Microsoft matched Epic by slashing its commission on PC games
The commission is dropping to 12% to match the Epic Game Store and put pressure on Valve's Steam.
Microsoft is making an ambitious play in the PC gaming space by cutting the commission it collects on apps and game sales through the Microsoft Store from 30% to 12%. The rate now matches the one Epic introduced with its Epic Game Store in 2018, and it puts additional pressure on Valve's dominant Steam platform. Valve employs the industry standard 70-30 revenue split used by Apple, Sony and other platforms, but it gives out more to developers once they surpass $10 million in sales.
"As part of our commitment to empower every PC game creator to achieve more, starting on August 1 the developer share of Microsoft Store PC games sales net revenue will increase to 88%, from 70%," Matt Booty, the head of Xbox Game Studios, wrote in a blog post published Thursday. "A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so."
The move is part of a broader effort from Microsoft to make its PC storefront more creator-friendly. Epic shook up the space with its lowered commission and its commitment to exclusives and giveaways, albeit at tremendous expense to the company. But Steam remains the industry leader. The upcoming Microsoft Store change applies only to PC games, and not games sold digitally on Xbox devices, as Microsoft uses higher commission software sales on Xbox to offset selling console hardware at razor-thin margins and sometimes even at a loss.
Microsoft's move also happens to come just days ahead of Epic's landmark antitrust case against Apple, which goes to trial next Monday, May 3. The heart of the case is Apple's 30% App Store commission, which Apple has cited as the industry standard to cover costs of operation and ensure user privacy and security. Epic has long decried the high fees it pays to platform operators like Apple (though CEO Tim Sweeney has said Epic is comfortable with the 70-30 split on consoles), and its suing over the removal of Fortnite from the App Store last summer after Epic included an alternative payment processing option into the iOS version of the battle royale game.