Google Play Store Reducing Its Cut Of App Revenue For The First Million Made Each Year

Google will reduce the cut it takes from revenue made on its Play Store later this year, halving its share on the first $1 million made by developers.

Google will follow Apple’s lead later this year by reducing the cut it takes from app developers using its Play Store. Google currently takes 30% of all digital sales made through apps bought via its Play Store on Android. However, starting from July 1, 2021, that rate will be reduced to 15% on the first $1 million made by a developer.

Even though the move appears to have been inspired by a similar one made by Apple late last year, Google’s approach is a little different. While Apple has reduced its regular 30% rate to 15% for any developer generating less than $1 million per year, Google’s cut applies to the first $1 million made by all developers. Google will take a reduced cut of the first $1 million they make per year, regardless of their total earnings.

A Google spokesperson believes that applying the cut to everyone will help it to achieve the goal of aiding all developers using its storefront, regardless of size. Unsurprisingly, Epic’s higher-ups do not agree. The Fortnite developer claims the move does not address the root of the issue. “In a free app market, rates would be much lower for all due to competition, and not subject to their divide-and-conquer tactics,” tweeted Epic CEO Tim Sweeney.

Epic is currently embroiled in a number of lawsuits with both Apple and Google which hinge on the former’s disagreement with the latters’ app store fees. Epic took action against this by attempting to bypass the iOS and Android stores and asked players to buy digital products and currency directly from its own store. Google and Apple reacted by permanently removing Fortnite from its platforms.

Sweeney also argues that the majority of the Google Play Store’s revenue is generated by apps that earn more than $1 million per year. According to Google, only 3% of Android developers charge for their apps or utilize digital purchases. What’s more, only 1% of that already small margin will surpass the $1 million threshold.

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