Microsoft To Pay Higher Share Of Revenue To PC Game Makers As Rivals Apple, Google Face Antitrust Scrutiny

Microsoft Corp. MSFT has updated its store terms so that PC game developers will receive a larger revenue share from the sale of games through its app store.

What Happened: Microsoft said that from August 1, the developer share of Microsoft Store PC games sales revenue will increase to 88% from 70%.

“Having a clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so,” Sarah Bond, the Microsoft corporate vice president in charge of game creator experience, wrote in a LinkedIn post.

Microsoft also noted that its upcoming ID@Azure program will empower independent game studios, start-up game developers, and individual creators to take full advantage of Microsoft cloud services as they build and grow their games.

See Also: 4 Microsoft Analysts Break Down Software Giant's Q3 Earnings, Cloud Strength, Long-Term Outlook

Why It Matters: Microsoft’s move is part of its efforts to bring more games to the Windows 10 operating system.

While reporting its third-quarter earnings results on Tuesday, the Redmond, Washington-based tech giant said that “Xbox content and services” revenue grew 34% year-over-year.

Microsoft’s new revenue share plan now matches that of “Fortnite” video game developer Epic Games Inc., which too takes a 12% share of the revenue from game sales.

The change in Microsoft’s revenue share plan also comes as the tech giant's rivals — Apple Inc. AAPL and Alphabet Inc.’s GOOGL GOOG Google — face antitrust scrutiny.

Apple and Google have been facing several allegations surrounding their app store policies, including fees for digital purchases, and are embroiled in a high-profile legal battle with Epic. In November last year, Apple slashed its App Store fee to 15% for small businesses earning up to $1 million per year. The move was replicated by Google in March this year.

Price Action: Microsoft shares closed 0.8% lower in Thursday’s regular trading session at $252.51 and further declined 0.5% in the after-hours session to $251.18.

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