Microsoft increases developer share of Microsoft Store PC game sales to 88 percent

Shawn Knight

Posts: 13,177   +132
Staff member
What just happened? The Game Developers Conference (GDC) in its ninth annual State of the Industry Survey this week revealed that only three percent of polled developers believe the "standard" 30/70 revenue split with digital storefronts is fair. Soon after, Microsoft announced a major change to its revenue split program with devs.

The Epic Games Store bucked the trend when it launched in late 2018, offering to let developers keep a full 88 percent of the money made from their games. Now, Microsoft is following suit after the GDC report.

Matt Booty, head of Xbox Game Studios, said they are updating their Microsoft Store terms for PC game developers. Starting August 1, devs will take home 88 percent of their games’ net revenue, which is up from 70 percent.

“A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so,” Booty said.

Notably, the change only applies to PC games sold on the Microsoft Store, and does not impact console games.

Steam, the leading PC games distribution platform, updated its distribution agreement in late 2018 to allow developers with successful games to take home a larger cut when surpassing certain milestones. Apple in November 2020 said it would be trimming App Store commission fees to 15 percent for devs that make less than $1 million per year. Google last month said it would be slashing commissions in half for developers’ first $1 million in sales.

Image credit Gorodenkoff, Casimiro PT

Permalink to story.

 

m4a4

Posts: 2,364   +2,648
TechSpot Elite
Notably, the change only applies to PC games sold on the Microsoft Store, and does not impact console games.
I don't exactly expect them to touch that one either (without a bigger catalyst), considering consoles are sold at a loss. That would be seen as the tradeoff.

Though, I'm wondering if that affects the "Play Anywhere" program (buying on the PC Store and getting it on Xbox). I'm assuming it would......
 

Neatfeatguy

Posts: 300   +431
Who uses Microsoft Store.

Not me, but that appears to be the point for MS here. Drive sales.

Really, what is the MS Store? Simply servers they already maintain. If they want more traffic and business from gaming, what better incentive than to let devs keep the majority of money made from selling their products on MS's store?

If you're a newer developer and you sell your new game at $30.
You post your game on the MS store and sell 50,000 copies; That's 1.5mil. Keeping 88% of that means 1.32mil in the developer's pocket.
You post your game on Steam and sell 50,000 copies; That's 1.5mil. Keeping 70% of that revenue means 1.05mil in the developer's pocket.

That's about a 26% difference in overall revenue that the developer gets to keep if they utilized the MS store when compared to Steam.

One could argue that Steam reaches way more people since a lot of gamers use Steam, but on the other hand majority of PC gamers game on Windows and majority of them are on Windows 10 so access to the MS store is available to all of those gamers.

If MS can find a way to entice gamers to start frequenting their store more often, get more game developers to sell there and allow the developers to keep more of the sales over other avenues, such as Steam, it could be a significant shift for developers, gamers and MS.

The major downside is the lack of any kind of gaming interface that gamers get from using Steam. I suppose you could always link your installed game from the MS store to your Steam or Gog Galaxy....
 

terzaerian

Posts: 921   +1,315
Who uses Microsoft Store.
PC gamers that were in diapers when Games for Windows Live was a thing, I imagine; e.g. people that don't know better.

I really just wish Steam would get its act together and try to compete again; they just seem to be sitting on their laurels while their storefront balkanizes and Discord and Twitch eats their lunch on the social end. Every effort they've made to compete with the upstarts has just been to do the bare minimum necessary to imitate them.
 

Theinsanegamer

Posts: 2,452   +3,607
Not me, but that appears to be the point for MS here. Drive sales.

Really, what is the MS Store? Simply servers they already maintain. If they want more traffic and business from gaming, what better incentive than to let devs keep the majority of money made from selling their products on MS's store?

If you're a newer developer and you sell your new game at $30.
You post your game on the MS store and sell 50,000 copies; That's 1.5mil. Keeping 88% of that means 1.32mil in the developer's pocket.
You post your game on Steam and sell 50,000 copies; That's 1.5mil. Keeping 70% of that revenue means 1.05mil in the developer's pocket.

That's about a 26% difference in overall revenue that the developer gets to keep if they utilized the MS store when compared to Steam.

One could argue that Steam reaches way more people since a lot of gamers use Steam, but on the other hand majority of PC gamers game on Windows and majority of them are on Windows 10 so access to the MS store is available to all of those gamers.

If MS can find a way to entice gamers to start frequenting their store more often, get more game developers to sell there and allow the developers to keep more of the sales over other avenues, such as Steam, it could be a significant shift for developers, gamers and MS.

The major downside is the lack of any kind of gaming interface that gamers get from using Steam. I suppose you could always link your installed game from the MS store to your Steam or Gog Galaxy....
From a developers point of view, even if the microsoft store has just as large or a larger install base then steam, the actual audience that buys games from it is still a fraction the size. That's why MS is cutting the margins, trying to get developers onboard.

The UI is several steps behind steam, the featureset is non existent, the lack of a refund policy is a major issue, and I agree the lack of a dedicated game store isnt helping them.
 

brucek

Posts: 803   +1,104
TechSpot Elite
It may not be "fair" but the fact is a game is worth more to me when it is on Steam because of the features and because it is on the one store I regularly use.

If developers want the cripple the overall value of their game, with the likely result that I'll not purchase it even at reduced price, they can go ahead and marry their years of hard work into a crappy ecosystem.

Or they could do all the work to fully replicate the benefits of Steam on their own - which I guess must cost more than Valve actually charges them, because no one seems to do it.
 
Last edited:

Watzupken

Posts: 205   +182
I think this is a good news. The only time I actually buy games from Microsoft's store is when I buy it for my Xbox, and in some cases, the games also exists and work on the PC. The problem with Microsoft Store on Windows is that the prices of the games are a lot higher than what you can find on Steam. So I am looking to see if this move will help make prices more competitive. This is going to be a problem for EPIC since MS is willing to match their offer to game developers.