Microsoft exploring reduced Xbox store revenue cut, internal documents reveal

Xbox Logo
Xbox Logo (Image credit: Matt Brown | Windows Central)

What you need to know

  • Microsoft has explored a new revenue split for Xbox game sales through the Microsoft Store, new internal documents reveal.
  • Internal documents suggest the company is exploring reducing its revenue cut from 30% to 12%, with 88% of earnings headed to publishers.
  • Microsoft denies planned changes to its Xbox revenue split at this time, according to a report from The Verge.

Microsoft has explored changing its revenue share through the integrated Xbox store, reducing the company's cut on video game sales across its Xbox One and Xbox Series X|S family. It comes via newly-released confidential documents filed as a part of the ongoing Apple vs. Epic Games legal battle, revealing internal considerations to shake up fees around digital game distribution.

The document, dated January 2021, details upcoming changes to Microsoft Store revenue share, including adjustments on Windows 10 PCs and Xbox consoles. It states "all games will move to 88 / 12 in CY21," denoting an 88% revenue split headed to publishers, where Microsoft would take 12% of final sales. That's a hefty reduction to Microsoft's existing 30% cut demanded on consoles, also standard across marketplaces from PlayStation and Nintendo in 2021.

Microsoft recently announced the new revenue split for the Microsoft Store on PC, matching rival PC storefronts like the Epic Games Store with the 12% slice. The move, increasing incentives for publishers over platforms like Steam, came as the company reiterated its commitment to PC gaming for years to come. However, the announcement failed to outline similar changes on consoles, where the revenue cut currently remains fixed at 30%.

Microsoft Store

Source: Matt Brown | Windows Central (Image credit: Source: Matt Brown | Windows Central)

It currently remains unclear whether planned changes to Xbox made it beyond this internal proposal, failing to surface alongside the recent PC announcement. "We have no plans to change the revenue share for console games at this time," a Microsoft representative reportedly tells The Verge — suggesting plans were either axed or postponed until a later date. Changes to the PC revenue share go into effect on August 1.

The heavily-redacted document also implies Microsoft has explored reducing PC revenue share in exchange for streaming rights, likely to bolster its Xbox Cloud Gaming platform. "There is a proposal currently under Gaming Leadership Team consideration to adopt 88 / 12 as a public PC games revenue share for all games in exchange for the grant of streaming rights to Microsoft," the document states. It also remains unclear whether this policy materialized and if similar plans were considered for Xbox consoles.

Matt Brown

Matt Brown was formerly a Windows Central's Senior Editor, Xbox & PC, at Future. Following over seven years of professional consumer technology and gaming coverage, he’s focused on the world of Microsoft's gaming efforts. You can follow him on Twitter @mattjbrown.