Google will reduce Play Store commissions to 15% for developers who earn their first $1 million per year

It took long enough, but Google has finally decided to follow along with Apple’s own commissions associated with its digital storefront.

Google today confirmed (via TechCrunch) that it is going to reduce Play Store commissions for developers submitting apps to the storefront. There are some specifics, of course, just like Apple’s move last year. Namely, Google’s new Play Store commissions will drop to 15 percent for developers who earn their first $1 million per year. The other catch here is that this change is for developers who utilize Google’s own Play Store billing system.

According to Google, the benefits will be huge. The company says that 99% of developers that do use the Play Store billing system will see a 50% reduction in fees associated with the digital storefront.

Apple announced something similar in November of 2020. The company’s effort is mostly for small business developers. Here are the bullet points from that initial announcement last year, which differentiates from Google’s effort in key ways.

  • Existing developers who made up to $1 million in 2020 for all of their apps, and developers new to the store, can qualify for the program and the reduced commission.
  • If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.
  • If a developer’s business falls below the $1 million threshold in a future calendar year, they can re-qualify for the 15 percent commission the year after.

That program officially launched in January of this year. And Google says that this new Play Store commissions plan will go into effect on July 1, 2021. This is a reduction from 30% down to 15% for eligible developers using Google’s Play Store billing system.

From the report today, regarding Google’s decision here:

We’ve heard from our partners making $2 million, $5 million and even $10 million a year that their services are still on a path to self-sustaining orbit.

‘This is why we are making this reduced fee on the first $1 million of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size. We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed.

This is going to be a welcomed change, for sure.