Nowadays, a lot of games for PC can simply be downloaded and paid for from a wide choice of online stores. This model is convenient due to particular advantages such as being able to get additional or downloadable content fast. These online storefronts, from the Microsoft Store to Steam by Valve or the Epic Games Store, welcome game developers to make their titles available on their platforms while taking a percentage cut of revenue from every online purchase made. Enticing developers to their platforms is an intense competition between these companies, with one tactic being to offer smaller store cuts.
And this, according to Venture Beat, is the reason for Microsoft’s announcement regarding games available on their online Microsoft Store. Xbox Games Studios boss Matt Booty announced in a blog post Thursday, April 29, that beginning this coming August 1 Microsoft Store will now take only 12 percent of revenue from purchases of games available on their platform. Booty explains that Microsoft wants game developers to be successful on their platforms, and describes the lesser revenue cut as a “clear, no-strings attached share” to the company for hosting their titles. Then again, it only applies to PC games on Microsoft Store and not Xbox titles.
This is a significant step down from the old revenue share of 30 percent that Microsoft Store took out of a PC game’s purchase on their storefront. It was noted that Epic Games Store was the first to do so, and by following their lead Microsoft has put some major pressure on Valve for their Steam platform. Both it and Microsoft Store had the 30 percent cut which made them sort of equal; although Valve does ease up on any game title that has passed a sales milestone by reducing the share to 20 percent.
It would appear that Microsoft is positioning its online storefront to developers as a platform where they could get more revenue in by putting their games up there (12 percent cut for Microsoft means 88 percent share to them). That could pose as a serious challenge to Valve and their Steam platform, if not for Valve having built Steam up on a solid reputation for PC gamers over the years. It might take some time before Microsoft can determine if their move has paid off.
Other steps being taken to improve the Microsoft Store experience include removing some apps developed on Universal Windows Platform (UWP), plus making available mods for certain games that have them.
Image courtesy of The Verge