Microsoft to slash its PC Store software take to just 12 per cent

Microsoft has decided it will improve the revenue share for games developers later this year. In a LinkedIn post by Sarah Bond, CVP, Head of Game Creator Experience & Ecosystem at Microsoft, the reason given for the change of heart was to "help empower more creators to make more amazing games".

So, what is specifically happening? With regard to revenue share, the Microsoft CVP outlined that "Starting on August 1, the developer share of Microsoft Store PC games sales revenue will increase to 88 per cent, from 70 per cent." Thus, Microsoft's cut will fall in line with that given to developers selling games via the Epic Games Store, and out of line with the more popular Steam games store/platform. Being more generous to developers will precipitate more games becoming available on the Microsoft Store for PC games.

Other initiatives Microsoft is taking now or planning to begin, to kindle innovation and reach more players includes;

• The release of DirectX 12 Ultimate for PC game creation alongside the DirectX 12 Agility SDK,
• Development of the Azure PlayFab back-end platform to make it easy to bring best-in-class multiplayer, data analytics and LiveOps into games,
• The introduction of ID@Azure program will empower independent game studios, start-up game developers, and individual creators, on platforms as diverse as console, PC, iOS, and Android
• Continuing to invest in the ID@Xbox self-publishing program which has so far been a platform that has brought 2,000 titles to console and PC, generating $2 billion for the creatives who use it,
• Accelerating discovery of ID@Xbox games via Xbox Game Pass for PC.

As mentioned above Steam is still taking 30 per cent from developers. However, it recently changed its cut to reward success. It did this by reducing its cut to 25 per cent if a game brought in more than $10 million, down to 20 per cent if a game generated $50 million in sales. Interestingly, Apple implemented an equal/opposite policy which sees Apple Store apps/games developers get 15 per cent of revenue unless the apps/game sells generates $1 million, once this revenue milestone is passed Apple takes a 30 per cent cut (backdated). Google Play follows this same Apple policy, minus the backdated revenue clause.

Microsoft has invested heavily in gaming in the past year with its completion of the acquisition of Bethesda Studios ($7.5 billion deal), as well as the launch of the new Xbox Series X/S consoles into an eager entertainment hungry pandemic market.