Microsoft Store's Revenue Sharing With Developers Will Soon Significantly Undercut Apple and Google

Microsoft on Tuesday announced changes to its revenue sharing model with developers that will significantly undercut Apple and Google.

Starting later this year, the company says developers will receive 95 percent of the revenue earned from sales of their apps, in-app purchases, and new subscriptions on the Microsoft Store, excluding games and apps sold in volume to organizations, but only when a customer uses a direct link to access and purchase the app.

If the customer was referred to the app by Microsoft, such as in a featured collection on the Microsoft Store, developers will receive 85 percent of revenue. The new fee structure will apply to Microsoft Store purchases on all Windows and Surface platforms, but excludes purchases on Xbox consoles.

Microsoft presumably hopes reducing its commission to just five percent will encourage developers to create apps for its platforms. Microsoft, Apple, and Google all currently pay developers 70 percent of revenue earned from purchases on their app stores in what has long been the industry standard.

As of the end of 2017, the App Store and Google Play had an estimated 2.1 million and 3.5 million apps available. Microsoft last confirmed having over 669,000 apps in what was then called the Windows Store in September 2015.

Tag: Microsoft

Top Rated Comments

(View all)

ArtOfWarfare

23 weeks ago

This sounds extraordinarily fair and I love it.

Apple tries to justify their cut saying that they're promoting your app which is leading to some of your sales. That's total BS - 99% of my sales came from when MacWorld ran an article on an app I was selling. If Apple really did anything to drive my sales, MacWorld wouldn't have had such a major impact.

I love that Microsoft isn't trying to argue they're driving all of your sales, and will only be taking a marketing cut when they have actual evidence that their promotion had something to do with your sale.

The 5% is still a bit... well, that's way more than what it costs Microsoft to host the store and your app and facilitate everything, but it's small enough that I don't mind (particularly when it's just 1/6th of what other stores charge.)

I really want to just host my apps myself for iOS. I'm grudgingly willing to give Apple $99/year for a signing certificate, but the 30% cut to put your app in a store where it gets less attention and fewer downloads than it could get elsewhere* really ticks me off.

*Perhaps theoretically. Apple doesn't even let you test that theory, lest you discover how useless they are.

Rating: 17 Votes

Petetastic

23 weeks ago

Given the number of people who are actually enamoured with MS, I don’t expect this to be much of a draw.

Rating: 7 Votes

brinary001

23 weeks ago

Wow I'm sure all 10 of the Windows Store developers that are left will be thrilled :rolleyes:
[doublepost=1525792192][/doublepost]

Most developers will continue to develop for multiple platforms.

Yes but only if they're required to professionally, be it for a company or freelance. Otherwise why would you develop for any other platform besides Apple? I say this as a dev myself. The idea of targeting a thousand different devices all with different resolutions, processing power and other specs, just sounds like hell.

Rating: 6 Votes

Marshall73

23 weeks ago

So, make a website for your app, pay for the site design and hosting and the payment processing fees. Now pay for promotion, SEO and advertising. Send a copy of your app to reviewers and influencer bloggers.

Rating: 4 Votes

guzhogi

23 weeks ago

The 5% is still a bit... well, that's way more than what it costs Microsoft to host the store and your app and facilitate everything, but it's small enough that I don't mind (particularly when it's just 1/6th of what other stores charge.)

I really want to just host my apps myself for iOS. I'm grudgingly willing to give Apple $99/year for a signing certificate, but the 30% cut to put your app in a store where it gets less attention and fewer downloads than it could get elsewhere* really ticks me off.

I wonder how much it really costs Apple to run the App Store? Obviously, they have to pay for the servers, the power, their internet connection, and people to maintain all that. Makes me wonder what the break even % is?

Rating: 3 Votes

Cosmosent

23 weeks ago

Hey Microsoft,

if you want to gain some traction, figure-out how Devs can offer their apps via their own websites, while still using your Payment Infrastructure ...

the main problem with the iOS App Store is NOT Apple's cut, it's that Apple has a complete Stranglehold on App Discovery ... it was Broken Badly before Phil Schiller took over, but now it's Catastrophically Broken ... their Rankings algorithm is horrible ! ... NO User Controls for Search ... the single-best thing you could do to gain traction is to let Devs start selling their Apps outside of any App Store.

The strategy will need some kind of Trusted Symbol / Mechanism in-place, but shouldn't be too hard to implement.

The iOS App Store is primarily for the Young & the Dumb ... by enabling Devs to sell their Apps OUTSIDE of an App Store, then the Educational Bar can be raised, perhaps significantly.

You might be surprised how many iPhone Users have NO clue as to how much DRAM is in their device, OR that it actually contains any DRAM.

All smartphones are simply "fancy computers," but I'd bet half of ALL iPhone owners don't even know that.

That's just one example of where the Educational Bar needs work !

Discovery is MORE-important than pricing.

BTW, the ONLY people on the planet who think the iOS App Store is doing well ARE Game & Streaming Media Content companies ... traditional Apps have had little / NO success.

But that can easily change !

Rating: 2 Votes

NT1440

23 weeks ago

Good for Windows developers. I think Apple's 30% cut is outrageous, but they're never going to change it.

Apple boasts about their steadily increasing "Services" revenue, but I'm willing to bet that a ton of that cash comes from the 30% fee they skim off the top of developers and media producers. Nothing to boast about there.

Or, you know, you can actually look at their financial filings to learn about what their services revenue consists of...

Rating: 2 Votes

trusso

23 weeks ago

Rating: 2 Votes

Kabeyun

23 weeks ago

MS may be undercutting the others nominally (that is, 95 is a bigger cut than 70). But it’s impossible for me to imagine this having any effect at all on the iOS/Android duopoly. The number that matters is the number of apps sold, not the number of apps available. There are something like twelve devices out there running Windows Mobile.

Rating: 1 Votes

Marshall73

23 weeks ago

They have to do something to encourage developers to use their store but it’s a bit of a difference from having the only store on a billion devices like Apple does and can justify the price of entry.

Microsoft - Sell on our store that is rarely used
Apple - Come sell on our store that is the only legitimate place to buy stuff for i devices.

Will probably be as successful as the Mac App Store.

Rating: 1 Votes

[ Read All Comments ]