Microsoft Slashes Its Cut From PC Game Sales To Just 12 Percent As Steam Feels The Heat

microsoft store
Microsoft is taking a big step towards putting more money into the pockets of game developers by reducing the amount of money it withholds whenever a game sells via the Microsoft Store. Microsoft currently takes an industry-standard cut of 30 percent for games sold, but it will reduce that cut to just 12 percent in the coming months.

"A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so," said Matt Booty, Head of Xbox Game Studios. "You can read more about this new revenue share and our work with developers from Head of Game Creator Experience and Ecosystem Sarah Bond."

According to Booty, this switchover to 88 percent net sales revenue for developers will begin on August 1st. "We're proud to empower all developers with the platform and services they need to execute their vision and provide exceptional experiences on PC," Booty added.

Microsoft doesn't appear to be placing any other stipulations on the increased revenue that developers will now see. For example, Apple said back in November that it would reduce its 30 percent cut to 15 percent for the first $1 million in sales. However, that rate goes back to 30 percent once you surpass $1 million. Google's policy with the Play Store mirrors that of Apple.

We should note that Microsoft's 12 percent cut only pertains to PC games sold within the Microsoft Store. Xbox games are still subject to the 30 percent fee. However, Microsoft's rate now matches that of the Epic Games Store, leaving Valve's Steam as the only outlier with a 30 percent cut from each game sold. With Microsoft and Valve now in agreement on the lower rate, this puts even more pressure on Valve to capitulate.

"We'll continue listening to the community to ensure we're delivering on our promises, and respecting how players choose to play," Booty continued. "This is especially true as we head into the second half of 2021, when our work across the entire PC ecosystem has the potential to come together in a way that propels the industry forward and brings great games to more gamers around the world."

Microsoft has invested heavily in the gaming space over the past year, including the acquisition of Bethesda Studios, which brought in popular franchises like DOOM, Fallout, and Elder Scrolls. Microsoft latest indicated that it'll reserve future Bethesda games for Xbox Game Pass.