A move that brings relief to thousands of developers around the world, Google has decided that from July 1 it will take only 15 per cent – reduced from 30 per cent – to the first $ 1 million earned by apps in Google Play. While the submission doesn’t change much for large apps, it helps small apps and game developers in a big way.
“The reduction in commission fees is likely to benefit store firms, individual application developers as well as startups,” Manjunath Bhat, Director of Sr Analyst, Gartner, told Indianexpress.com. “There will be little impact on large companies developing applications in India.”
Sameer Samat, VP for Android and Google Play, wrote in a post that “99% of global developers selling digital goods and services through Play will see a 50% reduction in revenue.” Engineers with a total profit of more than $ 1 million each year will still have to pay 30 per cent to Google.
Google’s announcement follows a similar move by Apple last year when the Cupertino company said it would reduce its revenue from 30 per cent to 15 per cent from January, for developers making less than $ 1 million a year. However, Google’s approach is slightly different. In Apple’s case, the company’s App Store Business Business Program only works for those developers who earn less than $ 1 million in annual sales on all of their apps – and if they make more than $ 1 million, they are generally charged the average. Google, meanwhile, says the cut works for the first $ 1 million without the full amount. “We have heard from our partners who make $ 2 million, $ 5 million and even $ 10 million a year that their services are independent,” Samat said.
Both Apple and Google in recent months have been targeted by major firms such as Epic Games and Spotify, as well as minor developers, who suspect that the current business models used by the two tech giants are hurting the tech market. In fact, Apple’s official fight with Fortnite developer Epic Games put the company under further scrutiny from regulators. Because both Apple and Google control the most popular App Stores as well as the entire smartphone market and ecosystem, many developers say they have no choice but to follow the rules set by the two companies and pay a fee.
“In a country like India, it makes a huge difference,” said Rajan Navani, Deputy Chairman and Executive Director, JetSynthesys. “I think it helps to support the Indian environment, especially for small developers.”
Navani, the company that creates the popular Android mobile games, says the reduction in Google Play Store fees will have a huge impact because the monetization of the app on Google’s platform is huge. “If we look at Google’s platform numbers, they are somewhere in the 30 to 40 per cent growth in app purchases in India,” he said. “It’s a good move, because, with the advent of new developers, more companies will be contacting citizens with digital payments,” he said.
This step is also very important because Android dominates the smartphone market in India. The change, although not directly in India, comes just months after Google faced criticism from high-profile sites including Paytm over a 30 per cent commission for in-app purchases.
Vijay Shekhar Sharma, founder of Paytm, has called Google a “judge, judge and judge” after a Mountain View bully temporarily unleashed a popular payment app from an Android app store for violating a policy. Following the crackdown, Google was due to delay its Play Store cuts by 30 per cent in India by April 2022.
“The reduction of the commission is a step forward in growing this market,” Bhat said. “There is a lot left in the platform of the platform-making journey, gaining democracy to reach the platform and making money through platform services in India.”