Microsoft is most likely finally recognising that the Microsoft Store platform had problems, and now it’s planning to fix a few of those things – starting with gaming. Announced earlier today, Microsoft has stated that from August 1, the tech major will charge only a 12 percent revenue split instead of the previous 30 percent split that it used to charge game developers for listing PC games on its app marketplace, Microsoft Store. The move is being seen as a significant one as it gives Microsoft at least one clear upper hand on Valve’s Steam and Epic Games’ Epic Store, which are two of the most popular PC game marketplaces in the world right now.
Writing on the official Xbox blog, Matt Booty, head of Microsoft’s Xbox Game Studios, clearly underlined the services driven future vision that the company adopted ever since company chief Satya Nadella took over. “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%, from 70%. A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so,” writes Booty. A more in-depth look at Microsoft’s developer relations when it comes to the revenue split can be found here.
With this, the company has come up with ways to take on Steam and Epic Store. The former still charges game developers a 30 percent share of revenue for the most part – until a game starts making considerably more money. Steam had only revised its revenue split after attracting its own share of criticism from the developer community, but even that too has had mixed reactions – Valve presently reduces the revenue share to 25 percent only after a game crosses $10 million in net sales, and 20 percent after a game crosses the $50 million mark. Epic, meanwhile, has long been appealing to game developers with a much lower 12 percent revenue split – something that Microsoft has now arrived at.
This is an interesting moment in the overall scheme of things, as Microsoft clearly underlines that it hopes to generate revenue mainly through software, and not hardware sales. On that front, the company is sticking true to its word as the Xbox gaming consoles are largely subsidised in terms of pricing, and the large chunk that Microsoft earns from its hardware sales are through game sales. The 30 percent revenue split figure remains the same on the Xbox store. On PC, though, with a more open ecosystem, consumers clearly have more choices, and that’s where Microsoft is focusing right now.
As part of a larger revamp, Microsoft is said to be looking at a much wider overhaul of its Store. This will include newer game tools for players to collaboratively play over, sharing and social tools similar to what Steam and Epic already provide, and so on. The revenue split revision, therefore, looks to be an interesting offer from the company to developers, who really won’t be miffed about having to shell out much lesser money to Microsoft for selling copies of their hard work and effort.
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