Microsoft follows Epic and cuts Xbox PC revenue share to 12 percent

'It seems a good time to do that,' Xbox Game Studios head Matt Booty said.

Kevork Djansezian / reuters

Developers launching PC games on the Xbox storefront will soon be entitled to more money than ever before. Microsoft has long employed a revenue-sharing model of 70 percent for creators and 30 percent for Xbox, but starting August 1st, that’s shifting to 88 percent for developers and 12 percent for Xbox, at least when it comes to PC releases. Xbox console developers won’t see a change to the existing revenue-sharing model.

“Some news, this will be a good one, is that starting August 1st, we are going to be moving our rev split for developers from 70/30 over to 88/12,” head of Xbox Game Studios Matt Booty told Engadget. “It feels like right now, with our sort of re-invigorated push on PC, it seems a good time to do that.”

This revenue split may be new for Xbox, but it’s definitely not a fresh idea for the industry.

Booty didn’t say the words “Epic” or “Apple” during our conversation about revenue-sharing models in 2021, but really, he didn’t have to. For the past year, Epic Games and Apple have been locked in a fierce public battle over App Store policies and the amount of money developers receive when doing business on iOS. Epic says Apple’s practice of taking 30 percent of every transaction on the App Store is exploitative, and especially harmful to small developers and players.

The Epic Games Store logo.
Epic Games

Epic launched its own PC games store in 2018 with a revenue split of 88 percent for developers and 12 percent for the company. After this move failed to change any policies at Steam, one of the original arbiters of the 70/30 split, Epic CEO Tim Sweeney brought the battle for rev-share evolution to Apple’s doorstep. The companies spent some timeswapping lawsuits, and Epic’s case against Apple is set to go to trial in Oakland, California, on May 3rd, 2021.

Apple argues the 70/30 revenue split is standard across the industry, with companies including Steam, Google, Microsoft, Sony and Nintendo using the same model.

Apple’s April 7th legal filing reads, “Microsoft launched Xbox Live Marketplace in 2005, Sony launched the PlayStation Store in 2006, and Nintendo launched the Wii Shop Channel that same year. Most of these platforms, like Steam, charged a 30 percent commission.”

With today’s announcement out of Xbox, Apple has one fewer example in its arsenal. While Microsoft has historically used a 70/30 split, the company is switching to Epic’s new standard of 88/12 for PC releases.

“In terms of who we're listening to, first and foremost that's our developers, right?” Booty said. He continued, “We're looking to improve things [and] now is the right time to do that.”

Booty didn’t share any information about changes to revenue sharing on the console side, which accounts for the bulk of Xbox’s business. The company has been bulking up its PC arm in recent months, most notably with the launch of EA Play for Game Pass on PC.

Broadly speaking, Xbox is on a mission to unify its PC and console ecosystems, Booty said. Last year developers brought DirectX 12 Ultimate features to Xbox Series X and PC, including raytracing, variable rate shading and mesh shaders. Microsoft has a roster of PC-focused developers under the Xbox Game Studios banner, including Obsidian, id and inXile, and they're building new experiences for consoles and PC at once. Additional Xbox Series X elements like DirectStorage and auto HDR will hit desktop platforms as well, Booty said.

Halo: Infinite
Xbox Game Studios

To that end, Halo: Infinite multiplayer will support cross-play and cross-progression between Xbox consoles and PC when the game comes out in the fall.

“Hopefully the Xbox experience on console and the Xbox experience on PC will start to become one and the same,” Booty said.

Starting August 1st, there will be at least one difference between the PC and console platforms for Xbox developers — how much money they can make.

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