Google Slash Retail Fees Games Miss Out
Google is set to slash app store fees for all subscriptions, the discounts will not apply to the biggest games sold in the store, which make up the majority of sales, inside both the Google and Apple retail locations netting the search Company billions in fees.
It will apply to streaming services like Spotify, analysts claim Google’s move will increase the pressure on Apple, at a time when the iPhone maker has come under fire from Spotify and Epic Games over the size of its commission and its App Store rules.
Earlier this year, Epic, the maker of hit game Fortnite, sued Apple for running a monopoly with its App Store, but lost on nine out of ten counts.
Google said on Thursday that the new pricing structure for its Android Play Store will be global and take effect on January 1, 2022.
The company claimed that they want to help developers “build sustainable businesses” and to ensure that “Play continues to lead in the mobile app ecosystem.”
Google had already announced in March that it would cut fees on in-app purchases from 30 per cent to 15 per cent for the first $1m of sales that app developers made, a move that mimicked Apple, which did the same last November.
According to Sensor Tower, worldwide spending on Google Play in 2020 was $38.8bn, earning Google $11.6bn in fees. The majority of these fees – $9.6bn – was from mobile games.
Whitney Wolfe Herd, founder and chief executive of Bumble, a dating app, told the Financial Times the move “will allow us to better invest in our products and further empower users to confidently connect online,”.
Google also announced that eBooks and on-demand music streaming services — categories “where content costs account for the majority of sales,” — will now be eligible for a service fee as low as 10 per cent
“The new rates recognise industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent,” Google said.