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Microsoft XBox (Games)

Microsoft Shakes Up PC Gaming by Reducing Windows Store Cut To Just 12% (theverge.com) 50

Microsoft is shaking up the world of PC gaming today with a big cut to the amount of revenue it takes from games on Windows. From a report: The software giant is reducing its cut from 30 percent to just 12 percent from August 1st, in a clear bid to compete with Steam and entice developers and studios to bring more PC games to its Microsoft Store. "Game developers are at the heart of bringing great games to our players, and we want them to find success on our platforms," says Matt Booty, head of Xbox Game Studios at Microsoft. "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 will only affect PC games and not Xbox console games in Microsoft's store. While Microsoft hasn't explained why it's not reducing the 30 percent it takes on Xbox game sales, it's likely because the console business model is entirely different to PC. Microsoft, Sony, and Nintendo subsidize hardware to make consoles more affordable, and offer marketing deals in return for a 30 percent cut on software sales. Microsoft's new reduction on the PC side is significant, and it matches the same revenue split that Epic Games offers PC game developers while also putting more pressure on Valve to reduce its Steam store cut. Valve still takes a 30 percent cut on sales in its Steam store, which is reduced to 25 percent when sales hit $10 million, and then 20 percent for every sale after $50 million.

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Microsoft Shakes Up PC Gaming by Reducing Windows Store Cut To Just 12%

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  • The Windows Store is a fucking terrible experience that I remove each and every time it installs. There is no incentive to ever use it over Steam.
    And if you are a Dev/Pub that releases only on the Windows Store, you lost a sale to TPB. 70% gots to be better than 0%.
    • I don’t understand why some open source projects distribute solely through the windows store. Okular is a good example. I run the LTSC build of windows and the store is not installed. So its either compile okular myself or download a nightly buggy build.

    • I thought this article was perhaps a late entry in the April Fools stories. After all, Microsoft gets 0% of revenue from 99.99% of games on Windows. I was baffled by what they might be referring to, until it mentioned the store. I don't know anyone who has ever used that store for anything, not even free apps. You are not even allowed to have a free app on the Microsoft Store without first selling your soul and signing up for a Microsoft account.

    • well.
      i just wish m$ would sell the new xbox

    • by ceoyoyo ( 59147 )

      Agreed. I own exactly one thing from the Windows Store, MSFS2020, and that's because it was available there first.

      Every other patch seems to break the digital certificate, requiring either some registry hacking or uninstalling and reinstalling (~100 GB download).

      I wish I'd bought it on Steam. Some YouTubers who bought it on the MS Store DID rebuy it on Steam.

  • "Store" is as uncool and sterile as it sounds, and also lacking as a store. You don't get critical mass with "reducing the cut". You might get it with "free" (until said critical mass is achieved) and also trying to make it cool and useful to attract people.

  • by Anonymous Coward

    While Microsoft hasn't explained why it's not reducing the 30 percent it takes on Xbox game sales, it's likely because the console business model is entirely different to PC.

    WTF? The reason they aren't cutting their take for XBox is because it's a captive market - no competition. The reason they don't say is mainly that it's an awkward thing to admit but also it's completely obvious and doesn't need saying.

    You must know this.

    • by Luckyo ( 1726890 )

      Yes, it's the same reason why steam is keeping their 30%. Captive market. It's a problem with "platform" business model in modern internet services. First successful actor getting to the market grows into a de facto monopoly even on open platform like PC, and can charge exorbitant rates even in presence of competition and still outcompete because they have de facto captive audience that are already massively invested into their "platform".

      On closed platforms, this is an even larger problem. But sadly, probl

  • Microsoft cuts prices, their competitors cut prices (A win for the consumer, so far). Microsoft will then need to cut prices again and so will their competitors. To a point where all the margins are gone, so from both Microsoft and their Competitors, they will find ways to cut costs on their end, which often will mean quality will suffer and impact the consumer. Leading to a point where someone else will come in at a higher price but offer a much higher quality product, and both Microsoft and the Compet

    • I was just going to make a similar comment- this is true to form for Microsoft, from the very early days. They will compete on price.

      Charitably, this has a "democratizing" effect- more people can access the technology in question. However, it has its dark side too- others are squeezed out by the behemoth.

      In this case, though, I don't see how Microsoft's store (which is pretty poor, functionally speaking) can compete with dedicated game stores like Gog and Steam. Its not X-platform, for example. Maybe
    • by alvinrod ( 889928 ) on Thursday April 29, 2021 @11:12AM (#61327902)
      Companies competing with each other is somehow now a bad thing? If they weren't doing this you'd probably just be complaining about them being greedy and taking more money than they deserve or should. Perhaps you wouldn't, but the argument you're making is bad enough on the face of it and considering that this very process has lead us to a modern world where almost every aspect of life is better for the average person than at any time in human history, even simple observation would suggest your argument is completely wrong.

      This argument is beyond idiotic because it could be applied to any company that ever cuts prices. It also naturally turns any company that finds a more efficient means of doing business (which would enable them to cut prices) into a villain because they're just racing to the bottom as opposed to passing along savings to the customer. Putting less efficient companies out of business reduces waste among resources used by those companies.

      You might have a complaint if you were to argue that Microsoft is effectively dumping by trying to use profits earned from a different area to run this at a loss until they can drive all of the competitors out of business in order to secure a monopoly position, but even that falls flat under any critical examination. Shareholders won't put up with that for very long, particularly if the losses are large and the potential upside doesn't seem large. The government may always step in at some point and intervene which ruins the potential profit. Probably most importantly is that customers won't easily go back to higher prices as anyone trying to charge for what used to be free content on the web has discovered. Additionally, even if you do drive everyone else out of business, it just means that someone else can acquire the assets of the now bankrupt competitor for very cheap and potentially continue the business.
    • by fazig ( 2909523 )

      while the consumer wants better.

      Judging by how a lot of people handle such situations, it appears that if something is cheaper, the consumer's expecations are being lowered as well. Hence 'better' can be quite subjective.

      Why do you think things like Chinese products have been super popular in the West even when their quality was arguably shitty compared to products designed and manufactured in our own domestic markets? Sure, people bitches about the low quality (which is neccessarily true today). But a significant enough amount of peopl

    • What is there to lose?

      The games are already at the bottom.
      Only the prices aren't.

      Frankly, I wish they'd finally end the AAA industry badly.
      It's not like indie developers would give a single crap. Literally every single person doing the actual work in that industry hates its guts.

    • by EvilSS ( 557649 )

      A win for the consumer, so far

      LoL holy shit I needed a good laugh today. You think this will be a win for consumers? How? The retail price won't come down because of this. The publisher will just keep more of the money from each sale.

      • If we're talking about a $60 game, then under the industry standard 30% cut, the publisher gets $42 per sale. If they keep the price the same, the publisher now gets about $53 per sale. Of course, the person buying the game has no incentive to purchase from the store where the publisher gets a larger cut (outside of perhaps being aware of this and wishing to do so because they like the game publisher more than the store owner) so the publisher has to lower the prices in order to incentivize consumers to pur
        • by EvilSS ( 557649 )
          That might happen with some small indie developers, but for big publishers, they would see it as devaluing their product. You might get better limited time sales, or maybe a bundled DLC or something, but overall no, they won't lower the price on those stores.
    • Yea, because unlimited budgets always lead to great games.... see Amazon, Stadia studios, etc.
      • by bn-7bc ( 909819 )
        Stadias assumptions where faulty. Since ( esp for the US but to a greater or lesser extent everywhere else) high bandwidth low latency un capped or capped with reasonable usage quotas) are not exactly cheap if they are available at all. Google alkso banked on rhe hope that devs would want to port to their platform and that connsumers where wiling to re purchase their exsisting catalog of games if they where available on stadia at all. Which of these assumtions where ultimatly the most erronius? Well I'm no
    • But Microsoft literally adds nothing except for a storefront. How can quality suffer if Microsoft is not involved in the games in any way whatsoever except as a seller?

      Most consumers want cheaper anyway. Don't think that the few who want high priced quality are ever in the majority in any market. But there's an easy balance between the two.

      The sole reason for Microsoft Store is because Microsoft was crying that Apple and Google got revenue from rent-seeking and sitting on their thumbs, and wanted a slice

    • Before this cut both Microsoft and Steam charged nearly a third of the total cost of a sale for the simple expedient of copying the digital files to your computer. Debian does a better job of this same task for free. Honestly, I suspect that game developers would be way better off if these two companies (and Epic, Apple, Google, and everyone else trying to maintain a digital storefront) did race to the bottom. Right now developers have little choice but to use these services. If you want to target certa

    • We're talking about a downloader. Consumers don't give a shit about a "better" downloader. Especially because.

      Game A) $7million in development resources toward gameplay and levels and features. $3million to Steam for hosting the file.

      Game B) $8.8million in development resources toward gameplay and levels and features. $1.2million to MS for hosting the file.

      Which game will the consumer prefer? This consumer is pretty confident that spending 25% more money on the actual game not to a rent seeking leech will

  • So what's a game nowadays? $30? $70?

    Are you telling me somebody worked for ~20-45 just to accept a card payment and do, essentially, a file copy operation for me?

    Let's be honest: Of those 12%, 90% are profit, 9% are marketing, 0.9% are management salaries, and 0.1% are server operation.

    Such fair deal. Much generous. WOW.

    • If there's so much money being left on the table, you should start a store that only takes 5%. Just think of all of the money you could be making!
      • by Luckyo ( 1726890 )

        That is literally what Epic did, except their numbers are slightly over 10%. Problem with "internet platform business" is that first successful entrant to the market tends to form a monopoly in their field that is nearly impossible to break. Even on open platforms.

        "You publish where users are. Users are where they're used to getting their product".

      • by Luckyo ( 1726890 ) on Thursday April 29, 2021 @12:42PM (#61328388)

        To add to my other post, reminder that you cannot sell your game for cheaper by offering those savings. Steam will literally kick you off their store if you compete with them on price.

        So you can't pass the savings to the users to compete with Steam on price.

    • by bws111 ( 1216812 )

      A sane person looks at what value they get from the transaction, not what the other party gets. If paying that 12% gets you more profit than you get without it, then it is worth it, no matter how much it actually cost the other guy (or how much profit he makes).

    • Hosting, bandwidth, updates, maintenance of the store, approvals, reviews, troubleshooting, dev support. That's not even including all the crap that some of the platforms include, like steam has tons of on the top features that come with using the store like friends, inline voice support, matchmaking, achievements, etc, etc, etc.

      Do I think all this is worth 15%, no, but I don't know how much all this actually costs so I'm hardly in a position to make an informed call, and neither are you.

    • by Luckyo ( 1726890 )

      "Internet platform business model" in a nutshell.

  • Are games still forced to be sandboxed and mods limited on the pc side?

    Steam and gog are better stores.

  • by stikves ( 127823 ) on Thursday April 29, 2021 @01:59PM (#61328814) Homepage

    To be fair there are real costs to a service, other than "just carrying bits". Obviously they offer a "market effect", and let you reach more people. Unless you have a very good publisher, your shareware demo would probably just sit on your web site with few downloads. There is also customer service and payment processing. So you don't need to care where your customers are, which language they speak, or how they pay (some might even be using their cellular provider to bill). And finally, if you are into it, they also give some basic copy protection. (*Unless you are Sony and want to install rootkits along with your software, of course).

    Overall there is a value to this service. Up until recently the market providers asked 30%, because... well, they can. Now there is competition, and we see a more realistic range. 10% - 15% is actually reasonable for what they do.

  • by thegarbz ( 1787294 ) on Thursday April 29, 2021 @03:00PM (#61329130)

    Compared to Steam the Windows Store and the Epic store are just ... stores, all of them lack hundreds of features compared to the likes of Steam. Hilariously enough attempts to add features have resulted in some of the most epic fails: Updating a game on the Microsoft Store is like playing russian roulette with data corruption. Epic "cloud save" is akin to taking your save file, burning it to a CD, deleting the original, and throwing it as far into the sky as you can. Neither store has any features related to user created content.

    Their biggest problem: unless they pass on the savings to consumers they won't win any business.
    E.g.
    You can buy Cities Sklines on the Epic store for 30EUR and get Cities Skylines.
    You can buy Cities Skylines on the Microsoft Store for 30EUR and get Cities Skylines.
    OR you could buy Cities Skylines on Steam for 30EUR and get Cities Skylines along with access to the workshop with over 100,000 user created assets, maps, and completely game changing mods, to say nothing of the over 500 guides and tutorials covering anything from basic gameplay to how the AI calculates traffic destinations and how to optimise the city.

    My personal favourite is buying Elite Dangerous on the Microsoft Store or the Epic store. Works just fine. Just don't try to launch it in VR mode. If you don't have Steam installed on your computer, you'll get an error.

    These alternate stores better start offering a reason for *consumers* to shop with them. And consumers don't give a crap how much of a cut a store takes from a developer.

  • Sure, hardware is subsidized a bit. But only a few titles are getting marketing. I guarantee you random indie titles that don't even get on the new release tab aren't getting any marketing. For a lot of small devs, the fees don't make any sense.
  • While Microsoft hasn't explained why it's not reducing the 30 percent it takes on Xbox game sales, it's likely because the console business model is entirely different to PC.

    That's a generous attempt to pretend it's justified. Let's be honest about it. They don't have to reduce the price on Xbox because they have a monopoly. On PC they have to compete with Steam and Epic, and that drives them to lower their prices. If they had competition on Xbox they might be lowering their price there too. No one else can sell Xbox software, so they'll keep charging monopoly prices.

  • Steam won't do anything about TF2 bots. The only thing I have bought from Micros~1 since 1998 is a mouse or two. So even though I use Linux for my OS and have a $340 TF2 backpack, Micros~1 has probably been a better investment than Steam. Thanks for nothing, Gabe Newell, you fat, ugly schlub.
  • It would be much better to implement flat fee pricing. This would reduce the amount of "free" garbage, and give real software developers a reason to publish on the Play Store. Even 12% is not cheap for a glorified file share server!

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