Microsoft recently announced that it was reducing its share of profits on the Windows Store to 12%. Beginning August 1, developers posting to the company’s PC platform will receive 88% of every sale; previously they only received 70%. This change was designed to make the Windows 10 Microsoft Store more attractive to game developers and publishers.
However, the profit split adjustment will not be reflected on Xbox consoles. Microsoft will still take 30% of sales made on Xbox x series|S and Xbox One. We’re not sure when the console landscape will pay off more for developers, but at the very least, it’s good to see these changes happening on PC. It is clear that Microsoft wants to establish a leading base in PC gaming, especially when platforms like Steam and Epic game store are in the foreground.
This move created a lot of buzz suggesting the pressure is on Valve to follow suit. Steam currently takes 30% of every sale made; the Epic Games Store (and soon Microsoft) only takes 12%.
Does this put pressure on Valve?
Steam is the most popular market for PC games; even with this new pressure, what incentive could there be for Valve to reduce its cut to 12%? Steam had 62.6 million daily active players in 2020 according to a Valve blog post. Epic Games only managed half in 2020 to 31.3 million daily active players. Microsoft hasn’t released these numbers to the public, but it’s safe to say their store isn’t used often.
Steam wins by far, which is why Microsoft and Epic have taken such a drastic decision to reduce its reduction to 12%; it is a bold tactic to help them catch up. Raising the profits of publishers is a good way to ensure that these publishers offer games on their platform.
However, this announcement would not encourage many users to make the switch. The average gamer doesn’t understand how much money the developers get with each game they buy. And even if they did, most wouldn’t want to upgrade to a slower platform with fewer features.
Of course, conscious consumers will feel inclined to switch platforms if they know that more of their money is going to developers. But there just aren’t enough people who think this way. Unless Microsoft plans to go one step further by implementing additional incentives to attract Steam and Epic Games users, Value won’t feel any pressure.
Epic Games have tried a lot
Epic Games has stepped up its efforts with limited exclusivity. Borderlands 3 launched on Epic Games six months earlier on Steam, making it hard for die-hard fans to wait. This has forced users to access its platform whether they like it or not, but it has caused an uproar within gaming communities. People weren’t happy to have to download another app.
Epic Games also brings real exclusives on its platform. Something like World War Z cannot be played on Steam; it’s an easy way to increase the number of active users on the Epic Games Launcher every day. The company even offers free games every two weeks in an attempt to entice users to start patronizing its launcher. It clearly worked, because some of these games were very successful; titles like Metro: Redux, Alien Isolation, Abzu, and Watch Dogs 2 are hard to say no.
However, it did not work well enough. Steam doesn’t do any of these things for a reason: it doesn’t need to do it with the large footprint it already carved out by being the first in the piece. Epic Games is diversifying its incentives to catch up, and while it works, that hasn’t forced Valve to try new things.
The valve does not need to change
Many users are now considering Valve lowering its reduction to 12% now that Microsoft has done so. Unfortunately, Valve has no reason to change. The pressure that such a movement exerts on the company is not sufficient for great movements to occur. The only way for Valve to do this is if its competitors are really starting to take over the market.
Valve has to be convinced that reducing its reduction to 12% would in fact ensure that developers and users stick to its platform. As it stands, the company is way ahead of the competition and would need more pressure to make such a change.
88% means the world to developers
While Valve has no reason to change, it’s obvious that this change is important for developers. Receiving 88% instead of 70% of every sale is important; that’s an 18% increase. Undertale sold for $ 9.99 on Steam, and in 2018 it racked up around four million players. With an 18% increase in revenue, that would have put an additional $ 7,200,000 in the pockets of Toby Fox and his team.
Undertale was a smash hit so it didn’t matter, but that money would have meant the world to developers who needed a few extra bucks to stay in business or give the green light to their next project. Valve has no reason to make this change from a business perspective, but it would benefit developers and reduce the dire state of video game development; it could really revolutionize the art form.
However, business stops progress; Valve won’t do anything until he feels threatened. Either way, I’ll be buying games through the Microsoft Store or the Epic Games Store whenever possible, so I know more of my money is going to the people who actually created the work.