Google follows Apple and reduces its Play Store commission

Google follows Apple and reduces its Play Store commission

Google follows Apple and reduces its Play Store commission

On their latest Android Developers Blog, Google confirmed that they would significantly reduce its fee for digital goods sales on their Play Store. This change would see the revenues of most developers increase, though these reduced fees will only apply to a developer’s first million in revenue. 

On July 1st, digital goods sales on the Google Play Store will see Google’s fee drop from 30% to 15% for each developer’s first $1 million in revenue. This change closely follows Apple’s revenue share changes with its App Store, which made identical changes to their systems. 

While this move is a positive one form most app developers, this change has arrived while both Google and Apple have face lawsuits over their developer fees and the lack of competition within the Android/iOS app markets. Epic Games leads these lawsuits, claiming that the revenue shares of Apple and Google are excessive and that the app market needs to be opened to competition. 

In recent months, Apple and Google been in hot water for taking such a large revenue cut from apps on their storefront. Their 305 revenue shares can often allow Apple/Google to generate larger profits on applications than their developers. These changes from Apple/Google will allow the company to claim that they have alleviated these concerns while still taking a huge 30% revenue slice from their top earners.

With this move, Apple wants to show regulators that they are reacting to their concerns. That said, this process is a clear attempt to appease regulators while protecting their largest revenue streams. This is the opposite approach to Valve’s strategy for revenue sharing, which sees developers gain a larger revenue share once they have generated a specific amount of revenue on Steam. For example, Steam takes a 30% revenue cut until sales total $10 million, a 25% cust from $10-50 million, and a 20% cut beyond $50 million. 

Both Apple and Google have confirmed that their 30% revenue cuts were double what they could have been, highlighting the need for competition within the app distribution market. Today’s move from Google, while positive, is a PR stunt. Google wants to satisfy enough developers to make its broader criticisms go away. 

Google’s approach, like Apple’s, is a clear attempt to silence wider criticisms by appeasing smaller app developers. That said, companies like Epic Games, the creators of Fortnite, will not benefit from this move in any way, as they earn over $1 million per year through their apps.       

 

Google follows Apple and reduces its Play Store commission  

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