Monday December 4, 2023

How Microsoft Could Change the Gaming Industry

  • Microsoft lowered the cut it takes from developers on its game store to 12% and may be considering the same move for console games.
  • Most game platforms of either type charge a 30% rate.
Microsoft/Design: Alex Brooks
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As Apple and Epic Games duel in court over the future of gaming revenue, Microsoft may render the final verdict.

Last week, the Xbox maker rattled the gaming industry with its announcement that it would reduce the cut it takes from game developers who sell on the Microsoft Store from 30% down to 12% — a drop from Apple and Steam’s rate down to Epic’s.

Last year, “Fortnite”-creator Epic implemented a workaround to dodge Apple’s 30% fee, triggering a legal battle that began its trial on Monday.

Microsoft’s move is part of a broader push to attract users and developers.

  • The company is revamping its online store to allow more apps, third-party commerce within apps, and address complaints about speed and usability. 
  • Microsoft had been in talks to buy Discord, a popular instant messaging and video platform popular with gamers. Those talks have ended for now, and Discord is considering going public.

The looming question: Will Microsoft make the same move for console games? Like Sony and Nintendo, it charges developers a 30% fee for console game sales. 

Leaked documents related to the Epic v. Apple trial suggested that Microsoft was planning on dropping the console games fee to 12%, but the company told The Verge it has “no plans” to do so “at this time.”

If Microsoft does make that switch and brings in a new wave of game developer talent to its platform, it could pressure the other big market players to follow, radically altering the economics of game development.

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