App developers will only pay 15 percent on Play app store fees from 1 July on their first $1 million made, Google confirms
Google has announced it is cutting the Play app store fees to 15 percent on the first million dollars a developer makes on Google’s store per year.
When app developers cross the $1 million sales threshold, they will be charged the usual 30 percent for in-app purchases and downloads.
It comes after Apple in November last year announced a new developer program to aid small developers, by charging them less commission if they are ‘small’ earners. Its App Store commission fell from 30 percent down to 15 percent for small developers and businesses earning up to $1 million per year.
Google announced its Play store fee reduction in a blog post by VP Sameer Samat.
It should be noted that unlike Apple’s reduction, Google’s program offers a fee reduction to 15 percent on the first $1 million to all developers, even those making millions of dollars.
“Starting on July 1, 2021 we are reducing the service fee Google Play receives when a developer sells digital goods or services to 15 percent for the first $1M (USD) of revenue every developer earns each year,” blogged Samat.
“With this change, 99 percent of developers globally that sell digital goods and services with Play will see a 50 percent reduction in fees,” Samat added. “These are funds that can help developers scale up at a critical phase of their growth by hiring more engineers, adding to their marketing staff, increasing server capacity, and more.”
“While these investments are most critical when developers are in the earlier stages of growth, scaling an app doesn’t stop once a partner has reached $1M in revenue – we’ve heard from our partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit,” he added.
“This is why we are making this reduced fee on the first $1M of total revenue earned each year available to every Play developer, regardless of size,” he wrote. “We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed. We look forward to sharing full details in the coming months.”
Google said that it has “always listened to our developer partners from around the world and we continue to take their input into account as we build and run the ecosystem.”
App Store complaints
It is fair to say that both Apple and Google have their own respective app store critics.
Apple is facing a number of challenges over its commission levels, most notably from ‘Fortnite’ creator Epic Games, which has resulted in lawsuits and counter lawsuits after Fornite was removed from the App Store.
Google is also being sued by Epic Games.
That decision was taken after Epic allowed players to purchase in-game currency directly from itself, bypassing Apple and Google’s payment systems and the 30 percent commission they charge.
Apple has previously robustly defended its commission charge of between 15-30 percent for apps that use its in-app payment system. It also imposes strict rules that apps must comply with to appear in its App Store, which is the only venue where iPhone and iPad can download apps for their devices.
In September last year Apple was confronted by the ‘Coalition for App Fairness‘, that includes Spotify, Match Group and ‘Fortnite’ creator Epic Games, which sought to pressure Apple over its Commission charges.
Apple is also dealing with both antitrust investigations and lawsuits over its App Store policies, both in the US and Europe.
There is an EU antitrust investigation over Apple Pay and the Apple App Store, after Spotify filed an official complaint in 2019 and accused Apple of unfairly using the dominance of its App Store to give the Apple Music service a competitive advantage.
The Spotify complaint centred on Apple’s policy of charging digital content providers a 30 percent fee for using its payment system for subscriptions sold in the App Store.
Meanwhile a trade body of news publishers also wrote an open letter to Tim Cook, demanding more favourable terms on the commission Apple collects from them for online payments.