Google has revealed that it is lowering its Play Store cut for subscriptions from 30 per cent to 15 per cent for all apps and games.
The current service cut Google takes decreases from 30 per cent to 15 per cent after consumers maintain their subscriptions for 12 months.
Hereafter, Google has stated that "99 per cent" of developers will qualify for a subscription service fee of 15 per cent or less, to help support the "specific needs of developers offering subscriptions".
Additionally, as part of its Play Media Experience programme, eBook and on-demand music streaming apps will be eligible for service fees "as low as 10 per cent".
According to Sensor Tower, annual worldwide consumer spending on Google Play reached $38.8 billion in 2020, of which $32 billion was from spending on mobile games. Google's 30 per cent fee from all in-app purchases totalled $11 billion, with $9.6 billion of this from mobile games.
With consumer spending in Google Play already reaching $35.5 billion ($27.8 billion on mobile games) for the first three quarters of 2021, it is on track to surpass 2020.
If consumer spending continues to inflate at its current rate throughout 2022, this will see Google receive a significantly diminished commission at its new 15 per cent subscription model.
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"Digital subscriptions have become one of the fastest-growing models for developers but we know that subscription businesses face specific challenges in customer acquisition and retention," said Google vice president of product management Sameer Samat in a blog post.
"We’ve worked with our partners in dating, fitness, education and other sectors to understand the nuances of their businesses. Our current service fee drops from 30 per cent to 15 per cent after 12 months of a recurring subscription. But we’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can."
The move is the most recent in the tech giant’s response to rising developer tensions over the 30 per cent cut app marketplaces such as Google Play and Apple’s App Store take.
Earlier this year, Google announced that it would lower its Play Store commission from 30 per cent to 15 per cent for the first $1 million developers make, which came into effect from July 1st.
Subsequently, despite the change in commission, in July Google faced a lawsuit from 37 US states over an alleged Play Store monopoly, arguing that by restricting competition consumers directly suffered from higher prices and limited choice.
With tensions still ongoing, and app marketplace competitor Apple still under fire following the lengthy Apple versus Epic Games legal dispute, it is to be expected that more changes to app marketplace policies will ensue.
