Google has taken an important step in helping developers earn more from their apps and services on the Play Store. The Android smartphone OS maker has announced that it is halving its commission from 30 percent to 15 percent.
Google has lowered its own commission from the Play Store’s virtual products and services. The search giant will levy only a 15 percent commission on developers who make less than a million dollars annually.
Google has taken a slightly different approach from Apple Inc. to help developers earn more from Play Store:
The Android Play Store will now ask for 15 commission on the first million dollars a developer makes on Google’s store per year. The change will come into effect starting on July 1, 2021.
After developers cross the $1 million in sales for a year, Google will charge developers its standard 30 percent fee for in-app purchases and downloads. While this approach may seem similar to Apple, there’s a slight difference in the implementation.
Apple Inc. had announced a similar initiative late last year. The iPhone maker’s program, however, only applies to developers who make under $1 million per year from Apple’s App Store. After developers cross the million-dollar mark, Apple will start charging them the standard 30 percent commission.
Google cuts Play Store commission fee to 15% for most developers https://t.co/aDT0yxteYJ
— Pocketnow (@Pocketnow) March 16, 2021
Apple’s benevolence doesn’t apply to iOS apps if a developer’s revenue on the Apple platform exceeds $1 million. Google’s reduction to 15 percent on the first $1 million applies to all developers, even those making millions of dollars.
Explaining the rationale behind the strategy, Sameer Samat, VP of Android and Google Play, wrote in a blog post: “We’ve heard from our partners making $2 million, $5 million and even $10 million a year that their services are still on a path to self-sustaining orbit.”
“This is why we are making this reduced fee on the first $1 million of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size. We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed.”
Almost all developers offering paid services to benefit from Google’s new commission policy, claims the Android OS maker:
With the new policy in place, almost the entire developer community offering premium or paid services on the Play Store will benefit, noted 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.”
“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 Google’s move appears benevolent, there are several factors that may have influenced the change. Developers, as well as regulators, have regularly complained about Google and Apple, having too much power and influence over the smartphone app market.
Google has halved the commission developers have to pay on in-app purchases of digital goods from its Play Store to 15% on the first $1 million they earn as revenue each year.https://t.co/QmqcbknCXj
— ETtech (@ETtech) March 16, 2021
Incidentally, the Google Play Store for Android has a lot of competition. In other words, the Play Store is only one of many app stores for Android devices.
Nonetheless, the underlying issue is Google’s insistence on using its own in-app payment services. EPIC Games highlighted this issue when the company sued Google, allegedly for monopolizing app payments.
There are several companies that refrain from selling services on the Play Store owing to Google’s insistence on using its own billing and payment systems. Apparently, companies want to retain the freedom of using third-party payments service for billing.