Skip to main content

The Microsoft Store giving 88% of net sales revenue to developers isn't enough to shake Steam

Microsoft Store
Microsoft Store (Image credit: Matt Brown | Windows Central)

Microsoft has announced that the Microsoft Store will now only take 12% of net revenue from PC game sales, leaving developers with a hefty 88% cut. This is fantastic news for developers who prefer — or are about to prefer — the Microsoft Store, but I get the impression that it's not going to matter too much to anyone besides them.

If you'll recall, there's another PC gaming storefront that tried something similar to lure devs away from Valve's Steam and its unsavory 70-30 revenue split. That storefront's name is the Epic Games Store (EGS). It was a big proponent of the "88% to devs, 12% to us" revenue scheme.

To this day, the EGS remains a place for devs to go when they want a greater cut of revenue or, in the case of certain titles like Control, guaranteed income right out the gate. These games developers often choose the EGS at the cost of not coming to Steam until much later, per Epic temporary exclusivity deals. To give examples of this phenomenon: Borderlands 3 was an EGS exclusive for six months, while Untitled Goose Game, Control, Metro Exodus, and many others were EGS exclusives for a full year.

And yet, even when these games do arrive on Steam long, long after their EGS PC debut, they're swamped with buyers. Why? Because people buy from Steam for the ecosystem, not just for the software.

Microsoft Store: Too EGS, not enough Steam

Steam

Source: Windows Central (Image credit: Source: Windows Central)

The Microsoft Store taking a smaller revenue cut is likely a good thing overall and definitely a boon for game devs. Still, it probably isn't going to lure many actual consumers away from Steam unless Microsoft pulls exclusivity deals like the EGS, and even then, it likely won't shift the scales. The Microsoft Store actually did try luring in people with PC exclusives like Quantum Break and Killer Instinct back in the day, but eventually, Microsoft gave up and plopped all of its games on Steam. Heck, there's even a rough port of Forza Horizon 4 on Steam now, which was one of the only remaining Microsoft games not to be on Steam as of the start of 2021.

Barring the black sheep that is Forza Horizon 4, most of Microsoft's Steam ports are actually polished, meaning there's no incentive for consumers to choose the Microsoft Store version. After all, with the Steam version, you get forums, communities for sharing videos and pictures, streaming functionality and a built-in audience, built-in mod libraries, family sharing so those closest to you can play your games for free, Steam remote play, Steam's incredible refund policy — you get what I'm saying? Gamers get features that not only increase fun but also potentially save them money (via family sharing, remote play, and a transparent, generous refund policy) thanks to Steam. In contrast, most of these features and benefits are nonexistent on the Microsoft Store.

It's the same reason EGS hasn't managed to shake Steam. Valve's storefront has so much going for it in the way of consumer benefits that it would take a mass exodus of high-profile devs and publishers permanently abandoning Steam for any other storefront to have a chance at first place in the PC gaming sphere. But the exact opposite is happening: Publishers such as EA who forsook Steam are coming back after having wasted years trying to compete with it via their own storefronts.

Mind you, Microsoft likely isn't trying to beat Steam; that much was clear the second it handed ports of all its exclusive games over to Valve's storefront. However, the new revenue split does seem geared to make the store more palatable to devs. I don't see a point in attracting chefs to a new town when it's been made clear again and again that the actual paying restaurant-goers prefer the existing neighborhood (for reasons that extend well beyond the force of habit).

Microsoft Store: The point of the 88-12 plan

Microsoft Store

Source: Windows Central (Image credit: Source: Windows Central)

The one potential Microsoft-facing benefit of the new revenue split model that immediately jumps out at me is that for devs who don't want to deal with EGS controversy but still want a bigger cut from sales, the Microsoft Store could now be the go-to option. Maybe this is Microsoft's play to become the runner-up to Steam.

Look at devs such as CD Projekt Red, who, at least pre-Cyberpunk 2077, had hyper-loyal followings that often chose to buy from CDPR's own PC storefront just so the devs would get the most money possible. Could Microsoft be trying to lure over developers with those sorts of dedicated followings who aren't interested in the EGS?

Maybe Microsoft's move to make the Microsoft Store more economically enticing to developers will end up being a non-starter. But perhaps it's a stealthier strategy to secure second place with those who don't exclusively subscribe to the Steam store. Whatever the play is, I'm interested to see what happens. More competition is always a good thing, especially if it results in hardworking developers getting to keep a bit more of the fruits of their labor.

Robert Carnevale is the News Editor for Windows Central. He's a big fan of Kinect (it lives on in his heart), Sonic the Hedgehog, and the legendary intersection of those two titans, Sonic Free Riders. He is the author of Cold War 2395. Have a useful tip? Send it to robert.carnevale@futurenet.com.

27 Comments
  • I have had a thing against Steam since about 2007, but I did help my daughter set up a Steam account last year. I don't like their business model, not so much about the % they pay devs (I think a 70:30 split is not bad, being better than the 60:40 split they'd get at typical retail and absent the production and shipping costs), but the whole mandatory Internet connection and DRM model. It just felt... controlling? Not sure that's the word I want, but it always gave me the creeps. Steam made me always want to find someplace else to buy the game. I've never felt that way about the Microsoft Store (or GOG or Google Play or the App Store -- only Steam). Hopefully MS will take to heart some of the messages in here about Steam's strengths and incorporate them. They already have support for game groups. They really need family plans, not just for sharing individual purchases, but GamePass and other subscription services too (like they already do for Office). Could you imagine if Netflix didn't let you share your account with your family?
  • You can play games offline in Steam.
  • Yeah, this has changed, but my perception of Steam as controlling hasn't really changed. It's a branding problem they have with me, just like many people still think of MS as the big bad guy who controls the market, which was accurate until they lost their anti-trust cases, and even less so under Nadella.
  • How is Steam controlling when they support Linux better than almost any other gaming company out there, and encourages mods and fan games of thier own IP?
  • Yes more competition is good and I don't see the downside for developers. I also have to wonder how this might impact Gamepass since most of the hing moves by MS have some Gamepass angle these days
  • Tell that to the developers, publishers and users that used Games for Windows. Yes, it cost developers. There is no real reason for the MS Store to exist.
  • There is not any smarts built into the Microsoft Store, it's pretty much just a straight listing of products with a very rudimentary and often incorrect categorization. When it come to building a proper store UI and game repository, Microsoft doesn't even try. Except of course when you factor in Game Pass. Many of us will tolerate the Microsoft Store for that, but 90+% of us will still have Steam in addition.
  • True. I forgot that Microsoft is going to revamp the store. One can hope they make it useful and competitive
  • Once it allows unpackaged apps, and once they introduce an easy system for game mods, the only thing holding it back will be it's library. The fair developer tax will attract future developers, which means Steam's advantage will be slowly whittled away unless Steam caves in and accepts the new status quo.
  • How old are you? Not trying to insult you but apparently you weren't around for Games for Windows Live. GFWL was supposedly a Steam competitor.... Microsoft didn't even try to compete and hasn't since that time. Users are not going to buy games from the MS Store or the Windows Store or the Windows 8 Store or Games for Windows Store or the Games for Windows Live store. I'm still confused by the few of you guys that still exist that think any of this is a good idea. Hey, I have some bridges to sell you by the way.
  • You keep bringing up the same point, but it's like someone criticizing windows 10 because windows Vista sucked. Point being, hopefully they learn from past mistakes and the two are very different. Not to say that there aren't a lot of things that need to be improved.
  • No, its like being smart enough not to drive with someone that gets in a car accident every time they drive. Either they are a very bad driver or they have very bad luck, or both. Why is Microsoft needed as a middleman in software distribution anyway, why not Exxon? Its not one failure, its a whole series of failure.... sometimes you only have one shot at getting it right.
  • Daisy, you questioned the age and experience of another poster here. I won't go that far, but your perspective is woefully incomplete. Your criticisms of MS's past are all valid. Your conclusions of what those mean for the present and future are not, because you're leaving out part of the history. Note that I have also been brutally critical of MS for not persevering better with many of their product and software launches. That said, MS has scrapped various programs when they don't do well. You and I may agree that they should have tried harder, but their logic is clear enough. They have never abandoned something that is appealing to customers and selling. Further, they have also continued to support initiatives even that aren't yet doing well if they fit strategically into their overall plan, and when those initiatives started under Nadella (he has cancelled things he didn't like that predated him). Microsoft has spent tens of billions of dollars in the past few years to bolster its game business. IF (a genuine if, I don't know their internal thinking) Microsoft believes that the Store is important to their long-term financial success in games, then this move looks to a further investment (paying more out to developers) to achieve that goal. MS may indeed still conclude this isn't working and drop it. I would even agree with you that it is more likely to fail because your view is not unique -- by abandoning prior efforts, many customers don't trust them, which increases risk of failure on new efforts, a good argument to stick with mediocre products better and build customer trust. But the MS Store is an important part of Windows, is critical to their Windows update systems, fits with their other moves to increase their gaming business, and only serves to help developers. There is no real downside here, unless you have a financial stake in Valve, so it seems we all ought to hope this succeeds.
  • "you questioned the age and experience of another poster here" The reason I questioned the age of the poster was not to insult them, but apparently the person wasn't around during all the failures. "They have never abandoned something that is appealing to customers and selling. " Isn't that the problem.... nothing they have really done on the consumer side has sold. LOL The reasons for that are many. Really all the purely consumer side has been abandoned, they lost. Which is why they are doing what amounts to a relaunch of the store. "But the MS Store is an important part of Windows, is critical to their Windows update systems, fits with their other moves to increase their gaming business, and only serves to help developers." Agree to disagree, I don't use the Store... and most people really don't which is what all this is about. The store hasn't been needed for 30 years in regards to windows, they can wish for it be.... so they can make more money. I want a unicorn. I would say most of what I write is factual in nature or based on obvious observations... heck, I was happy with my Windows Phone. But I don't determine the winners and losers, the market does... Microsoft is still clearly the loser in the purely consumer products. Not many left really.
  • Not to be offensive but how young are you YOU....??? I remember the days when steam came out and was puked on by PC gamers all over the world.... nobody wanted steam in the first place no one it was worst than the XBOX one launch.... so yeah I see your point but steam is far from perfect as a matter of fact every game I can get on gog I get there no matter what and I know most gamers from my generation do and some of us would still rather not deal with steam at all no matter what features they bring....
  • They just need to let non game pass games be in the xbox app. That app combined with game bar is already better than steam
  • The problem with the Microsoft store is that many people don't even know it exists. People still do not know of the OS that was also made for tablets. I have never seen a commercial featuring it. Most kids don't even know.
  • MS isn't necessarily going for Steam customers.
    Like in consoles, they are going for new customers not already committed.
    Two things folks forget is that Windows S still exists and is being used by institutions (schoos and businesses) and that new people are getting their first PCs every day. And since most are familiar with the walled gardens of consoles, tablet, phones, and streaming devices, newbies will *start* at the Windows store.
    Making it adequate will accrue customers, making it better will keep more of them. It's not futile, merely opportunistic, like BING. At 3% it will never dethrone Google search but $8B a year isn't peanuts. As the IdiotPoliticians™ say, "a billion here, a billion there, pretty soon it adds up to real money".
  • No, businesses are not using S nor UWP which is what everyone told them would happen. Businesses actually started moving slowly to VDs for windows, and eliminating Windows as much as possible. They actually remove the Store and the ability to install from the Store. Businesses also install the software via push.
  • I didn't say businesses.
    I said institutions.
    Like K-12.
  • Daisy, that's incorrect. The massive Azure growth that is driving much of Microsoft's huge success is largely among businesses where their employees use Windows 10. Some do push specific applications and lock out all others, but many others use the custom Stores enabled through Azure AD so that their people can select from among any approved apps. Many other companies recognize the safety of Store apps and leave the Store open to their employees, but lock down systems to prevent anything from outside the Store. As fjtorres said, S Mode is not used much by business to achieve that, but schools do use it that way.
  • That is what they wanted to happen but that is not how businesses have windows setup, most companies don't use many MS products for managing windows deployments. So, the consumer doesn't use the store and enterprise doesn't either.... hence, the revamp of the revamp of the revamp of the starting over stuff. This is all following the same steps of their other failures. Every consumer product that they have gone into... I heard the same thing over and over. They have lots of money so they will never abandon it. They're just not good at this stuff, although that could be an opinion.... I would say the facts back that up. Proof is the consumer product corpses.
  • fjtorres, I think that's a brilliant point about the NEW users. They absolutely do try the Store first, then often get frustrated, start searching how to find stuff, and learn it's not through the MS Store. If MS can get more apps there (games and other applications), they can avoid losing those users following their first failed attempt to find something.
  • My main issues with the MS Store are three: 1) it’s a consumer-facing ms product, and coming from Zune and WP I still have a bad taste in my mouth about that. 2) it doesn’t let me backup my games. 3) not a fan of DRM; although I do use steam for lots of games, I’d rather buy them in GOG where I can get an offline installer
  • It's preinstalled on every Windows 10 PC. People do actually visit store once or twice a month to search for their favorite apps, games (They mostly don't find them there though) and movies. The interface is all over the place though. So project Reunion and more games should help. Plus Steam is too jam packed and lag a lot.
  • I am not speaking for anyone, What comes after this is my opinion In my case, I am all for lower prices, I scour between Steam, MS, Epic, or Ubisoft. Let's just say the justfication of lowering store taxes would be lowered from 30% to 12%. That to me, would end up in game could be lowered at that store by up to 18%. So If I buy game at Steam for $59.99, then those games may worth $52.80.
  • Well, yes. Steam is a "natural monopoly" as much as one exists in this very specific space (computer gaming software--and not much else, given how well attempts to sell productivity software on Steam have worked out thsufar). They've altered the landscape completely, and the exceptions are publishers not attempting to challenge that monopoly, but simply refusing to bring their own licensed libraries to bear (e.g. Blizzard's own storefront). The Microsoft store isn't going to shake Steam any more than Apple OS is ever going to upset Windows, no matter how many times they rename it. Sure, there's a space for both, but we're not going to see an upset.