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

[MacRumors]

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.

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

 

[opeter]

Nice move, I guess.

However I am trying to use more and more opensource software as alternatives to commercial applications.

 

[Plutonius]

Most developers will continue to develop for multiple platforms.

 

[brinary001]

Wow I'm sure all 10 of the Windows Store developers that are left will be thrilled
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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.

 

[Petetastic]

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

 

[fuchsdh]

Wow I'm sure all 10 of the Windows Store developers that are left will be thrilled

Which is why they're doing it, but it's certainly a smart move.

As Apple has shown, depending on your business orientation, market share is irrelevant. iOS remains the platform of choice because that's where people make their money. Microsoft's revenue sharing makes it more likely that the platform becomes more attractive because you'll be making more off each customer no matter the respective install sizes (the universal nature of Windows apps also helps in this regard because it's more "free" reachable users for the amount of effort you have to put in.)

This is something they really should have tried in the Windows 8 era, because it would probably have been a better strategy than "pay app developers to make a bad version of their app for our phones" strategy that ultimately didn't work.

 

[ArtOfWarfare]

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.

 

[Marshall73]

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.

 

[jayducharme]

developers will receive 95 percent of the revenue earned from sales of their apps or in-app purchases on the Microsoft Store, excluding games and apps sold to organizations, but only when a customer uses a direct link to access and purchase the app

Those are some important stipulations. Games are a huge app category. And since MS is so big into business, a lot of their sales are to organizations. Narrowing it further is the requirement of a "direct link". Though on the surface (no pun intended) this sounds impressive, it will probably have little impact.

 

[Marshall73]

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.

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.

 

[Kabeyun]

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.

 

[NT1440]

THey already tried a one-time payoff model, maybe this will be the thing that sticks? Who knows.

I like what MS is doing for makers, but before anyone gives MS credit for “doing right by developers” this is clearly a last resort for them. This isn’t principled (though wait for the praise from PR op-eds), this is desperation for their Store.
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MS may be undercutting the others nominally (that is, 95 is a bigger cut than 30). But it’s impossible for me to imagine this having any effect at all on the iOS/Android duopoly. There are something like twelve devices out there running Windows Mobile.

This is for Windows 10, not their (dead) mobile platform.

 

[nwcs]

Did someone let Balmer come back to make some decisions?

 

[guzhogi]

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?

 

[timber]

I don't have any data to back it up but I'm pretty sure that the revenue splits are one of the great reasons why finding any serious app on a app store is like a needle in a haystack.

Apps stores are irrelevant on desktop OSs and powerful apps are almost non existent on Mobile OSs.

So MS move is positive, not sure if relevant, 95% is still less than 100% and nobody needs stores in corporate environments where a lot of sales are made.

 

[NT1440]

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?

When it was still in it's infancy I thought it was a great deal for developers seeing as Apple is hosting mostly everything.

Today, nearly 10 years later, given the investments Apple has made to their infrastructure I think lowering it to a 20% cut (15% ideally) makes for a fair shake.

 

[trusso]

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.

 

[NT1440]

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...

 

[Cosmosent]

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 !

 

[lec0rsaire]

They can undercut Apple all they want but since piracy is more rampant on Windows, iOS and Mac development will probably still bring in more revenue for devs. Users of both OS tend to spend more money on software.

In fact, many cities around the world are using open source software like LibreOffice in order to stop paying MS’s licensing fees every year.

 

[Defthand]

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 support your preference as a buyer. I prefer buying directly from the source, whether it’s software, ebooks, or an electric toothbrush. The product information, trial offers, promotions, upgrade offers, support, and purchaser rights are more generous, and more valuable than Apple’s custodial benefits.

 

[cmwade77]

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

Because Microsoft still owns the desktop market, like it or not, especially when it comes to businesses. This is shifting over time, but it will take a while. And since the only store Microsoft has left is for the desktop/laptops, this is no competion to iOS, rather to developing for macOS.

 

[MartiNZ]

This is for Windows 10, not their (dead) mobile platform.

There is still the Store app on Windows Phone, and the built-in apps are still getting updated occasionally! Maybe if we get that new SE with nice specs there will be a worthy alternative to Windows Phone; its death is a sad thing.

Recently visited the Windows 10 Store and was vaguely surprised it is still that badly curated. Apple putting iTunes on it was interesting, but the fact that it was no different from the previous version made a bit of a mockery of what Microsoft tried to do with Windows 8. The then Metro style was a real point of distinction and they supported it for a while because they couldn't get other developers to, then just gave up on it, but couldn't extricate it from 10 and made the app system much worse in the process. It's a real shame the post-PC era didn't quite become a thing for them, and this just seems like a last ditch thing before shutting up shop for third party apps. That would certainly make the store look more appealing, but would also make the Windows 8 way look better again. Hard times for Windows.

 

[BeefCake 15]

Nice move, I guess.

However I am trying to use more and more opensource software as alternatives to commercial applications.

This! I end up donating the money to FOSS instead.

Did someone let Balmer come back to make some decisions?

No chairs were thrown in the decision making process.

 

[btrach144]

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.

Do keep in mind there is a lot more going on than just hosting the store. There’s an entire development/product team, support team, and leadership.

Source: work for MS but speaking on my own terms. Not officially representing Microsoft here.