PMDG products coming to Marketplace | Steam gets paid 35% for marketplace addon sales

EDIT: please check the post below for the latest marketplace cost structure update by Robert.

PMDG confirmed that their products will be listed on the marketplace. However Robert revealed some information regarding the cost of placing products in marketplace.

" Folks,

Please allow me to add a bit of clarity here to this discussion, as it does seem that there is quite a bit of conjecture and opinion. We haven’t talked too much about our plans for MSFS Marketplace simply because we have been focused on other tasks.

Will PMDG Products Appear in the Marketplace?:
PMDG fully intends to have our products available in the MSFS Marketplace. A small developer like PMDG can gain a much wider market exposure through placement in the MSFS Marketplace, and thus we anticipate fully participating.

How long until this happens?:
We have not yet decided. There are a few factors playing into this decision right now, and the decision is entirely analytical with the goal of ensuring a smooth customer experience above all other factors. We really only have a single concerning factor here, and that relates to our flexibility in updating the products that customers purchase. The normal update lifecycle for a PMDG product is that we release the product and then update it rapidly in response to service reports during the period following release. The rate of updates tends to start out high and the reduce over time because we are simulating a highly, highly complex piece of machinery, often times with very advanced systems and computational processes that sometimes do an effective job of masking problems until the software is employed on a wide array of customer installations. Thus, we tend to work in overdrive to tamp down any issues that appear initially, but the update rate slows dramatically the further you move out along the release timeline, as you would expect.

To facilitate this, we have long used our PMDG Operations Center application to distribute updates to customers. This tool allows us to employ a rapid update cycle to PMDG products that allows us to quickly identify, resolve, test and push fixes for problems in our aircraft in order to ensure a uniform, stable customer experience. This is the primary method for updating PMDG products and has proven to be reliable, quick and simple for the vast majority of PMDG customers.

Unfortunately, there are some technical reasons that prevent us from updating Marketplace originating installations. If we wish to push an update to customers, we can easily hand it to PMDG.com originating customers within minutes, but the update for Marketplace originating customers will take days-to-weeks depending upon the flow of bits through Microsoft’s pipeline. This isn’t some evil plot on the part of MSFS, it is simply an offshoot to how the Marketplace distribution mechanism works.

For this reason, we feel it is highly important to ensure that a product is stable and down to a low-rate of updates before we hand it to the marketplace, and this will be a driver in the decision to begin pushing any PMDG product to the Marketplace. The moment we feel stability is sufficient to allow us to absorb the longer lead-time required for Marketplace update cycles, we will put the product in Marketplace.

What is the Truth About Costs?:
Placing a product in Marketplace is expensive. When an MSFS user purchases a product from Marketplace, Microsoft and sometimes Valve gets paid. For MSFS users who purchased MSFS via MS-Store, Microsoft will take a 30% share. For MSFS users who purchased MSFS via Steam, Valve will take 35% and then MS will take 30% of what remains (effective rate of 54% give-or-take.)

Before anyone howls too loudly: MSFS wasn’t developed on a shoe-string budget, and it exists because Jorg Neuman was able to convince the corporate hive that it would make money. It is in all of our best interest if it makes money- and Jorg’s team, in combination with Asobo have created an environment in which the potential market for products is so significantly larger than the old market that developers like PMDG can be quite healthy if we deliver quality products.

I am less enthusiastic about the value equation of Valve’s contribution, but there is an old saying about “you cannot fight City Hall.”

What About Pricing?:
Pricing will be the same across PMDG.com and Marketplace. Product functionality will be the same across PMDG.com and Marketplace. In a perfect world, you should only notice a difference in the update process and the update cycle time- and if we have done our work properly- you may not even notice that lag.

Okay- so I didn’t read Any of That: When Will DC-6 Be in Marketplace?:
We cannot say at this time, as we haven’t decided yet. It will depend upon our opinion product update stability.

There are many folks with many opinions about whether you should purchase from a developer directly or if it is better to purchase from the Marketplace store. To those of you waging argumentative battle with one another, I offer this:

Do what is best for you, as that is the correct solution for you"

Source: https://forum.pmdg.com/forum/main-forum/general-discussion-news-and-announcements/130066-msfs-in-game-store#post133325

21 Likes

I don’t know how I feel about steam taking 35% cut which is more than what Microsoft takes. Steam users should really consider buying add-ons directly from the developers.

EDIT: New Update by Robert:

"Folks-

I received some updated information this afternoon on the various cost structures and I think it is important to update the information to give you guys an idea what is taking place on the back-end of things.

My original numbers were based upon information/conversations that have changed since our last review of this data. Microsoft made changes to the fees they charge developers in order to put less strain on the sale of third party products through the steam channel. That is not an insignificant move, I should point out. When you hear me talking about how Jorg’s team has been trying to build a simulation environment that embraces small developers, it is things like this that I am pointing to…

I have also been reminded that Valve has a “reducing scale” that gets triggered after certain revenue tiers are exceeded in sales within the MSFS channel. The initial tiers have been exceeded, so costs are reducing all across the steam channel, which is beneficial for everyone involved.

Net costs to developers like PMDG will have dropped from ~54% to ~36% a bit later in the summer. That is a big deal on our end and it puts costs for distribution within the margin of error for what we product and how we distribute.

Overall, PMDG very much wants to see Marketplace be profitable as this promotes continued growth and investment in the platform. To the extent that Microsoft is working to keep costs in line, I think the future looks quite promising."

This statement suggests that Steam will not be taking 35% anymore. Starting this summer, all marketplace add-on developers will be happy :slight_smile:

19 Likes

If I had known this I would not have bought the sim in Steam, I don’t want steam taking a 35% of the money I want to give to PMDG or Microsoft. I knew steam took 30% of the base game, but taking money from the marketplace seems abusive.

Asobo should look for a way to allow current steam users to move to Microsoft Store if they want, so we can spend our money in their platform from now on.

7 Likes

What about support, I don’t mind buying direct but if support ends, let’s say after a year I suspect they can’t end support when using marketplace.

Microsoft and Asobo should redevelop the market place ASAP to allow for more efficient update cycles. At the end of the day, Microsoft owns GitHub. I would much prefer to buy all of the add-ons in one place inside the sim, but waiting for weeks or even month to catch up with the latest update is not fun.

PMDG mentioned that they expect less experienced users to buy via the marketplace and that they might not be in as much of a hurry for updates as those who buy direct (its a large assumption but has some merit?) This allows a sort of ‘fast ring / slow ring’ situation where the marketplace buyer should be less likely to have a bugged product (as we see with this initial release of their DC-6 as a patch is inbound by this weekend)

Those marketplace & cuts are large but should offest by the huge amount of customers it will bring. Another assumption , I know … !

While it is indeed a factor, from a financial point of view, PMDG should not yet release on the Marketplace.
They are trying to make as many users as possible buy the plane directly from their own store, thus not loosing 30% of the profit.
Once most people have bought the plane directly from them, then, they will release in the marketplace, so the rest of the community can get it there.

It is the most intelligent decision imo, they maximize profit and it allows for easy patching.

1 Like

I’m buying from the marketplace probably if the price for me as a customer is the same. I have bought several PMDG products in the past, can’t find them anymore as they must be on the older pc’s or harddisks.

why? the steam store and all its features don’t exist for free. no other storefront even comes close.

2 Likes

Yeah but 35% for a storefront??? That’s highway robbery!

7 Likes

It is normal that company’s like Valve (Steam) or Epic are taking a cut for stuff in their store. If a Steam user is buying a currency for MSFS than of course Valve gets a cut and MS gets a cut for the marketplace. The only one to blame would be MS for taking the deal with Valve.

1 Like

there’s no choice no one uses the windows store

I already bought the NGXu for P3D because PMDG promised that when the MSFS version would arrive I would only have to pay the price difference. Since these kinds of constructions (coupons) are not available in the Marketplace, I will buy from PMDG directly in this case.

Note to myself as always.
ALWAYS BUY AEROPLANES outside MS

4 Likes

Microsoft gets a lot of hate for taking 30% cut from add-ons but the real culprit here is Steam. I wish more users are informed about this.

2 Likes

This is exactly why i didn’t buy on Steam. Steam adds no value to MSFS… ZERO.

As for PMDG or any other addons, I will ONLY buy through the Marketplace. I don’t care about slow updates. Take advantage of the hype around the product to sell more now. In 6 months I probably won’t care enough to buy it anywhere anymore.

8 Likes

Why is Valve the bad guy? Microsoft accepted the terms. They could have said no if it’s that evil.

3 Likes

Release it on the marketplace. Use the huge HTML product page to clearly state that updates to the marketplace version will be slower or less frequent and let the customer decide!

Unless it is just about the money, i don’t see a valid reason for not releasing the marketplace version now.

1 Like

I don’t understand why Microsoft made the sim available on Steam. Who has Steam has Windows, therefore also has MS Store. Moreover who purchases MSFS on the store can play it on XBox in the future. This, also, was not advertised enough.

1 Like

It was an intelligence test.

2 Likes