Microsoft recognizes that the Microsoft Store Platform had a problem, and the company is planning to fix a few of those things, starting with Gaming. On April 30, 2021, Microsoft announced that from August 1, it would charge only 12% of revenue split instead of a 30% split used to charge previously from game developers for listing PC games on Microsoft Store its app marketplace. The move is a very significant one as it gives Microsoft at least one clear upper hand on Epic Game’s Epic Store and Valve’s Steam, which are two of the most popular PC games marketplace in the world.
Matt Booty, Head of Microsoft Xbox Game Studios, wrote on the official Xbox blog clearly states that the service-driven future vision of the company adopted ever since company chief Satya Nadella took over. He further said, “As part of our commitment to empowering 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.”
The company has come up with ways to take on Epic Store and Steam. The former still charge game developers 30% of the revenue for the most part until a game starts considerably more money. When Steam received criticism from the developer’s community, it revised its revenue split. Valve currently reduces the revenue share to 20% after the game crossed the $5o million mark and 25% after the game grossed $10 million in net sales. Epic for long has been appealing to game developers with a 12% revenue split.
Microsoft clearly states that it hopes to generate revenue mainly through software and not hardware sales. Xbox game consoles are subsidized primarily in terms of price, and the large amount that the company earns from its hardware sales is through games sales. On the Xbox store, a 30% revenue split remains the same.