Microsoft has just announced a big cut to the amount of revenue it takes from games on Windows. The software giant is reducing its cut from 30 percent to 12 percent from 1st August, a huge shake-up in the world of gaming.

The decision is definitely a clear bid to compete with Steam, making itself more attractive for developers and studios. The end goal is to bring more PC games to the Microsoft Store.

“Game developers are at the heart of bringing great games to our players, and we want them to find success on our platforms. A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so,” Matt Booty, head of Xbox Game Studios at Microsoft said.

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These changes will however only affect PC games and not Xbox console games in the Microsoft store. Microsoft doesn’t say why it’s not reducing its 30 percent cut on Xbox game sales. However, it’s likely because its model for the console business model is entirely different from that of the PC.

The revenue cut Microsoft announced matches the same revenue split that Epic Games offers PC game developers. Meanwhile, Valve still takes a 30 percent revenue cut on sales in its Steam store. Although the cut is reduced to 25 percent when sales hit $10 million, and then 20 percent for every sale after $50 million, Microsoft’s deal is still significantly better.

Steam is still the industry leader among developers and the revenue cut might just be the incentive developers need to switch to its side. Given the size of the Microsoft corporation, its a challenge it might be able to pull off.

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