Google announced that it will reduce the long-standing 30% cut it takes from Android app developers for each Play Store purchase. The tech giant said that developers will have to pay just a 15% cut on the first $1 million they make on the Play Store, starting from July 1, 2021. According to Google, it means Android app development service providers that sell digital goods or services will see a 50% reduction in fees.
Google’s decision comes after Apple announced that it will cut down developers’ fees as part of a small business program. Apple’s fee reduction applies only to iOS developers who earn under $1 million annually from the App Store. However, if the developer crosses the threshold, they will have to pay the standard 30% fees.
Google’s New Play Store Fees Program
Unlike Apple, Google’s Play Store fees program is more straightforward. It’s a flat reduction to the first $1 million an Android app development company or developer makes in revenues. That means whether you’re a freelance developer or a multi-billion-dollar company, the first $1 million is eligible for the 50% fee reduction.
Google believes the policy of equally applying the fees cut to all kinds of developers is a fair approach. Whether a business owner decides to hire Android app developers from a small startup, or a large corporation, they can benefit from this fee reduction. Any revenue you generate after the $1 million thresholds will be charged the usual 30% Play Store fees.
Google Play Store Cut’s Legacy
Google has charged a 30% cut for all purchases made through the Play Store since the app marketplace’s launch as “Android Market.” Google, however, initially claimed that the 30 percent goes to carriers and billing settlement fees. With the marketplace’s incarnation as the Play Store, the tech giant describes the cut as a charge towards “distribution partner and operating fees.”
Over the past decades, the 30 percent fee has remained constant. Google made just one exception in 2018 when it announced that it would reduce its Play Store cut to 15 percent for subscriptions if users subscribe for a full year.
Benefiting Most Android Developers
One of the brighter aspects of Google’s new policy is that it will most Android developers. The number of developers that make more than the threshold $1 million is comparatively very small. That means just a tiny fraction of developers will still pay the usual 30 percent cut.
According to Google, only roughly 3% of Android developers charge for either downloading their app or for in-app purchases through the Play Store. Besides, merely 1% of those developers make more than the $1 million thresholds that would see 30% fees.
Dealing with Growing Scrutiny
Google’s new policy comes amid growing public scrutiny of the Play Store and App Store. It was prompted by the removal of Epic Games’ Fortnite game by both the Play Store and App Store. The move followed an antitrust lawsuit by Epic Games against both Google and Apple.
Epic Games said that Google’s new movie doesn’t address the root cause of the issue. The game development company argued that Android needs to be fully open to competition. It said Google should create a level-playing field among app platforms, developers, and service providers.
The 30 percent cut in Play Store fees will certainly make Android developers more enthusiastic about the platform. With a steady demand for apps fueled by the pandemic, developers are likely to benefit significantly from this policy. Play Store fee reduction or not, we, at Android Developer, are committed to build and launch impeccable apps for all our clients.
Powered by a team of exceptionally passionate Android developers, we’re poised to make top-notch apps for all kinds of requirements. You could hire Android app developers from us to rapidly catch up with the ever-changing market dynamics. Follow our blogs and social media posts so that you never miss any crucial information about the world of mobile apps.
Frequently Asked Questions
Q. What is a mobile app subscription model?
Auto-renewable mobile app subscriptions can offer in-app purchases that provide users with a wide range of services. As with subscription-based services, app developers focus on retaining users by providing app updates and features that continually improve the app experience.
Q. What does it mean to subscribe to an app?
When you subscribe to app-based services, you pay a monthly fee for access to your app. In exchange, subscription apps must work to retain their customers by continuing to offer new and incentivizing features. The popularity of subscription-based app services is growing steadily.
Q. How much does it cost to build an Android app?
The development cost for an Android mobile app depends on what kind of app you need. Costs are lower for an app with a basic design and simpler features. If you need a high-performance app with more advanced features, the cost will be comparatively higher. Android Developer offers competitive pricing for every kind of app.