Microsoft says it will reduce its cut for PC games in Microsoft Store from 30% to 12% starting August 1, in a bid to compete with Steam

The Verge 2021-04-30 Tom Warren

Context & Ripple Effects

Microsoft had already separated its Store economics by category, offering non-game app developers up to a 95% share while games retained the older split. The new PC-game rate closes that gap and turns the Store into a more direct challenge to Steam’s distribution economics.

Valve had previously introduced lower Steam fees for high-revenue games, while Microsoft’s later planning materials indicated the same 12% rate was contemplated for Xbox games. The PC move therefore matters as a potential reset of how Microsoft prices access across its gaming storefronts.

First-order effects

PC-game publishers selling through Microsoft Store will retain 88% of revenue rather than 70% once the new rate takes effect.
Microsoft accepts a materially smaller share of each PC-game sale in exchange for making its storefront more attractive to developers.

Second-order effects

Steam faces a sharper pricing comparison for developers, especially against Microsoft’s 12% rate and Valve’s existing volume-based fee reductions.
Publishers can use a lower Microsoft Store fee to reassess PC launch and distribution choices, increasing the value of multi-storefront strategies.

Third-order effects

Platform game fees are moving away from a uniform 30% default toward differentiated rates tied to a store’s competitive position and commercial strategy.
If Microsoft extends the approach across gaming surfaces, storefront competition will increasingly center on developer economics rather than only audience reach and platform features.

The trend: PC game storefronts are competing more directly for publisher supply by cutting platform take rates and replacing the long-standing 30% benchmark with differentiated pricing.

Discussion

Xbox Wire Xbox Wire on x
Continuing Our PC Gaming Journey in 2021 and Beyond
@appfairness @appfairness on x
When there is competition in app stores, consumers win! #OpentheAppStore https://www.theverge.com/...
@timsweeneyepic Tim Sweeney on x
Wow! https://twitter.com/...
@tomwarren Tom Warren on x
Big PC gaming news. Microsoft is shaking up the world of PC gaming by cutting the 30% fee it usually takes on PC games to just 12%. It's a bid to compete with Steam and entice game developers to the Windows store. Full details here: https://www.theverge.com/... https://twitter.co…
@jacobwolf Jacob Wolf on x
@Chr999s @EpicGames @Apple I think it'll be something Epic brings up in their favor, yes. Hence the timing of the announcement, even though the change is not instituted until August.
@jdubtheone @jdubtheone on x
I doubt this will change much, because do you really think people are willing to ditch the libraries they built up over time for something else? Plus let's be real, this changes nothing for someone buying the game so the customers have no incentive to switch, and companies.... ht…
@eric_seufert Eric Seufert on x
Platforms are in a race to the bottom on fees; competition will continue to drive these down. How long until App Store / Google Play default rate decreases from 30%? https://twitter.com/...
@spencerdailey Spencer Dailey on x
it's almost like when you allow multiple app stores on your platform you have to compete on merit https://www.techmeme.com/... Apple, Google - please take note
@thomasbcn @thomasbcn on x
Store fee: Microsoft to lower from 30% to 12% in August on PC games. Epic is at 12% Steam at 30% (20% after $50m)
@jacobwolf Jacob Wolf on x
With trial set to begin between @EpicGames and @Apple on Monday, Apple is making the case that their 30% revenue share of iOS is industry standard. Today, Microsoft said it would cut its revenue share on PC games down to 12%, in apparent support of Epic. https://dotesports.com/..…
@thomasbcn @thomasbcn on x
Interesting to see that Valve's fee decreases with more sales, while it increases on Apple/Google
@thexpaw Pavel Djundik on x
Just remember, this won't make games cheaper for you. https://twitter.com/...
@sirlarr Lawrence Sonntag on x
Yessss the Epic Games Store is really making ripples out here. Love to see it. https://twitter.com/...
@b_fung Brian Fung on x
Pretty limited change here, but a wider downward trend in store fees might not be too helpful to Apple's argument against Epic https://www.theverge.com/...
@eposvox Addie on x
This is neat. It will pressure Valve to change Steam a bit, and means the potential for more good games on MS Store (ideally by listing on all stores not exclusively MS Store). If they work to fix the store and allow unpackaged Win32, I will buy more games there. https://twitter.…
@stroughtonsmith Steve Troughton-Smith on x
It's clear that the 70/30 app distribution split is coming to an end, and each of the platform vendors are trying to put a stake in the ground and hope they're not forced from it. Apple doesn't have a leg to stand on, trying to keep 30% for its more profitable developers
@reckless Nilay Patel on x
It is amazing how even just a little competition changes things fast https://www.theverge.com/...
@futterish Mike Futter on x
Microsoft is following Epic's lead. PC storefront revenue share is changing from 70/30 to 88/12 as of August 1. https://news.xbox.com/...
@johnnycullen Johnny Cullen on x
Developers will now have a 88/12 revenue split rather than 70/30 when they put their games on the Microsoft Store, Xbox Game Studios boss Matt Booty has said. Oh and Halo Infinite will feature cross-platform play and progression on Xbox Series X/S, Xbox One and PC for SP and MP. …
@sarafischer Sara Fischer on x
Microsoft cuts online store fees for game developers from 30% to 12% https://www.nytimes.com/...
@pat_garofalo @pat_garofalo on x
It's almost like lawmakers applying scrutiny to what happens in these online stores is having positive effects. https://www.nytimes.com/...
@devrelcallum Callum Uwunderwood on x
I was personally quite surprised about the revenue on Windows 10 Store, even for games in gamepass. This is cool and I love the pressure on the other PC platform(s?) 😅 https://twitter.com/...
@tha_rami Rami Ismail on x
I'd be surprised if Valve even blinks at this news, but it's good news for devs regardless. https://www.theverge.com/...
@epro Emil Protalinski on x
Epic should point to Microsoft's app store price cut in its case against Apple. https://twitter.com/...
@zhugeex Daniel Ahmad on x
Microsoft lowering its take rate to 12% on its PC store is about creating the same dynamics that Xbox has on console - Bring more games to MS Store - Strengthen Game Pass on PC - Drive spending in MS Store with discounts for Game Pass subs - Position Xbox as a PC platform too htt…
@tomwarren Tom Warren on x
now all Microsoft needs to do is make the Windows store... usable. It's in a terrible state, and the rumored overhaul can't come soon enough
@methodicalmemes @methodicalmemes on x
Once again MS making positive consumer moves. This will greatly support developers. May even encourage them to make more games exclusively, who knows? https://twitter.com/...

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