97 percent of apps globally do not sell digital goods, a top Google Play official said | (Representative image)
Google Play on March 16 announced the reduction in service fee to 15 percent for developers selling in-app digital goods and services. The new rate would be applicable from July 1, 2021.
The discount would be applicable only for earnings up to $1 million. For earnings beyond the said amount, the existing commission rate of 30 percent would be levied, the company stated in a press release.
"With this change, 99 percent of developers globally that sell digital goods and services with Play will see a 50 percent reduction in fees," said Sameer Samat, Vice President, Android and Google Play.
The amount saved during the initial phase of app development - when the earnings are below $1 million - would be crucial for developers to scale up their expenditure on hiring engineers, marketing their product and increasing server capacity, he added.
"While these investments are most critical when developers are in the earlier stages of growth, scaling an app doesn’t stop once a partner has reached $1M in revenue -- we’ve heard from our partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit," he said.
"This is why we are making this reduced fee on the first $1M of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size," the top Google executive further added.
Samat also claimed that more than 97 percent of apps globally do not sell digital goods, "and therefore do not pay any service fee".
"For the thousands of developers in India that are already using Play to sell digital goods, they can start receiving the benefit of this change as soon as it goes into effect in July," he noted.
The move by Google to reduce the service fee rate comes months after rival Apple adopted a similar measure. The Tim Cook-headed company reduced the commission rate on App store to 15 percent for earnings up to $1 million. The new rule came into effect from January 1, 2021, and took into consideration the earnings made by developers in the previous calendar year.