- The reduction in Play Store fees applies to small developers starting July 1, 2021.
- The reduced 15 per cent fee is only applicable for developers earning less than $1 million.
- Once the developers cross the $1 million yearly earning, Google will charge its standard 30% fees for in-app purchases on the amount above $1 million.
Google on Tuesday announced that it would cut Play Store fees to 15 per cent for the first $1 million per year earned by developers. The cut applies to developers across countries, including India. Google's latest move to cut Play Store fees follows Apple's announcement last year where the Cupertino-based giant said it would cut App Store commissions by half to 15% for developers that make less than $1 million in annual net sales.
Sameer Samat, Vice President, Android and Google Play, in a blog post announcing the cut, said, "Starting on July 1, 2021, we are reducing the service fee Google Play receives to 15% for the first $1M (USD) of revenue every developer earns each year. With this change, 99% of developers globally that sell digital goods and services with Play will see a 50% reduction in fees."
It's worth mentioning that the Play Store fee reduction only applies to developers that earn less than $1 million. Once the developers cross the $1 million in sales within a year, Google would charge the standard 30 per cent fees for in-app purchases and downloads on the amount exceeding $1 million. For example, if a developer earned $1.5 million in a year then Google's standard 30% fees will be applicable on 0.5 million and not the entire amount, Google confirmed to India Today Tech.
Notably, the reduction in Google Play Store fee applies to developers that sell in-app digital goods and services on the platform. Google believes that the decrease in Play Store fees will help small developers in expanding. The company further clarifies that the reduced fee on the first $1 million of total revenue earned each year is available to every Play developer who uses the Play billing system, regardless of size.
Explaining how the reduced fee will work, the company, in a blog post on Tuesday, said that once developers have confirmed some basic info to help it ensure that the 15 per cent cut is applied correctly. Google has confirmed that the discount would automatically renew each year. The company will be sharing more details in the coming months.
Additionally, Google adds that developers in India that haven't integrated with Play Store's billing system but do sell digital goods can continue until next March. "For the thousands of developers in India that are already using Play to sell digital goods, they can start receiving the benefit of this change as soon as it goes into effect in July," Samat added.
It's worth mentioning that Apple lowered the App Store commission down to 15 per cent back in November 2020. The new reduced App Store commission was applied by December last year. Similar to Google, the Apple Store reduced commission applied to all regions, including India.