Google has announced it is lowering the commission it charges smaller app developers, outdoing a recent move by Apple in the process.
From July this year, Play Store developers will be charged 15% of the purchase price on the first $1m in revenue, which Google hopes will help developers scale up their operations and pump more funds into developing even better apps. Once the devs pass the million dollar mark, the fees will go back up to 30% on further earnings.
Google’s announcement comes on the heels of a similar move from Apple late last year, as it grappled with Epic Games in a PR war over Fortnite in-app purchases. However, there’s one critical difference between the policies on the Play Store on Apple’s App Store.
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While all Play Store developers will get the 50% fee reduction on first million they earn, Apple’s discounted rate only applies to devs bringing in under $1m in total.
Apple’s policy gives developers earning just below the $1m threshold little incentive to push just above it, because their fees will immediately double to 30% thereafter. Google’s policy looks like a fairer approach, even though some of those mega-devs probably don’t need the discount.
In a post on the Android Developers’ blog, Google says: “…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. 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. We look forward to sharing full details in the coming months.”
Analysis: Good news for Android users?
In essence, anything that puts more resources in the hands of developers, rather than the mightily swelled coffers at Google HQ is good news for Android users. For smaller devs, an extra 15% in their budget means more cash can be spent on hiring engineers or getting the word out about their apps and games.
It could speed-up development, it could mean even better experiences than initially planned. It can mean more money can be allocated to quality assurance, which could result in apps launching with fewer bugs. It could also mean faster updates bringing new and intriguing features. It could also allow developers to work on more apps and games simultaneously.
It could mean more independent developers can stay independent and resist acquisition offers from bigger fish. It could enable more people to actually make a living from their apps.
All in all, the 30% commission has always felt kind of stingy, so we’re happy to see Google reduce it to a much more reasonable 15%.