Software

Microsoft offers developers 95% of app revenue to compete with Apple, Google

The larger cut of sales will affect non-game apps sold through the Microsoft Store.

As part of Microsoft's Build 2018 conference, the company has announced a new revenue sharing model for app sales in the Microsoft Store. Starting later this year, 95% of the revenue from consumer applications, including both individual applications and in-app purchases, will go to the developer if the sale is generated from a direct or deep link, according to a blog post. However, in the event of Microsoft generating a sales lead—such as "a collection on Microsoft Store or any other owned Microsoft properties"—developers will receive 85% of the revenue for applications or in-app purchases.

According to Microsoft, the new revenue sharing terms are applicable to PCs running Windows 8.x and 10, as well as Windows Mixed Reality devices, the Surface Hub collaboration screen, and the effectively dead Windows Phone platform. The new terms explicitly exclude games—even non-game apps purchased on Xbox consoles are ineligible—and apps available in organizational licensing bundles for enterprise and education deployments are not eligible for the lower fees.

Developers can sign up for updates on the new revenue sharing terms here. Prior to this announcement, developers received only 70% of the revenue from app sales in the Microsoft Store in most cases.

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Microsoft is clearly attempting to reverse their fortunes with the Microsoft Store, as consumer interest in the native app store for Windows has been anemic since it launched with Windows 8. Since that time, it has been renamed from the Windows Store to the Microsoft Store, mirroring the company's other retail effort.

In an interview with MSPoweruser, Webrox CEO Stéphane Graziano called the store "a disaster," adding that "there is absolutely no adoption for the Windows Store, even with the user growth, because nobody care."

Graziano also highlighted the prevalence of Store-related problems, including issues with app updates and purchases not synchronizing, as well as sandboxing limitations making use of the Store impractical for common productivity tools that would not work when packaged for distribution with the Windows Store. Graziano does speak from a position of authority, as Webrox's popular Tubecast streaming app has over 1 million downloads in the Microsoft Store.

Microsoft's attempt to undercut Google and Apple may pay off long-term, however. Google's revenue sharing for the Play Store grants 70% of apps and in-app purchases, though for subscriptions which have been retained for 12 months, the fee drops to 15%. Apple has similar policies for apps and subscriptions in the iOS and Mac App Stores.

Building a slide deck, pitch, or presentation? Here are the big takeaways:
  • Starting later this year, Microsoft will take as little as 5% in revenue sharing splits for non-game apps sold in the Microsoft Store.
  • Google and Apple take 30% for app sales and 15% for subscriptions after one year.

Also see

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Image: iStockphoto/wellesenterprises

About James Sanders

James Sanders is a technology writer for TechRepublic. He covers future technology, including quantum computing, AI, and 5G, as well as cloud, security, open source, mobility, and the impact of globalization on the industry, with a focus on Asia.

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