Google Play commissions dropped from 30 percent to 15 percent, following Apple’s move last year. Here’s why the company has introduced the change.
Google via a blog post has announced a major change to its app store policy, under which it will cut its Play commissions globally for developers that sell in-app digital goods and services by half. This change will go into effect starting July 1. Apple brought in a similar change to its policy last year.
According to the blog post, the company is reducing the service fee Google Play receives when a developer sells digital goods or services from 30 percent to 15 percent for the first $1 million of revenue every developer earns each year. This according to the search giant’s data will help 99 percent of developers who sell goods and services on the Play Store see a reduction of “50 percent in fees.” The company added that the reason for choosing $1 million as a threshold is because it talked to its “partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit.”
With the reduction in the fees, the company believes that it will 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.
This change according to the company will not affect 97 percent of the apps available on the Play Store as they do not sell any digital goods or services, and are not required to pay any service fee.
All Indian developers who sell digital goods, but are yet to integrate the Google Play billing system in their apps, will continue to have until March 31, 2022, to do so.
To recall, Apple back in November 2020 announced that it was cutting its revenue-sharing fee to 15 percent for all developers making less than $1 million per year. Both Google and Apple have taken different routes to their revenue cutting strategies. Apple will take a 30 percent share from developers when they surpass the $1 million revenue mark, whereas, Google will only take 30 percent fees on revenue earned exceeding $1 million per year.
While this news will not satisfy the bigger developers earning a lot more than $1 million, it will be welcomed by indie developers who earn less than $1 million a year.