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Google undercuts Apple with new 15% revenue share for Play apps

The logo for Google's app and content marketplace, Google Play.
Enlarge / The logo for Google’s app and content material marketplace, Google Play.

Today, Google announced a main modify to the revenue-sharing structure of Google Play apps—one that could substantially alter the fortunes of independent developers or little organizations who rely on the Android platform’s app retailer for revenue.

Starting on July 1, Google will take a 15 % reduce of the 1st $1 million in annual Google Play revenue from Google Play that a developer earns. That’s down from 30 % previously. The 30 % figure will nonetheless apply to all revenue more than $1 million every year.

Google claims that 99 % of developers with apps and content material on Google Play will encounter reductions in charges paid to Google of up to 50 %.

On the surface, this appears like a incredibly equivalent deal to what Apple announced late last year when it declared that developers generating beneath $1 million will quickly commence paying just 15 % to the platform rather than the historical 30 %. But it really is truly unique in a way that could be consequential for a lot of developers it really is arguably a tiny much more generous.

That’s simply because Apple applies its reduced 15 % price to a developer till that developer exceeds $1 million in revenue in a provided year, at which point the larger 30 % quantity is applied to all of that developer’s earnings. Google nonetheless charges 15 % on that 1st million even if the developer tends to make $5 million. So in Google’s model, a developer who earns $1.two million on an app pays 15 % on $1 million, then 30 % on $200,000. In Apple’s, a developer generating $800,000 forks more than 15 % on that quantity, but if they make $1.two million, they spend 30 % on all $1.two million, not just $200,000.

To that finish, the author of Google’s developer weblog post (Product Management VP Sameer Samat) claims that developers who are pulling in $2 million, $5 million, and “even $10 million” every year have mentioned to Google that this modify will make a distinction in generating their corporations much more sustainable, even although they make substantially much more than $1 million. After all, an added 15 % of $1 million is $150,000, which is not a little quantity of income to any but the biggest and most prosperous organizations.

This modify is most likely not born totally of altruism, even so. First of all, Google is virtually straight matching—slightly beating, actually—Apple’s provide to developers as the App Store and Google Play compete straight. Also, each Apple and Google have been topic to antitrust lawsuits and investigations more than their grips on their respective app marketplaces. Like Apple with the App Store, Google demands app developers to use its personal payment program for apps on Play, generating it hard to circumvent these charges.

While the charges themselves are commonly not the principal topic of the investigations and suits, this modify improves optics and sentiment for the two tech giants whilst they are beleaguered, and it does so with no costing them significantly income. The important majority of the revenue Apple and Google acquire from their app marketplaces comes from apps with revenues far beyond $1 million annually.

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