Google has announced that it will reduce its Google Play service fee to 15% for the first $1 million (£720,000) of revenue every developer earns each year.
This change will come into effect on July 1 and the company claims that 99% of developers globally that sell digital goods and services through the Play Store will see a 50% reduction in fees.
“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,” Sameer Samat, VP of product management, wrote in a statement.
This is widely seen as a response to Apple’s new policy of reducing its App Store commission to 15% for small businesses earning up to $1 million in revenue per year. This came into effect at the start of 2021 and was a considerable reduction from Apple’s long-standing 30% fee on all paid app revenue and in-app purchases regardless of proceeds.
The clear difference between the two policies is that Apple offers a 15% rate if a developer’s net sales are below $1m but if they go over this, earnings will be charged a different rate. However, Google is making this policy accessible to all developers as it will only apply to the first $1m of revenue.
The move also comes as Google faces a legal challenge from Epic in the UK over its “anti-competitive” Play Store practices. Google and Apple took a 30% cut of all payments made in-game, and Epic, in a bid to avoid losing that revenue, said it would offer a 20% discount to players who purchased in-game currency directly from Fortnite rather than through the app.
Apple and Google removed the game from their official stores which prompted Epic to file lawsuits against both companies. In February, a UK antitrust court blocked Epic’s case against Apple but ruled that the one against Google could still go ahead.
