Microsoft slashes its Windows Store cut to 12 per cent so that developers stop running to Steam

Microsoft's new revenue split for developers is an attempt to challenge the dominance of Valve's Steam on Windows 10.

Microsoft is announcing a big change for games on the Microsoft Store. The software company has said it is reducing the commission it charges developers on the sale of their games from 30 per cent to just 12 per cent, in a move that is likely to increase the appeal of Microsoft Store to game developers against Steam. The new fee is only for PC games that people buy from the Microsoft Store. Meanwhile, Microsoft would still take its 30 per cent cut on Xbox console games. The biggest competition for Microsoft Store is Steam, which released a staggering 10,263 games in 2020, per a report by Statista. That is because Valve, the company that owns Steam, has a different revenue-sharing plan. It would still charge 30 per cent to developers on sales of their games on the Steam store, but it reduces the cut to 25 per cent once sales hit $10 million, followed by just 20 per cent in commission for every sale of $50 million on the store. Microsoft is not matching Valve’s strategy. Instead, it is matching the revenue split Epic Games offers developers on sales of games on the Epic Games store. And this new strategy is likely to shake up the gaming distribution business for the Windows 10 platform. “Game developers are at the heart of bringing great games to our players, and we want them to find success on our platforms,” says Matt Booty, head of Xbox Game Studios at Microsoft. “A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.”