Google is reducing the commission Android developers have to pay on the revenue they generate from apps on the Play Store. In a blog post earlier this week, the internet giant said that it will charge a commission of 15-percent on the first $1 million in revenue every year. This change will be effective from July 1, 2021.
Developers currently have to pay a 30-percent cut on every dollar they generate through sales on the Play Store. In fact, Google will continue to charge a 30-percent cut on the revenue generated beyond the first $1 million in a year.
The company says “investments are most critical when developers are in the earlier stages of growth”. Nearly 99-percent of developers globally that sell digital goods and services with Google Play apparently make less than $1 million in revenue in a year. So this change will mean a 50-percent reduction in fees for them.
However, “scaling an app doesn’t stop once a partner has reached $1 million in revenue”. Google says developers who make $2 million, $5 million, and even $10 million a year are “still on a path to self-sustaining orbit”. Thus it is making this new fee structure available to every developer, regardless of size. “We believe this is a fair approach,” said Sameer Samat, a vice president of Product Management at Google, in the blog post announcing this change.
Google reduces the commission on app sales and in-app purchases on the Play Store
The Google Play Store lets Android developers host both paid and free apps. Developers can make money either through outright sales of their paid apps on the platform or sales of digital goods and services through in-app purchases, or both. Google is now reducing the commission on these sales, although the reduced fee of 15-percent is only applicable on the first $1 million of total revenue earned each year.
Google’s move comes after a similar change Apple announced for its App Store in November last year. However, the latter takes a slightly different approach. Apple will collect a 15-percent commission only from “small” developers who generate less than $1 million in revenue in a year. Developers who make more than $1 million in a year will have to pay a 30 percent commission on every dollar they’ve earned.
Moreover, developers who earned less than $1 million in the previous year first need to apply to a program to have this rate reduced to 15-percent. So Google’s approach is less cumbersome, though we will have to wait until the company shares full details on the new fee structure in the coming months.
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