Microsoft is shaking up the PC gaming world today by slashing the amount of money it brings in from Windows games. From August 1st, the software giant will reduce its cut from 30% to just 12%, in a direct attempt to compete with Steam and entice developers and studios to add more PC games to its Microsoft Store.

Matt Booty, head of Xbox Game Studios said “Game developers are at the heart of bringing great games to our players, and we want them to find success on our platforms,”. “A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.”

These changes would only affect PC games in Microsoft’s store, not Xbox console games. Although Microsoft hasn’t clarified why it doesn’t lower the 30% cut it takes on Xbox game sales, it’s possibly because the console business model differs significantly from that of the PC. Microsoft, Sony, and Nintendo subsidize hardware to keep consoles affordable, and they sell marketing incentives in exchange for a 30% share of game revenue.

On the PC side, company’s latest reduction is huge, and it matches the revenue split that Epic Games provides PC game developers, while also placing more pressure on Valve to minimize its Steam store break. Valve continues to take a 30% share of revenue in its Steam shop, which is reduced to 25% when sales reach $10 million, and then to 20% after $50 million.

Microsoft Epic Games

It’s also difficult to compete with Steam. To contend with Steam, Microsoft and Epic Games have struggled to persuade game developers to list titles in their stores. Epic Games has tried exclusives to entice developers, but a large part of Microsoft’s problems stem from pushing game developers to use UWP in the past, as well as the current Windows Store app.

Microsoft’s store eventually began supporting traditional win32 games a few years ago, but this move hasn’t been enough to help the Windows store cope with Steam. The 12% discount can entice more developers to submit their games to Microsoft’s store, particularly if the company can improve the poor user experience. Microsoft is also rumoured to be working on an overhaul of its Windows Store, which will enable developers to upload any Windows application to the store, including browsers like Chrome and Firefox.

Aside from the shop, the company still has a long way to go in terms of PC gaming. Although the Xbox Game Bar is a welcome addition, Steam and Discord are much more common than Microsoft’s alternatives. Cheaters and hackers are on the rise in the world’s most popular PC games, and Windows isn’t doing anything to help game developers secure their creations.


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