Microsoft’s refreshed Store will still take a cut of revenue from games

During its Windows 11 announcement, Microsoft made a big deal about its new Store experience that would allow developers to implement their own “commerce engine” instead of using — and paying for — Microsoft’s system.

While that’s great news, the change doesn’t apply to games. Microsoft confirmed to The Verge that it wouldn’t allow games offered on the Microsoft Store to keep all their revenue, which likely extends from how Microsoft operates its Xbox business.

During the recent Epic vs. Apple trial, Microsoft testified that it sold Xbox hardware at a loss and instead makes a profit from the 30 percent cut it takes from game sales and subscriptions. One of the core elements of that trial was what constitutes a game and whether apps and games are different (which humorously led Roblox to replace the word ‘game’ with ‘experience’ on its website). Microsoft seems to fall squarely on the side that games and apps are different.

Despite that, the Microsoft Store will reduce the cut it takes of game revenues. The company announced in April that it would reduce its cut of PC game sales made on the Store from 30 percent to 12 percent starting August 1st. That could make the Microsoft Store more enticing for game developers compared to Valve’s Steam, which takes a 30 percent cut that drops to 25 percent once a game hits $10 million USD in sales and again to 20 percent at $50 million USD in sales (roughly $12.3 and $61.5 million CAD respectively).

It’s worth noting that Microsoft still takes a 30 percent cut on Xbox, although the company has previously considered reducing the Xbox cut to 12 percent as well.

Still, it’s disappointing that Microsoft won’t offer game developers the option to avoid the 12 percent cut entirely. That said, Windows remains a more open platform than, say, Apple’s iOS when it comes to stores. There are several store options for buying games on Windows: Steam, Epic Games Store, Blizzard’s Battle.net and the EA Desktop App/Origin are just a few of the options. A game developer could easily avoid Microsoft’s revenue cut by choosing a different store, launching a new store or skipping a store entirely (many free-to-play games do this by offering users a ‘game launcher’ app they install that can manage updates for the game).

However it plays out, it remains to be seen if Microsoft’s Store changes are enough to win back developers. If they are, it may also put pressure on other stores (and maybe even other companies) to reduce the cut of the revenue they take.

Source: The Verge