Google has cut the commissions it charges Android developers who offer digital products and services in-app on the Play Store. For the first $1 million in sales that each developer raises each year, Google Play will reduce the subscription charge it pays from 30% to 15% starting in July.
“As a result of this move, 99 percent of global developers who offer interactive products and services by Play will see a 50 percent decrease in fees. “These funds will help developers scale up at a crucial stage of their development by recruiting more programmers, growing marketing personnel, increasing server space, and more,” Google said in a blog post on Tuesday.
According to data from research company Sensor Tower, Google Play will generate $38.6 billion in sales in 2020.
“Thousands of Indian developers who are now using Play to market digital products will be able to benefit from this move as soon as it takes place in July,” Google said.
Scaling an app should not end until a partner has hit $1 million in sales, according to Google. These investments are more important as developers are in the early stages of development. “We’ve learned from our clients who make $2 million, $5 million, and even $10 million a year that their programs are only on the verge of being self-sustaining. This discount will automatically refresh each year after developers confirm some simple facts to help Google recognise any related profiles they might have and to ensure we allocate the 15% correctly.
Last year, Google outlined the conditions of Google Play’s Payments scheme, stating that the Google Play subscription fee is only available to developers who sell digital products and services in-app. About 97 percent of users in the world don’t sell digital products, meaning they don’t have to pay a subscription tax.
Although today’s news is unlikely to please larger players who have demanded lower Play Store fees, it will be celebrated by indie developers who aren’t willing to give up 30% of the money they earn each year.
Many companies argued that both companies’ app store fees are too high, causing Google’s earlier doubling down. These complaints have been around for years, but thanks to Epic Games’ behaviour in the last few months, they have hit an all-time peak. Epic Games’ activities have resulted in many legal and often regulatory threats to Apple and Google’s app stores’ domination.
Despite the fact that none of these cases have been fruitful in court or resulting in regulatory reforms, it appears that they have pushed Google and Apple to make certain changes before they are unable to.