Microsoft to take smaller cut of games sold on its PC storefront

Microsoft is changing its revenue split on the Microsoft Store to give developers a greater share of sales of Windows PC games, the company announced Thursday. Starting Aug. 1, developers will receive 88% of the revenue for any game sold on Microsoft’s PC storefront, up from the current 70%.

This increase in revenue share is beneficial for developers, but it’s also a play by Microsoft to entice game makers to its store. An 88% revenue share is what the Epic Games Store offers developers, and it’s part of why fans see so many exclusives go to Epic on PC.

With Microsoft matching the Epic Games Store, this move puts the most pressure on Valve’s Steam, a platform on which Microsoft also publishes its PC games. Valve’s revenue share is now significantly behind the times compared to Microsoft and Epic. Microsoft referred to its new policy as a “no-strings-attached revenue share,” which is good news for developers but also a shot at Valve’s revenue share plan.

Valve starts by taking a 30% cut of game sales on Steam, the same percentage that Apple and Google take from their mobile app stores. (Microsoft’s own policy change affects only PC games; it will maintain its existing 30% cut of digital Xbox games.) After a game racks up $10 million in sales, Valve’s cut drops to 25%. If a game hits the $50 million mark, the cut drops again to 20%. In a recent survey of thousands of game industry professionals, 97% of developers said they feel that the 30/70 revenue split is unfair.

Earlier this month, The Verge reported that Microsoft will improve its rather lackluster Windows Store later this year, making it more player friendly. With all of these changes, alongside several recent additions to Xbox Game Pass for PC, Microsoft is making a serious pass at PC gaming.

While Valve long had an iron grip on PC storefronts, we’ve seen some of that erode away with Epic Games Store giveaways and exclusives. Microsoft joining the fray for better developer revenue sharing will continue to put pressure on the PC gaming titan, which at the very least should improve the lives of developers.