Microsoft to match Epic and share more money with video game makers

Microsoft said Thursday that on August 1 it would increase the percentage of revenue developers receive from video game sales through its App Store from 70% to 88%.

Microsoft wants to make sure that video game developers don’t abandon the store that comes with the Windows 10 operating system, as video game content represents a growing source of revenue that Microsoft would prefer to keep healthy, attracting the both developers and end users to keep its own. booming store.

Revenue from ‘Xbox content and services’, which also includes royalties on third-party PC game sales, rose 34% in the first quarter as people continued to play games while sheltering in place to reduce the spread of the coronavirus. Microsoft does not publish absolute revenue for the segment, just percentage growth.

While Microsoft offers its own games such as Flight Simulator and Minecraft in its own store, the company wants to ensure that third-party developers continue to publish their creations there. The update comes a week after Windows Central, citing unnamed sources, reported that Microsoft was planning a redesign of its store app for Windows 10, along with more permissive policies.

“Having a clear, unconditional revenue share means developers can bring more games to more players and achieve greater commercial success by doing so,” wrote Sarah Bond, Microsoft’s corporate vice president in charge. of the experience and ecosystem of game creators. a post on LinkedIn.

The new revenue share will match the arrangement that Epic Games has used in the store it has managed since 2018. PC gamers have spent over $ 700 million on purchases at Epic stores in 2020, and Epic has been rated. to nearly $ 29 billion after a recent round of funding. , the company said earlier this month.

Microsoft is also looking to differentiate itself further from Valve Software’s Steam store, which since 2018 has offered 66% of revenue to developers, or 75% if developers make more than $ 10 million, or 80% for more than $ 50 million. .

The toll that big tech companies charge small software developers has become an issue in the tech industry, especially when regulators examine the power of mobile app stores run by Apple and Google. Earlier this year, Apple launched a program designed to reduce the burden on small developers. Developers who received less than $ 1 million in 2020 for all of their apps and developers who are new to Apple’s App Store can qualify for the program, which takes 15% of revenue instead of the standard discount. by 30%.

LOOK: Why the battle between Apple and Epic Games isn’t all about games