Microsoft Undercuts Steam With 12% Income-Sharing Settlement

Microsoft announced today that it will reduce its share of revenue for games in the Windows Store from 30% to just 12% starting August 1. The announcement is a clear shot on Steam, which has long dominated PC gaming space and is still in demand by 30% from game makers. Microsoft joins Epic Games with 12% and puts even more pressure on Steam to revise its business model.

With the new agreement to split the revenue, developers are to be won for the Microsoft Store.

Although the announcement looks like a few billion dollar companies are vying for the top spot, Valve has lost a lot of favor with game developers and publishers. A recent GDC survey found that only 3% of respondents agreed with the industry-wide split of 30/70. Platforms like Google Play and the Epic Games Store have tackled the problem by reducing the cut after a certain amount of sales or simply cutting everything together. Steam has a similar program after software made more than $ 10 million in revenue, but it still has one of the most expensive revenue-sharing arrangements in place.

The survey found that 23%, a large number of respondents, thought 10% of sales were fair, while another 20% thought 15% was fair. When asked about Steam, only 6% of developers said that the 30% share was fair. The GDC report says: "One has to ask how long Valve and Steam can hold this premium rate."

Microsoft hopes it can attract more developers to the Windows Store by undercutting Steam. "Clear, no-obligation revenue sharing means developers can deliver more games to more players and thereby achieve greater commercial success," said Matt Booty, director of Xbox Game Studios, in a blog post.

The change is as much a response for Steam as it is for the Epic Games Store. Last year, the Epic Games Store reached over 160 million users and 36% of its PC game sales came from third-party titles. Platform exclusives like Fortnite, Borderlands 3, Godfall, and Tony Hawks Pro Skater 1 + 2 were also among Epic's most popular games last year, suggesting that an aggressive revenue-sharing deal will attract big budget titles.

Epic saw massive growth over the past year, suggesting an aggressive revenue-sharing model is working.

However, Microsoft has to do more than just spend money, and the company knows it. Booty continued, “We know we still have a lot to do, but based on the response from both PC gamers and PC game developers, we believe the investments we are making are heading in the right direction for go to this community. re doing. "This work will likely include expanding support for traditional Win32 games in the Microsoft Store. Microsoft supports these games, but prefers its UWP format for most versions.

However, the toughest hurdle Microsoft has to overcome is mind sharing. The GDC poll mentioned above shows that most PC developers are still making the most money on Steam, and although platforms like the Epic Games Store are questioning this, Valve holds the PC market. The Microsoft Store may attract developers with its new revenue sharing program, but it must also attract gamers.

Xbox renews its commitment to PC gaming, which the new program could support. It was announced today that the highly anticipated Halo Infinite will support cross-play and cross-progression on Xbox platforms and PCs. The game will also launch on the Xbox Game Pass, and the Game Pass for PC roster continues to grow, enticing new players to jump on board.

Even so, Microsoft has to consider the libraries that players already have on Steam. Many players have hundreds, if not thousands, of digital-only titles. Unless Steam falls out of favor, many gamers stick to the platform that has become synonymous with PC gaming.

However, Microsoft has no plans to reduce the revenue share on Xbox. Sony and Microsoft still maintain a 30% revenue share on their respective platforms, though that number takes into account the console and closed ecosystem that come with one.

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