7 ms·

That sounds about right, although 5% (or 15%) is a pretty good deal IMO for worldwide payment processing, installer and update distribution, DRM, and their buil

That sounds about right, although 5% (or 15%) is a pretty good deal IMO for worldwide payment processing, installer and update distribution, DRM, and their built-in tools like crash reporting, push notifications, analytics, affiliation, and attribution.

valuearb 8y ago
It’s insanely good deal. MSFT has to be losing money on that.
- AlexandrB 8y ago
  What? How? Of the services on offer, only payment processing has significant cost to Microsoft. Things like crash reporting are solved problems whose cost should be approximately equal to the cost of hosting the data.
  - ductionist 8y ago
    I'd add hosting on top of that - like Apple, Google, etc., they don't charge you for distributing your app (which could be hefty, per paid transaction, if you have a low-converting trial or freemium app).
    - deleted 8y ago
      [deleted]
  - busterarm 8y ago
    PayPal has established the absolute rock-bottom industry-floor of 2.9% + $0.30 for payment processing + fraud reduction. Fraud reduction accounts for the majority of that percentage. Patreon has established that they will completely go out of business at 5%. Steam is taking 30% and Epic is taking 12%. Salaries, servers and regulation are expensive. Microsoft offering 5% is a steal.
    - SkyPuncher 8y ago
      > PayPal has established the absolute rock-bottom industry-floor of 2.9% + $0.30 for payment processing + fraud reduction. This is neither unique to PayPal or the actual floor. 2.9% + (roughly) $0.30 is pretty much the standard across all public facing credit card processors like PayPal (and their subsidiary Braintree), Stripe, Amazon Pay, Authorize.net, and more. I have heard rumors Stripe offers rates as low as 1.8% for large volume processors. Adyen charges $0.12 + 0.6% + interchange fee making them extremely lucrative for their customers (including Uber, Netflix, Etsy, Spotify). Given Microsoft's size and expertise, I'd anticipate they are operating close to interchange rates around $0.10 + between 0.8% and 1.6%.
      - martinald 8y ago
        In Europe Stripe offers 1.4% + 25eurocent for EU cards, with the same 2.9% for non EU cards. Stripe actually charges US customers an extra 1% to process EU cards (3.9% total), plus a hefty forex fee. For a company like MS with a major EU presence the average rate will be skewed lower than what the market looks like.
      - StudentStuff 8y ago
        The actual cost for credit/debit card processing is interchange itself, which averages to ~1% for grocers & about 2% for everyone else if your doing north of $200k a year in volume. High risk industries like cruises, concerts & similar will pay close to 5% (or more), as when the event doesn't pan out, all that cash will need to be refunded.
    - flyinglizard 8y ago
      Fraud reduction is largely irrelevant on non tangible products though, especially when licenses can be revoked online.
      - greglindahl 8y ago
        Fraud reduction includes having to refund money, not just revoking licenses if the payment is reversed.
  - valuearb 8y ago
    Even if Hosting many terabytes of data and paying for thousands of terabytes of downloads worldwide was free, people aren’t. It takes people to build and maintain hundreds of store fronts, localize them in dozens of languages, run marketing programs, provide support, developer tools, etc, etc, etc.
- no_wizard 8y ago
  Like all digital goods, the marginal cost of MSFT doing this is zero. I don't think they are losing money on this, in terms of pure margins, its probably quite lucrative (though in absolute revenue, maybe not so much).
  - asdfasgasdgasdg 8y ago
    Credit card processing is not a digital good, per se. Microsoft has to pay Visa and Mastercard their x% + y cents, and has to deal with returns and fraud and whatnot. Which is not to say that they're losing money, but this isn't the true zero-marginal-cost scenario like a Google web search.
    - no_wizard 8y ago
      Truly though in accounting terms I think it falls under fixed negotiated cost and not marginal the fees are known and negotiated as a flat rate and adjusted gross selling prices reflects that so selling more goods does not increase the price of that cost
renholder 8y ago
>...and their built-in tools like crash reporting... I'm assuming you mean if it has Azure Analytics packaged into it? Otherwise, I've never heard of WER (read: Watson) being available external of Microsoft; which could have been (and still could be, plausibly) a huge trove of information (if we're talking purely on a bug trends for various devices/flavours perspective).
- smileybarry 8y ago
  If you're registered on their developer portal, you can upload public symbols (exports only) of your builds and receive stacks & problem signatures of any matching WER dump. I work for a small-to-mid-sized infosec company (with no special Microsoft partnership) and we've gotten WER crash reports of our UI component this way.

valuearb 8y ago

It’s insanely good deal. MSFT has to be losing money on that.

AlexandrB 8y ago
What? How? Of the services on offer, only payment processing has significant cost to Microsoft. Things like crash reporting are solved problems whose cost should be approximately equal to the cost of hosting the data.
- ductionist 8y ago
  I'd add hosting on top of that - like Apple, Google, etc., they don't charge you for distributing your app (which could be hefty, per paid transaction, if you have a low-converting trial or freemium app).
  - deleted 8y ago
    [deleted]
- busterarm 8y ago
  PayPal has established the absolute rock-bottom industry-floor of 2.9% + $0.30 for payment processing + fraud reduction. Fraud reduction accounts for the majority of that percentage. Patreon has established that they will completely go out of business at 5%. Steam is taking 30% and Epic is taking 12%. Salaries, servers and regulation are expensive. Microsoft offering 5% is a steal.
  - SkyPuncher 8y ago
    > PayPal has established the absolute rock-bottom industry-floor of 2.9% + $0.30 for payment processing + fraud reduction. This is neither unique to PayPal or the actual floor. 2.9% + (roughly) $0.30 is pretty much the standard across all public facing credit card processors like PayPal (and their subsidiary Braintree), Stripe, Amazon Pay, Authorize.net, and more. I have heard rumors Stripe offers rates as low as 1.8% for large volume processors. Adyen charges $0.12 + 0.6% + interchange fee making them extremely lucrative for their customers (including Uber, Netflix, Etsy, Spotify). Given Microsoft's size and expertise, I'd anticipate they are operating close to interchange rates around $0.10 + between 0.8% and 1.6%.
    - martinald 8y ago
      In Europe Stripe offers 1.4% + 25eurocent for EU cards, with the same 2.9% for non EU cards. Stripe actually charges US customers an extra 1% to process EU cards (3.9% total), plus a hefty forex fee. For a company like MS with a major EU presence the average rate will be skewed lower than what the market looks like.
    - StudentStuff 8y ago
      The actual cost for credit/debit card processing is interchange itself, which averages to ~1% for grocers & about 2% for everyone else if your doing north of $200k a year in volume. High risk industries like cruises, concerts & similar will pay close to 5% (or more), as when the event doesn't pan out, all that cash will need to be refunded.
  - flyinglizard 8y ago
    Fraud reduction is largely irrelevant on non tangible products though, especially when licenses can be revoked online.
    - greglindahl 8y ago
      Fraud reduction includes having to refund money, not just revoking licenses if the payment is reversed.
- valuearb 8y ago
  Even if Hosting many terabytes of data and paying for thousands of terabytes of downloads worldwide was free, people aren’t. It takes people to build and maintain hundreds of store fronts, localize them in dozens of languages, run marketing programs, provide support, developer tools, etc, etc, etc.
no_wizard 8y ago
Like all digital goods, the marginal cost of MSFT doing this is zero. I don't think they are losing money on this, in terms of pure margins, its probably quite lucrative (though in absolute revenue, maybe not so much).
- asdfasgasdgasdg 8y ago
  Credit card processing is not a digital good, per se. Microsoft has to pay Visa and Mastercard their x% + y cents, and has to deal with returns and fraud and whatnot. Which is not to say that they're losing money, but this isn't the true zero-marginal-cost scenario like a Google web search.
  - no_wizard 8y ago
    Truly though in accounting terms I think it falls under fixed negotiated cost and not marginal the fees are known and negotiated as a flat rate and adjusted gross selling prices reflects that so selling more goods does not increase the price of that cost

renholder 8y ago

>...and their built-in tools like crash reporting... I'm assuming you mean if it has Azure Analytics packaged into it? Otherwise, I've never heard of WER (read: Watson) being available external of Microsoft; which could have been (and still could be, plausibly) a huge trove of information (if we're talking purely on a bug trends for various devices/flavours perspective).

smileybarry 8y ago
If you're registered on their developer portal, you can upload public symbols (exports only) of your builds and receive stacks & problem signatures of any matching WER dump. I work for a small-to-mid-sized infosec company (with no special Microsoft partnership) and we've gotten WER crash reports of our UI component this way.