Microsoft has cut its revenue share from 30% to 12% on the Windows Store. Will Valve follow suit?
Microsoft will slash its platform fees on the Windows Store starting August 2021, the New York Times has reported. This comes in the background of the ongoing lawsuit between Epic Games and Apple Inc.
Developers can now keep 88% of their revenue and Microsoft will keep the remaining 12%. This is a drastic reduction from the previous 30% cut for the online store.
Microsoft cuts its revenue share, lures developers
As part of our commitment to empower every PC game creator to achieve more, starting on August 1 the developer share of Microsoft Store PC games sales net revenue will increase to 88 per cent, from 70 per cent. A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.Matt Booty, head of Xbox Game Studios at Microsoft.
Microsoft, like many other stores used to take a 30% cut of all sales on the Windows Store. Recently, game developers have been pushing back against this number. Several developers allege that the platforms should not be taking such a high percentage of revenue cut. Epic Games recently released its own games store and has also taken Apple to court, alleging the phone maker abused its dominance in the mobile apps market.
Epic Games takes a 12% cut on sales via the Epic Games Store. The higher developer revenue share has been a driving force for more exclusive games on the store. The Epic Games Store is slowly emerging as a worthy challenger to Steam’s dominance in the PC market.
What does this mean for the future of PC Gaming?
The changes will only affect PC games and not the Xbox Console games in the Microsoft store. This move is also an attempt to increase the appeal of the PC games store. With a higher developer revenue sharing, Microsoft hopes to bring more games to its platform. The Xbox developer has adopted a strategy that places the Xbox Games Pass front and center of its business plan.
Steam is one of the biggest platforms for PC Gaming boasting thousands of games across various genres. Valve takes a 30% cut of all sales on its platform, a number that has been at the receiving end of community criticism. Epic Games challenged the monopoly of Valve although it is embroiled in a legal case with Apple. With Microsoft joining the fray when it comes to improving developer revenue, the pressure is now on Valve.
More competition is always good for the consumer. With a higher cut of sales, game developers can find it the business of creating games worthwhile. They will invest