Starting next year, Google plans to reduce the fee it receives from subscription-based apps on Google Play to 15% from 30%. The announcement comes after authorities and app developers chastised the company’s price system.
Google announced “significant changes” in a blog post on Thursday, including shifting away from a one-size-fits-all service fee model and toward “various programs meant to support and encourage our diverse app ecosystem.” The new structure will take effect on January 1st of the following year.
This latest concession comes after Google decreased its commission for app developers earning the first million dollars in revenue from sales on the Google Play store per year to 15% from 30%. These modifications were implemented in March, and they came after Apple made a similar step with its rival app store in November.
Ebooks and on-demand music streaming services will both get a 10% reduction in service fees. The biggest games, on the other hand, will be unaffected by the new policy because they rely on in-app purchases rather than subscriptions. Instead, gaming apps will be charged a 15% commission for the first $1 million in revenue before being charged a 30% commission.
This is great news! This reduction in subscription fees will help Duolingo accelerate our mission of providing universally available education. https://t.co/aK2XpL1X4s
— Luis von Ahn (@LuisvonAhn) October 21, 2021
“We will be able to better invest in our goods as a result of the pricing shift they’ve announced, and users will be able to connect with confidence online.” Founder and CEO of Bumble Inc. Whitney Wolfe Herd remarked
“This is fantastic news!” exclaimed Luis von Ahn, Duolingo’s Co-Founder and CEO. “Duolingo’s aim of offering universally accessible education will be accelerated by this drop in subscription fees.”
In-app purchases accounted for $11.6 billion of Google’s $38.8 billion in Google Play store spending in 2020, according to analytics firm Sensor Tower.