Google slashes Play Store services fees by 50% on first $1 million revenue

Anne Freer | March 18, 2021

App Business

In an effort to help app developers create a more sustainable business, Google said it will be slashing its commission on the Play Store for in-app digital products.

The move follows a similar announcement by rival Apple.

As of July 1st, 2021, Google will be reducing its service fee from 30% to 15% for the first $1 million in revenues.

A 30% cut applies to each dollar earned above the first $1 million.

The changes are a boon to smaller developers who don’t earn as much in revenue as larger app makers.

It will apply to some 99% of developers selling services through their app on the Play Store.

In a blog post, the company said:

“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 also added that scaling an app didn’t stop at the $1 million mark.

“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.”

The changes follow a backlash in India where many tech and app start-ups said they were struggling with the 30% fees.

However, the move has been dismissed by some as not being good enough.

“While a reduction in the Google app tax may alleviate a small part of the financial burden developers have been shouldering, this does not address the root of the issue,” a representative of Epic Games wrote in a statement.

“Whether it’s 15% or 30%, for apps obtained through the Google Play Store, developers are forced to use Google’s in-app payment services. Android needs to be fully open to competition, with a genuinely level playing field among platform companies, app creators and service providers. Competition in payment processing and app distribution is the only path to a fair app marketplace.”

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