Microsoft wants a bigger cut of the revenue from Windows developers

Developers building apps for Microsoft's Windows Store could potentially earn less money starting January 1, 2015. A change to the App Developer Agreement that takes effect next year would take away an appealing incentive for developing for Windows as developers could earn less money selling apps than they do currently.

Currently, Microsoft is making it attractive to develop for Windows devices with a 30-70 split. Developers would earn 70 percent of the money while Microsoft will take a 30 percent cut for payment processing, hosting, and pushing out updates. That cut drops to just 20 percent after a developer has earned $25,000 in sales.

Per the agreement:

The Store Fee for Apps made available in the Windows Store is thirty percent (30%) of Net Receipts, unless and until your App takes in total Net Receipts of USD$25,000, after which time the percentage is 20% for that App. The twenty-percent (20%) Store Fee will be in effect until December 31, 2014.

However, effective January 1, the 20 percent cut after $25,000 of sales would be eliminated and developers would just earn 70 percent on app sales no matter how much volume they generate.

In its new agreement, Microsoft wrote:

Beginning January 1, 2015, the Store Fee for all Apps made available in the Windows Store will be thirty percent (30%) of Net Receipts.

What do you think of Microsoft's new terms for developers?

Source: Microsoft (opens in new tab) via Neowin

Chuong's passion for gadgets began with the humble PDA. Since then, he has covered a range of consumer and enterprise devices, raning from smartphones to tablets, laptops to desktops and everything in between for publications like Pocketnow, Digital Trends, Wareable, Paste Magazine, and TechRadar in the past before joining the awesome team at Windows Central. Based in the San Francisco Bay Area, when not working, he likes exploring the diverse and eclectic food scene, taking short jaunts to wine country, soaking in the sun along California's coast, consuming news, and finding new hiking trails. For news tips or to connect, please message him on the Signal messaging app at +1 (424) 666-7438.

238 Comments

Lol not yet. Not so fast micro$oft.
That Giant that shot himself on the foot
It's to early for this. Why take away incentives from dev's if so many aren't supporting Windows and WP. Don't take away but give more instead would be my model. I think this is not good. Happy dev's means happy employees thus excellent applications for the platform.
MSFT should take splits based upon quality as a way to incentivize quality apps. The better the app, the less of a cut MSFT would take.
This would be brilliant, but coming up with an opjective measurement of "quality" would be difficult. Devs would be angry all the time when they disagree with the ranking.
well honestly most devs dont hit the target 25k anyway so they are really only taking it from larger devs, not to mention if youre making 25k off your app as a small dev there really is no reason you would turn your back on them to begiin with, this doesnt really affect most people and the ones it does arent really concerned.
Are you kidding?? Microsoft offers the cheapest rate for having developer account, unlike Google and apple who charge annually. Also extra 10% cut for >$25000 would mean nothing to a developer unless he is very greedy and fked up in his mind!
Agree. But why take away. MSFT should continue adding instead. More incentives over iOS and droids. Thus happier dev's and better apps against their platforms.
Because they just gave away a very feature full version of visual studios?
I don't think the average person, not developer, will get what a great deal MS just gave this week.
Ahem. Google has a low one time fee as microsoft.
And they always had this (I signed up for a Android dev account in 2009 for $25) and didn't just change the policy when they realized that nobody would build apps for them. He he...
The 10% drop down was genius (at least in theory), in that it gave incentive for developers to produce quality apps, and to keep supporting those apps. MS of couse undermined that whole thing with their ridiculous $100/app -campaigns.
And Microsoft is somehow not greedy for wanting that extra 10% for themselves?
How dare Microsoft have the exact same split as their competitors! Microsoft was generous in offering a discount for generating revenue while attracting devs, but it seems it isn't doing enough good to get people to start developing for Windows. So they are just removing an early adoption benefit for their developers.
Yeah get your facts right, google is the cheapest store to register on
It would have been right if they were giving away windows 10 for free to all windows 7&8 customers. Lets hope they do.
Sends completely fair to me, given that MS is giving away Windows on low cost devices, and Visual Studio to developers. This is the way the market is moving... charge less/free for the is, and make it up on the back end. Microsoft didn't come up with that... it's the way they are being dragged.
You should work for your employer for free.
Who said anything about free?
@mjrtoo: I was refering to salmanaltef's comment about how microsoft should make windows 10 free to windows 7/8 customers.
If anything MSFT should've made it a 10-90 split at least until they eclipsed a 1,000,000+ threshold of total apps. With that split they'd have that mark by the end of Q1 2015.
Agreed. They should have set it up in reverse: 20% fee for revenue up til $25,000 to get them to develop and then 30% afterwards.
Excellent. I'm going to create a new, competing store where I'll charge devs 10% after 2k downloads. Until then they'll be no fees They can develop multi touch apps in Visual studio for deployment via my 3rd party store. They'll run in Windowed mode just like metro apps in Windows 10.
My 3rd party store will soon be bigger than Microsoft's, and will work just like the various AOSP stores. Microsoft won't see a penny..
Of course it will be full of malware ridden junk 'cos I won't police it.
Devs will love it though 'cos I'll give them a much better cut, they can develop in nice free Visual Studio (or anything else they fancy), and it will be very open, malware friendly with no policies.
Consumers will love it because they'll get their favourite apps a bit cheaper.
I have even thought of a domain name.
windowskillerstore.com
Good luck Microsoft.
The question to ask is, how does this compare to the Apple and Androids stores?
They are and always have been 30% no matter what. So the 10% extra income has been a bonus that only Microsoft offered.
Hence incentive. Its unfortunate, but developers aren't going to abandon the WINDOWS ecosystem because if 10%. It might make it harder to get new devs studios on board,but only in the mobile space. They could just develop full applications (not Windows Store Apps) and remove the middleman.
Also note that unlike other stores, developers are allowed to use their own payment methods and completely bypass Microsoft. There are even training modules on Microsoft's official portals showing you how to do so. While it's unlikely that most would because of the work involved and the effect on the customer, the option is there to get a much larger slice of the pie if you want to.
I didn't know this. It's not likely that I'll ever write an app so popular that I'd have to roll out my proffered payment gateway, but always nice to know the option is there
Also note that unlike other stores, developers are allowed to use their own payment methods and completely bypass Microsoft.
I can state this is absolutely true. My PocketBible app by Laridian does this. It is completely free to download and use. If you want to use the advanced feature set, you pay for it, directly through Laridian. If you want to purchase additional bible versions or commentaries, you do it through the publisher. All purchases are tied to the account you set up with them when you first run the program, so you never lose anything if you need to reinstall on a new device. Microsoft gets $0 from them because of this. However, to set up such a system, you need to be a pretty solid company to be able to pull it off.
Pretty sure that option is there for Google Play -apps as well, unless they have changed their policy at some point.
Android and Apple both 30/70 I guess
If Apple and Google offer 30/70, then Microsoft should offer 15/85 or some such. A larger slice of the pie can help offset Microsoft's market share disadvantage in the eyes of developers.
Just in time to make sure they don't gain any traction.
You're right. sadly
Yeah, this can only help WP prosper... WP already has a lack of apps people want because developers are concerned with the viability of a WP user base. This may only help to cause a wider app gap than already exists. To think most apps were caught up... Now, less incentive will create another divide. Sucks ass.
Boo
Berry?
Well if I made over $25,000 with my app I guess I'd be ok with a 70% cut.
True! And that's why they did it.
Unless you have high overhead which is a real possibility.
Now even less apps will come out
Why? Do you think all apps make 25,000 dollars? Of course not, so don't say that.
This only affects apps that make less than 25,000.
Don't you mean "only affects apps that make MORE than 25,000"?
Yeah.... Where it's that chalkboard when you need it?
Yes.
As a developer, I think they should actually reverse it to attract more developers. Only a 20% cut if you are making less than $25,000 and it jumps up to 30% when you reach over $25,000 in sales.
Second that
That makes more sense.
They need to attract the big apps that likely will make more than $25,000. No one cares if some small niche app isn't available. They care that that the popular apps aren't there. However, the 10% bigger cut probably doesn't mean much to the big app developers. They care about user numbers.
That is a very good point, that I hadn't considered! But at the same time the 30% stake after $25000 would be the same cut that the other app stores would be taking as well.
Just cause Someone else only does thirty doesn't make it ok for MS. Jump off a bridge lately?
Well, dev registration is pay once and never again. They knew this was coming
I do not... and here's why... if you make a superior product and platform they will come. Set it straight now.
That actually makes a lot more sense.
This makes more sense to be quite honest.
Seconded~!
So I'm curious, are they trying to gain or lose developers? If anything they should be letting developers have a free year just to get as many apps on the store as possible.
Microsoft's ecosystem is already the cheapest ecosystem to develop and publish for lol...
And least lucrative with least number of users
Not entirely treu. The Windows Store did almost match Google Play's reveneu stream in 2013, with only a fraction of the users. If marketshare was an indication, Google Play would own the appmarket, but they dont. Apple's App Store does. Windows Phone does'nt have to grow much to overtake Google Play and become the second biggest Appstore, by reveneu stream, in the world. So I would say Android is the least apealing platform to develop for, if you want to make some money. Its overcrowded and underpayed. http://wmpoweruser.com/windows-phone-store-revenue-said-to-rival-that-of...
Not good enough lol. Make it free for their first year. 100% gods to the developer. Gotta spend money to make money. ;)
They figured they have over 500,000 apps combined now. With the release of Windows 10 way more devs are gonna come along. They have leverage just like apple and Google. I guess...?...
Windows 10 and developers may turn out to be one of the biggest flops... Stop predicting.
Nah, it won't be flop, it will be a success on a scale of 7.5, 8.0 and 8.1.
So why dont't you?
I never predicted, moron.
Watch your language.
Windows 10 and developers may turn out to be one of the biggest flops
This is predicting, to me...
Technically a Microsoft developer license is $20 for life, whereas Apple and Google charge an annual rate that's even more expensive.
We need developers,
developers,
developers,
developers,
developers,
developers,
developers,
developers... to stay away from this platform...
Let me correct you.
Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers, Developers to help.
Clap, clap, clap, clap
Slap, slap, slap, slap
I got the clap, clap, clap......
Lol
This is great. Just what the app market needed. To get bogged down.
Don't worry, just wait for Windows 10......
The mantra of the Windows Phone user, "Just wait for... Coming soon!"
I'm tired of seeing that. Y'all are the most unappreciative people in the world. Do you realize Windows 8.1 just recently came out? And it was a great freaking update. No wonder Microsoft doesn't put WP users first. At least iOS and Android users appreciate what Microsoft gives them. I'm a Windows Phone user, and I'm perfectly find with what Windows Phone is now.
You sir, deserve more upvotes!
Please look forward to it.
This ^^
Ain't gonna happen.
You have to step back and think what this means. To me, I see free Win10 updates, maybe as far back as Vista, maybe free. Looks like they're trying to make up for revenue somewhere. If they get more people on board with free Win10, devs will do better, even without the drop to 20%.
I don't see any problem with this. A 30% fee to get worldwide exposure and distribution, including an update service, on one of the worlds largest (and growing) ecosystems - with little or no up front payment! And now they even give you the development system, Visual Studio 2015 Community, for free. This is an absolute bargain!
Guess their making up for loss of renewing dev account fee, & dev tools going free
Hahaha they would be so lucky we are making Windows apps... Android and ios first!!!!
Are they deliberately trying to squish any momentum they were gaining or are they just plain stupid
A combination of both I think..
I knew that's what they were gonna do when they made the dev center subscription infinite!! Dang it!! Ots already hard enough cause the fact that you have to make $200 just to get it inserted into your bank account...
This change will make it the same as Apple's terms for their Store apps. No idea what Google charges, but I suspect it will be the same. Microsoft stood alone with this incentive, but it never really created much developer interest. So it is no big loss
Really. I mean REALLY?
Think again. They doubled the number apps in one year.
No way of knowing if it was specifically due to this incentive. The incentive only applied to apps that generated in excess of US$25,000 in sales. I doubt the vast majority of those apps would get anywhere near that level of app sales revenue. Many are free
LMAO The irony that this news is being reported on a day that the Windows Store was down for hours. Well played, Microsoft. Well played.
This is only an issue with people on these type of sites. Microsoft offer sooo much more for free/less than others but people always want them to take less. As someone who knows a little bit about marketing, Lowering your price can hurt your brand/product in many cases as raising the price.
Two steps forward, two steps back.
I believe Apple and Google both are 30% flat. Microsoft hasn't really had them all lining up, despite the discount. Thing is, that 30% means that you don't have to deal with payment processing, hosting, or deployment of updates. Microsoft needs money to maintain the infrastructure while also making a slight profit in the process. Since 30% is the going rate, this is not a big deal. The increased ease of converting to Windows plus the possibility of growth due to better operation on the desktop all can lead to more Store usage - plus Windows Phone Store actually is a fairly active marketplace. The merger creates a unique Store that caters to mobile, desktop, business, consumer, etc. There is no Android marketplace that allows you to deploy the same app to phones, tablets, and desktop/laptops. Same for iOS. And Continuum may expand to allow an adaptive UI for a single app that can shift depending on screen size and device. These are big advantages. If MS can get 200-250 million copies of Windows 10 out with millions upon millions of active Windows Store users (not counting millions of Windows Phones, etc), it makes the Store quite viable. If MS makes it easy to develop or port to Windows Store with a low investment, people will come. The Universal App store is fascinating a lot of developers. Especially since it opens up the Desktop.
I agree with this
Ok. Go jump off a bridge cause a crowd of retards thinks it's cool.
Precisely!
Fact is that they're giving Windows away free on tablets. Which grows the customer base. This is one way to make their money back
Yeah, I figured Microsoft would do this some time soon, since they're starting to depend on their services and the cloud to make money instead of Windows itself.
MSFT should be subsidizing developers to attract more of them...this is a disincentive.
So, the third place mobile platform (by a HUGE margin) is going to make it even less attractive for developers to jump on board...good choice Microsoft
Now developers will surely rush to their platforms!
Microsoft great at killing their own
Kill it in the cradle.
Coat hanger job more like
Am o reading it wrong or does it actually generate MORE money for devs. The 30% fee drops to 20%. So you earn 80%. Am I reading it wrong?
Yeah, you have it backwards. Even if you are currently earning 80% revenue due to hitting the threshold, you'll now be getting 70%.
@kellzea They will remove the 20% drop incentive next year.
The numbers seem fair $25k is no small feat of success this change probably wont effect that many developers
Wow. Way too early.
With over 80% of market share and nearly 1.4 million apps in the store, who needs developers anyway? Smart move!
This is everything we need to definitive close the store. They need to incentive developers, not make they go away.
The way I see it there gonna scare the developers they have now away. They are moving way to fast. I say draw more people into the windows platform and then strike. Guess I wont really be seeing Candy Crush, Deer Hunter 2014 etc anytime soon.
You weren't going to see them regardless. No matter what Microsoft does, they wont get devs who want them to go away. I mean, they collaborate a bunch with EA, and still WP doesn't have pvz2.
One less reason to make apps. We need that. /sarcasm
I was hoping they would just move to an 80/20 split for everyone. Make it up through volume. On the other hand, they do provide the most tools and assistance by far for free. Along with having access to BizSpark, etc.
God companies can be so greedy Microsoft is one of the richest companies in the world they don't need to do this I'd understand if they weren't a 60+ billion dollar company
Are you retarded? Just because a company is big doesnt mean everything should be free, tell me, how much do you think allll those giant servers costs to run a day? How much do you think it costs to pay devs to develop windows 10? How about windows phone? How much do you think it costs to manufacter the phone your holding? How much do you think it costs for all the employees in all those plants? How about Onedrive, think thats developed for free? How about all those dev tools they give away for free? Do you think the devs built them for free? NO. so why.. in the fuck do you think its "greedy" to take 30%? You are so damn ignorant, grow the hell up and learn how the world works.
This. It can easily take a year to develop a decent app (especially a game), $25k is very little for a year's work.
Look at Microsoft's bottom line....and their huge profits. Then reassess your comment..!
Microsoft can afford to incentivise development on the Windows platform.
Oh, so a company should stop trying to make a bigger profit because they already make one? what is this china? incentivise? is paying a 1 time cheap fee to dev for life and being given an expensive tool for free not enough?
What are you, 9 years old?
Because developers are gagging to climb on the WP bandwagon? Maybe they should ignore Satya's advice to women and ASK for a reduction, say 20% flat rate until the WP platform gets closer in market share to android and ios.
Nothing is free in this world.
In the app store / windows ecosystem current state, MS should let developers keep almost all the revenue. MS = idiots
Am I the only one that reads this as a 10% REDUCTION in the fees Microsoft is collecting? They currently collect 30% of the revenue, then it will be 20% if it is a popular app. I think this article needs to be revised.
Yes, you're the only one.
Until 31st December - devs will earn 80% of app revenue past the $25,000 threshold
After 31st December - devs will earn 70% of app revenue regardless of how much revenue they make.
Oh good, I thought they'd never find a way to get rid of all those pesky developers, with their annoying support of the Windows ecosystem. Finally, we can have no apps in peace.
Hilarious
Lmao these idiots just keep shooting themselves in the foot
A lot of you miss the big picture... With a unified store, app prices can go up slightly too. Plus, you can make money in other ways like in-app features, etc. The costs get offset that way.
Hmm, I agree... Too soon. Are they really that strapped? Hmm.. Just wondering the why...
My assumption is that windows will start becoming free at some point and this how to recoup those loses. As well, if Windows does go free, there will be a lot of developer interest. If windows does go free, this makes sense.
Make sense
So they're lagging behind ios and android and they are trying to be greedy? They obviously need to hire smarter people....
Bad idea.
Hold Up *Nate Doggs Voice*
Seems fair to me.
With the merging of W and WP dev portals I was wondering when the > $25,000 would come to WP, but it looks like it is going the other way and they are bringing the same rates for WP over to W. Now I don't think it is bad because having multiple payout rates is a bit messy. What I hope this means is that the also absorb some of the other 'hidden' fees such as the 13.9% fee developers pay ON TOP of the 30% fee for carrier payments as opposed to credit card payments in certain regions. I think if they are going to streamline it to a uniform 30% (taxes obviously remain varied per region) and do away with the other add on fees it will be great! Unsure if they are doing that tho?
So hurry up and he your apps in by the end of the year... Hummm... Duh!
You do know that it costs money to manage and maintain the store right? Or would you just prefer a stale store that never gets updated? Someone has to pay for it.
Um, they were earning 30% until the app makes $25k then it drops to 20%, now they want 30% no matter what. How were they not making money for the store with the present arrangement? Any comparison to iOS or Android is ill relevant, WP has a much smaller market share and also there is still an app gap with some major types of apps missing. The way to grow the store is to make it attractive to developers. Yes Windows 10 is (supposed) to have universal app ability, but not every app written can or will be a Universal app. I really doubt it is going to work as easily as many think, write an app in universal and it works across everything, um think about it, not happening.