Google will reduce its service fee for the Play Store, which charges app developers, to 15 percent for the first million (USD) of revenue. The 15 percent charge applies to all app developers offering in-app products, subscriptions, or assets and will be applied annually. For example, a gaming app, offering items for in-app purchase, will have to pay 15 percent of revenue to Google for the first $ 1 million of revenue it makes. For developers who earn more than this amount, the service fee will be 30 percent.
Google’s announcement comes after it faced considerable criticism in the Indian market, when it announced plans to charge developers a 30 percent fee from the Play Store for any type of digital product sold within the app. He also wanted the developers to implement the Play Store billing system. to facilitate these transactions in the application.
When the decision was announced last year, Google faced criticism and ire from startups and app developers in the country. Paytm’s Vijay Shekhar Sharma had called it a ‘tax’ and cited the need for developers in India to have their own app store.
Then Google had decided to delay the decision to charge a 30 percent fee until March 2022 from the previous deadline of September 30, 2021. In a new blog post, Sameer Samat, vice president of Android and Google Play, wrote : “We are announcing a significant change for those developers who sell in-app digital goods and services on Play (for example, gems in a game). Starting July 1, 2021, we will reduce the service fee that Google Play receives at 15% for the first $ 1 million (USD) of revenue each developer
wins every year. “
The post adds that the change will affect 99% percent of developers globally who sell digital products and services with Play, as they will see a 50 percent reduction in rates.
“While these investments are most critical when developers are in the early stages of growth, scaling an application doesn’t stop once a partner has reached $ 1 million in revenue; We’ve heard from our partners making $ 2 million, $ 5 million, and even $ 10 million a year that their services are still on the path to a self-sustaining orbit. That is why we are making this reduced rate on the first $ 1 million of total revenue earned each year available to all Play developers who use the Play billing system, regardless of size, ”the publication adds.
Samat adds in his post that the company sees this as a “fair approach that aligns with Google’s broader mission of helping all developers succeed.” Also, once the developers can confirm the basic information, this discount will be automatically renewed every year. The company will share more details on this in the coming months.
The publication adds that the service fee for Google Play only applies to developers who offer the sale of digital goods and services within the application, and notes that more than 97% of applications globally do not sell digital goods and, therefore, they do not pay any service fees. .
For Indian developers, who sell digital products, but have not yet integrated with Play’s billing system, the previous deadline of March 31, 2022 will continue.
Google follows Apple with this trend. In November 2020, Apple had cut the App Store fee to 15 percent from 30 percent for developers who generate up to $ 1 million in annual revenue from their apps and those who are new to the store. Apple has also faced similar criticism from app developers for the high commission it charges app developers for in-app subscriptions and products.