' Preacher, Brian Azzarello's 100 Bullets, Brian K. Vaughn's Y: The Last Man, and Bill Willingham's Fables. These authors have given DC Comics worldwide recognition and brought industry acclaim to the Vertigo line of comics. A few of the titles are being adapted into movies and TV series. This sort of publicity certainly benefits both parties.
Distributors have learned first hand how taking risks in small independent films have led to massive paydays. The Passion of the Christ, My Big Fat Greek Wedding, and more recently Slumdog Millionaire are all shining examples.
Microsoft's lack of foresight is troubling. It's becoming more and more obvious the experiment known as XNA has failed. The poor sales figures of Community Games coupled with bitterness over the existing revenue sharing structure have left a bad taste in the mouths of bold entrepreneurs hoping to get fed on fat profits.
Strangely, it was Sony who responded to the wave of unhappiness sweeping through the indie development scene by revealing plans to match development costs for certain games in return for PSN exclusivity. Microsoft can do well to pay attention and take a page out of Sony's Pub Fund playbook if they wish to salvage what good graces they have left in the XNA brand. Under Sony's benevolent auspices, small developers like doublesix might have an easier time finding their road to El Dorado. Unfortunately for many, the oasis at XNA was just a mirage.