Microsoft woos developers with smaller app store cut

By Stewart Mitchell on Dec 9, 2011 12:31 PM
Filed under Strategy

Trumps Apple.

Microsoft has laid out its plans to attract developers to its Windows Store, with the company touting more generous revenue-sharing models than its rivals.

The Windows Store will be the only way Windows 8 users can purchase the new Metro Style apps, and Microsoft will attempt to attract developers by taking a smaller cut than Apple and Google on successful apps. Apps will be priced from $1.49 to $999.99, although free and trial apps will also be available.

Apple has relied on a huge user base to justify its 30 percent commission on apps sold through its store, as well as taking a slice of in-app sales. Microsoft also plans to take an initial 30 percent, but will reduce its commission on strong selling apps.

“The revenue share base is 70 percent, but when an app achieves $25k in revenue — aggregated across all sales in every market — that app moves to 80 percent revenue share for the lifetime of that app,” said Ted Dworkin, partner program manager for the Store in a Microsoft blog.

“So, once an app establishes a bit of success, we increase the revenue share to 80 percent to reflect and reward that success,” he said.

“When you look at the breadth of the Windows customer base, the potential for innovation on the platform and the appeal of new devices that take advantage of these software and hardware advances, we expect an entirely new scale of economic opportunity for app developers,” Dworkin said.

In-app payments

Microsoft is also hoping to attract partners by shunning the in-app payment commissions that have angered companies using Apple's platform.

Companies such as publishers that want to charge for content through their apps will be able to use either their own payment processes or Microsoft's in-house option, the company said.

“Developers have the freedom to use Microsoft’s transaction service or use their own and Microsoft will take 0 percent of in-app purchase revenue,” the company said.

It's not immediately clear, however, whether Microsoft will waive the in-app commission only on the developers' payments systems or also on its own. The company was unable to comment at the time of publication.

The Windows Store itself is a full-screen Metro style app – built using HTML5 and JavaScript.

This article originally appeared at

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Microsoft woos developers with smaller app store cut
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