Google will lower the cost of its commission for smaller developers on its storefront.
In an update on its Android blog, Google VP of product management Sameer Samat explained that the company would drop its revenue share to 15 per cent for the first $1 million each developer earns every year.
However, after the initial $1 million has been earned, the company will return to taking its standard 30 per cent commission.
The change will come into effect on July 1st. Moreover, it is believed that 99 per cent of Google Play developers will see a 50 per cent reduction in fees.
“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,” wrote Samat.
“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. We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed.
According to data provided by Sensor Tower, had the 15 per cent fee been in effect last year, it would have cost Google around $587 million. Or rather, five per cent of revenue that the company generated through Google Play fees in 2020.
Time to change
Of course, Google is not the first company to make this commission change, as Apple made a similar decision in November 2020.
Had Apple brought its new fee into effect last year, bearing in mind that the 15 per cent fee is for devs that earn up to $1m, then the company would have lost $595 million in 2020, as detailed by Sensor Tower’s estimates.
However, it is worth noting that both companies have been scrutinised for their 30 per cent commission shares on the mobile storefronts. In fact, it is one of the focal points for Epic Games as it continues its legal battle with Apple and Google.
In August 2020, Epic attempted to circumvent the commission cost on Google Play and the App Store by introducing a new payment option to Fortnite. A move that resulted in the battle royale being booted from both storefronts.
Furthermore, it is not just the games giant that believes the tech giants to be demonstrating monopolistic and anti-competitive behaviour, as both were investigated last year by the US antitrust committee.
Apple is also at the centre of another investigation, this time with the UK’s Competition and Markets Authority due to its anti-competitive behaviour.
