Microsoft has today announced a new revenue-sharing model for PC games that is sure to send ripples across the gaming industry. The company is moving to 12/88 model, which means developers can now keep 88% share of the revenue generated by their games, while Microsoft gets to keep a 12% starting August this year. So far, the company has been following a 30/70 model for sharing revenue.
– Matt Booty, Head of Xbox Games Studio
Microsoft’s latest move also falls in line with the Xbox division’s recent moves, especially the huge Bethesda accusation, which made it clear that the company has some big ambitions for PC gaming as well. However, the new 12/88 revenue sharing model only applies to PC games that are distributed via the Microsoft Store, and not console games for the Xbox family. The latest move by Microsoft will surely re-ignite the debate around the revenue-sharing trend in the gaming industry, and will definitely put Steam at the center of heated debates.
However, Microsoft is not the first one to do so. Epic Games has followed a similar 12/88 revenue sharing model ever since the launch of its own game marketplace – the Epic Games Store. Epic has got no love lost for Steam and parent company Valve, having attacked its 30/70 revenue sharing practice in the past and what it calls a monopoly over the PC game distribution ecosystem.
Steam continues to grow, and it still remains the behemoth in the face of alternatives such as GOG.com, Uplay, Humble, Epic Games Store, and of course, the Microsoft Store. But with Microsoft joining Epic in letting developers keep a bigger share of the revenue, the debate is sure to start anew – whether it coxes Steam into doing the same is an altogether different matter.
But it goes without saying that a majority of game developers, especially smaller studios, still bank on Steam for the success of their games. And abandoning Steam in favor of Microsoft and Epic Games Store to keep a bigger cut of revenue will be a huge risk. Looking from a broader perspective, the 30/70 model is a standard across the gaming industry – console, PC, and even mobile across Android and iOS.