Microsoft CEO Satya Nadella talks to Volkswagen AG CEO Herbert Diess (not pictured) about a joint project between the two companies called Volkswagen Automotive Cloud in Berlin on February 27, 2019.
Microsoft said Thursday that on August 1 it will 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 rather keep healthy, attracting to the both developers and end users to keep theirs. booming store.
Revenue from ‘Xbox content and services’, which also includes royalties from sales of third-party PC games, 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 report absolute revenue for the segment, just percentage growth.
While Microsoft offers its own games such as Flight Simulator and Minecraft on 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 an overhaul of its Store app for Windows 10, along with more permissive policies.
“Having a clear, unconditional revenue share means developers can deliver 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 Epic Games has used in the store it has run since 2018. PC gamers spent over $700 million on purchases at Epic stores in 2020, and Epic has been rated to nearly $29 billion after a recent funding round. , the company said earlier this month.
Microsoft is also looking to further distinguish itself from Valve Software’s Steam store, which since 2018 has offered 66% of revenue to developers, or 75% if developers earn over $10 million, or 80% for over $50 million. .
The toll that big tech companies charge small software developers has become an issue in the tech industry, especially when regulators scrutinize 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 rather than the standard cut of 30%.
WATCH: Why Apple’s Battle Against Epic Games Is More Than Just Games
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