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Google announced that it is reducing its Play Store cut for subscriptions from 30 percent to 15 percent for all apps and games.
The current cut in services is taking Google from 30 percent to 15 percent after consumers keep their subscriptions for 12 months.
Below, Google has stated that “99 percent” of developers are entitled to a subscription service fee of 15 percent or less to support the “specific needs of developers who offer subscriptions”.
In addition, service fees of “up to 10 percent” are charged for eBook and on-demand music streaming apps under the Play Media Experience program.
Corresponding Sensor tower, Annual global consumer spending on Google Play reached $ 38.8 billion in 2020, including $ 32 billion on mobile games. Google’s 30 percent fee for all in-app purchases totaled $ 11 billion, of which $ 9.6 billion was for mobile games.
With consumer spending on Google Play already reaching $ 35.5 billion ($ 27.8 billion for mobile games) in the first three quarters of 2021, it is well on its way to top 2020.
If consumer spending continues to rise at its current level in 2022, Google will receive a significantly lower commission on its new 15 percent subscription model.
New year, new me
“Digital subscriptions have become one of the fastest growing models for developers, but we know subscription companies face unique challenges when it comes to customer acquisition and retention,” said Sameer Samat, vice president of product management at Google blog entry.
“We have worked with our partners in the dating, fitness, education, and other sectors to understand the nuances of their business. Our current service fee drops from 30 percent to 15 percent after 12 months of a recurring subscription. But we’ve heard that customer churn is making it difficult for subscription companies to take advantage of this reduced price. So we’re simplifying things to make sure that is possible. “
The move is the latest in the tech giant’s response to mounting tensions between developers over 30 percent cut app marketplaces like Google Play and Apple’s App Store.
Earlier this year, Google announced that it would cut its Play Store commission from 30 percent to 15 percent for the first $ 1 million developers that went into effect July 1.
Despite the commission change, Google faced a lawsuit by 37 states in July over alleged Play Store monopoly, arguing that by restricting competition, consumers were directly suffering from higher prices and limited choice.
With tensions still lingering and app marketplace competitor Apple still under fire after the protracted legal battle between Apple and Epic Games, further changes to the app marketplace guidelines are expected to follow.
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