GameSetWatch breaks down XBLA royalties cut

With the news that the 70 percent royalties cut for independent developers of Xbox Live Arcade titles had been cut in half, the indie gaming community was irrevocably up in arms, with some XBLA devs even threatening to switch platforms. However, the reasoning behind the cut is not as cut-and-dry as "M$ jus wants moar money" -- according to a recent GameSetWatch report, a number of factors led to the royalty shrinkage.

After a bit of Michael Clayton-esque fact finding, they discovered that the cut only affects first-party indie developers (that is, devs that publish their games directly through Microsoft's XBLA department), and while the returns from their product will indeed be half their original value, Microsoft will now cover many of the fees that the developer must address before their product can be sold -- such as ESRB certification, and localization. Ultimately, this means that their games will cost less to produce, but make less after retail -- slightly better than a flat-out cut, but not much consolation to the Ramen-fueled indie developer.

This article was originally published on Joystiq.