Lower Xbox Games Store Cut Planned by Microsoft

Since the release of the Xbox Series S/X, Microsoft has made numerous changes and decisions that have stirred up its competition. This includes basically throwing money at studios so that Microsoft can release its games on Xbox Game Pass at launch - more prominent examples include Outriders and MLB The Show 21.

The console market will never be the same again if Microsoft ever acts on its planned lower Xbox Games Store cut.

Microsoft has also since doubled down on its efforts to make backwards compatibility an integral part of the Xbox gaming ecosystem. With that said, Microsoft's next move, as detailed in a leaked document, might just end up being the biggest yet.

Microsoft Is Planning to Lower Xbox Games Store Cut

This is the leaked document detailing Microsoft's plans and intentions.

Just to refresh everyone's memories, Microsoft has already cut its revenue share through the Microsoft Store by more than half. Starting on August 1, Microsoft will only take 12% of all PC games sales listed on the Microsoft Store, down from 30%. Moving forward, this effectively allows Microsoft to match Epic Games' revenue share through the Epic Games Store. More importantly, Microsoft's decision will allow it to undercut Valve's digital games distribution platform, Steam, which continues to dominate digital PC game sales charts.

Now, according to additional information found on leaked confidential documents, it seems that Microsoft has also explored doing the same thing to the Xbox Games Store. The said document, which was filed as part of the ongoing legal battle between Epic Games and Apple, revealed that Microsoft has considered changing up its fees for digital games on the Xbox One and Xbox Series S/X consoles.

The details found on the January 2021 document include information regarding the adjustments on both the Xbox consoles, as well as Windows 10 PCs. It states that "all games will move to 88 / 12 in CY21". This means that Microsoft intends to give 88% of the sales to the publishers and taking only just 12% sometime this 2021.

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If true, it would mean that Microsoft would go from asking for a 30% cut on digital console sales to just 12%. This change would undercut PlayStation and Nintendo by more than half across each of its respective digital games marketplaces.

We should take note that the leaked documents are merely an internal proposal at the moment. It may happen soon, as 2021 has yet to end. However, Microsoft has only just announced the changes to the Microsoft Store for the PC. This means that we can't rule out the possibility that Microsoft may have also since changed its mind.

Simply put, we'll never know what will happen until it happens. If it's any consolation, the lower revenue share for digital PC game sales on the Microsoft Store is a sure thing. The changes will be effective starting on August 1 later this year.

In addition to information regarding the proposed lower Xbox Games Store cut, the heavily redacted document also contains other details. This includes Microsoft's plans to reduce PC revenue share. In exchange, Microsoft will receive streaming rights. Most likely, this plan pertains to the xCloud digital games streaming platform.

At the moment, of all the plans detailed in the document, only one has come to fruition. It remains to be seen if Microsoft plans on acting on the other plans outlined in the document, aside from lowering its revenue share on the Microsoft Store.

Ray Ampoloquio
Ray is based in the Philippines. He is a lifelong gamer and a PC hardware enthusiast. He builds and repairs laptops and computers for friends and family in his spare time. You can find Ray on Twitter.