Microsoft has just cut its profit from selling games on the Microsoft Store to 12%. This reduces your profit margin to match that of the Epic Games Store, and well below the world’s largest PC game store: Steam. Valve’s Steam platform currently takes a baseline of 30%, with a sliding scale of 25 and 20% for games that are more massively successful.
To be clear here, this change will not necessarily affect the amount of money a player will pay for a game. IT COULD affect the price a player pays IF a developer sees the lowest profit margin for Microsoft as a sign that he can lower the price of his games in the first place. But for now, it just means that developers (and publishers, etc.) will receive more money when a game is sold on the Microsoft Store.
It is also important to note that Microsoft has not made the same change in its Xbox store for all Xbox consoles. The terms for PC game developers listed on the Microsoft Store begin on August 1, 2021. At that point, the share of developers in the Microsoft Store PC game sales revenue will increase from 70% to 88%.
Microsoft described this change as a “clear, uncompromising revenue share” in its LinkedIn article today by Sarah Bond, Microsoft’s CVP, head of Game Creator Experience & Ecosystem.
This change in the percentage of standard profit margin is most likely due in part – at least in part – to the Epic Games Store. Epic Games and its overzealous profit-sharing crusade seem to be changing the way the industry deals with developers, games and the way they profit by being the store in which these games are stored.
Microsoft also noted that its Xbox Game Pass for the PC system has shown some degree of success with expanding the amount of time a user spends playing and expanding the number of different types of games that a player plays by a significant amount. Bond cited a “recent survey” in which they found that “more than 90% of [Xbox Game Pass for PC] members said they played a game they wouldn’t have tried without the Game Pass.”