Satya Nadella, CEO of Microsoft, talks to Herbert Diess, CEO of Volkswagen AG (not shown), about a joint project between the two companies called Volkswagen Automotive Cloud on February 27, 2019 in Berlin.
Sean Gallup | Getty Images
Microsoft announced Thursday that on August 1 it would increase the percentage of revenue developers receive from selling video games through its App Store from 70% to 88%.
Microsoft wants to make sure video game developers don’t leave the store that came with the Windows 10 operating system as video game content is a growing source of income that Microsoft would rather keep healthy, and encourage both developers and end users to keep their own businesses thriving.
“Xbox Content and Services” revenue, which includes royalties from sales of third-party games for PCs, rose 34% in the first quarter as players continued to play games while they sought shelter for distribution of the coronavirus. Microsoft does not report absolute sales for the segment, only a percentage growth.
While Microsoft has its own games like Flight Simulator and Minecraft in its own store, the company wants to make sure that third-party developers continue to post their creations there as well. The update comes a week after Windows Central reported, citing unnamed sources, that Microsoft is planning a revision of its Store app for Windows 10 and more permissive guidelines.
“With a clear, no-obligation revenue share, developers can deliver more games to more players and thereby achieve greater commercial success,” wrote Sarah Bond, Microsoft’s corporate vice president responsible for the game developer experience and ecosystem, on LinkedIn.
The new revenue share corresponds to the agreement that Epic Games is privately owned in the business that has been operating since 2018. PC gamers spent more than $ 700 million on purchases in the Epic store in 2020, and Epic was valued at nearly $ 29 billion after a recent round of funding, the company said earlier this month.
Microsoft is also striving to differentiate itself further from the privately owned Valve Software Steam store, which has 66% of sales for developers as of 2018, 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 a problem across the technology industry, especially as regulators scrutinize the performance of Apple and Google-powered mobile app stores. At the beginning of this year, Apple presented a program with which smaller developers should be relieved. Developers who received less than $ 1 million for all of their apps in 2020 and developers who are new to Apple’s App Store can qualify for the program, which takes 15% of sales rather than the standard $ 30 cut % occupies.
CLOCK: Why the battle between Apple and Epic Games is about more than just games