Microsoft announced that its online store was slashing the money it takes from PC game developers from August onwards to just 12% – the same percentage taken by the Epic Games Store (EGS).
It’s unsurprising why Microsoft is doing this – rival and market leader Steam keeps 30% of game revenue (though the figure is lower as sales rise); a practice that has long irked game developers on its platform.
“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 Head of Xbox Game Studios Matt Booty in a post.
Like Epic, Microsoft is clearly hoping that fed-up developers will be attracted by a better revenue sharing arrangement. Epic, however, has gone a few steps further and poured hundreds of millions into sealing exclusives for its game store.
Apple spins this as “losing money”, but spending now in order to build a great, profitable business in the future is exactly what investment is! It’s equally true whether you’re building a factory, a store, or a game.
— Tim Sweeney (@TimSweeneyEpic) April 10, 2021
According to a PC Gamer report, the company is set to lose a staggering US$330 million (~RM1.4 billion) this way, though it defends the furious spending as calculated and necessary to build market share.
Microsoft has notably avoided such a drastic approach (for now), but signalled that the game studios it owns (like recently acquired Bethesda) would produce exclusives for its platforms. That makes a lot of business sense – why else would you buy Bethesda’s parent for US$7.5 billion (~RM30.8 billion)?
So we’re seeing two different anti-Steam strategies here. Epic wants to take Steam down by splurging on exclusives. Microsoft seems to want to do it by acquiring developers to produce exclusives – to be fair, the software giant has the resources that Epic doesn’t.
We’ll find out soon enough if either strategy works. Players are creatures of comfort and it’s going to take a lot for them to jump ship.