Google Lowers Cut It Takes From App Developers on First $1M

Good news for Android app developers. Google announced on Tuesday that it is reducing its cut from Play Store proceeds down to 15%, a number in line with Apple’s cut of App Store proceeds.

What this means is that on July 1, 2021, Google will take 15% versus 30% from Play Store creator revenue under $1 million.

“With this change, 99% of developers globally that sell digital goods and services with Play will see a 50% reduction in fees,” wrote Google. “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.”

Google will take a 30% cut on any money made after the $1 million cut off. The move directly follows Apple’s decision to do the same thing, which it announced last November. At the time, Apple wrote:

Apps have taken on new importance as businesses adapt to a virtual world during the pandemic, and many small businesses have launched or dramatically grown their digital presence in order to continue to reach their customers and communities. The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem.

Not everyone is happy with the decision. Epic Games founder Tim Sweeney sees the move as monopolistic, tweeting:

“It’s a self-serving gambit: the far majority of developers will get this new 15% rate and thus be less inclined to fight, but the far majority of revenue is in apps with the 30% rate. So Google and Apple can continue to inflate prices and fleece consumers with their app taxes,” he added.

Further, many states are examining Google and Apple’s app store practices, suggesting that there must be alternative methods for buying and selling apps on their platforms.

App store costs and controls are a major issue for both Apple and Google. Free-to-play games like Fortnite are hits and definitive parts of the console and mobile gaming world, and creators like Sweeney find both Apple and Google’s “taxes” abhorrent. As gaming expands onto new platforms and paid downloadable content becomes an important revenue source, the 30% take on sales over $1 million is still onerous.