Google Play Store Commission Is Slashed by 50%: Benevolent or Strictly Business?

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Developers, throw your hands up and rejoice! Beginning July, Google is cutting its Play Store commission in half!

In a major announcement coming forth a blog post, Google has announced some welcome changes to its revenue-sharing structure of Google Play apps.

Effective July 1, Google will now be holding on to a 15% cut of the first $1 million in annual Google Play revenue from Google Play earned by a developer. Essentially, as claimed by Google, the new directive would mean 99% of developers with apps and content on Google Play will experience reductions in the commission paid to Google of up to 50%. This is down from the 30% charge that was applicable earlier on the same terms.

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The 30% levy will keep standing for all revenue going over $1 million each year, however.

The decision from the tech giant could prove to be a sizeable reinforcement for indie developers and/or small companies who primarily rely on the Android platform’s app store for revenue.

But is the decision really an altruistic reflection by one of the biggest companies in the world? Or is there more than what meets the eye?

Quite simply, two factors immediately erase any thoughts of mercifulness. Having an ever-bearing rival in Apple’s App Store would be the first. Both the tech adversaries being embroiled in separate antitrust lawsuits and investigations over their control on their respective app marketplaces would be the second.

The latest announcement from Google’s corner curiously comes along the heel of a similar move made by Apple late last year.

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In November last year, Apple had also waived its revenue-sharing fee to 15% for developers making less than $1 million in yearly revenue. Taking a closer look at the change in the revenue sharing structure, Google has seemingly gone a step ahead in undercutting its rival’s numbers.

But Google has an edge over Apple’s offerings. Apple takes a 30% cut if a developer’s annual revenue ever surpasses $1M in a year. Google’s Play Store fees, on the other hand, only reaches 30% for any earned revenue that exceeds $1M.

Theoretically then, Google’s charges lay at 15% on the first million even if the developer makes $5 million. Apple’s policies at the moment allow it to charge the dreaded 30% on all of that developer’s earnings, once it skids past the $1 million mark.

This makes Google’s Play Store fees arguably all the more generous.

 To the same end, Sameer Samat, Product Management VP – Google, has claimed that developers who are accruing revenue some way above $ 1 million will feel a noticeable change towards making their businesses more sustainable.

Maybe this is Google’s way of making amends in favour of looking at the benefits for themselves in the longer picture. The app store tax has been a cause for furore, forcing Google to double down and defer on its 30% app store fee in late September. Notable voices of Vijay Shekhar Sharma led Paytm in India and complaints from the ever-popular Fortnite’s makers in Epic Games have led to legislative challenges for both Apple and Google’s respective app stores.

However you cut it, for the time being, Google has bought itself some favourable sentiment in some cloudy situations encircling it. Developers, go on and make the most of it.

Stay tuned here for more updates.

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