Google halves Android app fee to 15% for lower-earning devs... who aren't responsible for majority of revenue anyway

Come July 1, 2021, Google will reduce the service fee it charges Android developers from 30 per cent to 15 per cent, though only on the first $1m in Google Play revenue. Sameer Samat, VP of product management at Google, described the policy change as an effort to help software developers build sustainable businesses. "We …

[mevets]

Its funny, if you don't care.

Apple started the 30% thing, and whinging aside, it was a smaller cut than the alternatives. That doesn't make it great that the new pimp in town takes a smaller cut than the establishment. Independently selling software takes some effort - you need to set up services for delivery, validation, payment and communication. For a software outfit, this overhead is easily more than 30%. This model is actually a bargain for the lower volume publisher.

For the higher volume publisher, they need to shadow some of these services regardless of the App store. For example android, amazon and even blackberry variants. Ok, joking about the latter. The value of the App store is less to them because of this.

So, naturally, the low-volume publisher, which relies on more services of the app store, should be given a discount, whereas the high-volume publisher who only patronizes the app-store because of (mono/duo/trio)-poly laws being largely useless gets to pay full whack for a useless service.

Nice work you don't be evil dudes.

[Anonymous Coward]

"it was a smaller cut than the alternatives"

Only inside Apple reality distortions field...

"you need to set up services for delivery, validation, payment and communication."

Fine. Let me decide if to setup it myself or use your services. That's called "freedom" and "competition".

As if people didn't sell software before the iPhone...

[Naselus]

Re: "it was a smaller cut than the alternatives"

When they initially set up the storefronts, Apple, Google etc painted themselves as competing with bricks-and-mortar retailers, who were taking a 60-70% cut for software distribution. 30% looks great compared to that.

Of course, the service they're actually delivering is a lot closer to a payment processing service like Visa or Mastercard, who take about 3%... which makes that 30% look much worse. And then they refuse to allow you to distribute via any alternative.

I honestly don't see how anyone can realistically claim this isn't an open and shut case of leveraging a monopoly, tbh. Particularly given Apple's tendency to introduce inferior products and then using the app tax to undercut their competitors (Apple music v spotify being the poster child for that one, but there's dozens of examples).

[Dinanziame]

Re: "it was a smaller cut than the alternatives"

I honestly don't see how anyone can realistically claim this isn't an open and shut case of leveraging a monopoly, tbh.

Easy: "People don't have to buy our phones, so we don't have a monopoly." Also, for Android: "Users can install apps from other app stores, so we don't have a monopoly."

Jokes aside, are there apps that are cheaper on third-party app stores than on the Google play store? That would be the most logical way to break Google's hand.

[Robert Grant]

Re: "it was a smaller cut than the alternatives"

It's not just payment processing. It's hosting, and virus scanning, and code reviewing, and IDE/language creating and app store app creating and updating hosting and installing as well.

[Smirnov]

Re: "it was a smaller cut than the alternatives"

"Fine. Let me decide if to setup it myself or use your services. That's called "freedom" and "competition"."

Of course, let's entrust our payment data to random app developers of which many have demonstrated complete and utter lack of grasp of even basic security measures and who can't even secure their own backends properly. What could possibly go wrong?

And we already have a platform where everyone is free to offer their own app store and payment systems (Android), but the reality is that it's a massive malware pit and the majority of users simply don't trust anyone else than the platform provider (Google).

The fact remains that Apple's iOS app store is the by far most profitable (for developers) mobile app platform that ever existed, which despite its much smaller number of users earns developers more profits than any other platform that ever existed.

And here we are and developers argue that the platform which makes them the most money should be turned into something like all the other platforms that don't or have failed to survive.

Pathetic.

[Anonymous Coward]

Re: "it was a smaller cut than the alternatives"

@Smirnov

Everything you're implying is very conditional and also supports a monopolistic view in general. Have ever thought of cutting Apple an extra 30% for supporting your view?

"...is the by far most profitable (for developers) mobile app platform that ever existed"

The rings of Saturn are now shaking.... THE POWER OF THE iOS APP STORE!!!!

[Smirnov]

Re: "it was a smaller cut than the alternatives"

@overunder

"Everything you're implying is very conditional and also supports a monopolistic view in general."

What an intellectually lazy response, not only because pretty much everything is in some way conditional. You may or may not have a point but since you didn't tell us what that is we'll probably never know.

You also might want to educate yourself about what legally constitutes a monopoly, because it doesn't mean what you think it does.

""...is the by far most profitable (for developers) mobile app platform that ever existed"

The rings of Saturn are now shaking.... THE POWER OF THE iOS APP STORE!!!!"

Based on your other response I'm sure it took you a while to come up with that (and it probably sounded witty in your head), but as before you'd have done much better had you used the energy to do some research first. Because it's quite well known that the iOS app store is the by far most profitable mobile app store, and has been so for a very long time.

https://macdailynews.com/2020/12/30/apples-app-store-generated-more-than-double-the-revenue-of-googles-play-store-in-2020

"Apple’s App Store has once again captured the bulk of the revenue generated between the two major platforms, iOS (28.19% share) and the derivative Android (71.18%). This despite iOS share of the market standing at 28.19% vs. Android’s 71.88% as on November 2020 (StatCounter). (Ford’s share of the worldwide auto market is also far larger than BMW’s. )

Apple’s App Store saw a whopping 68.4% of the spending, or $278.6 million, up 35.2% year-over-year. Google Play saw just $129 million in revenue, less than half of Apple’s and growing more slowly, up slightly more than 33% Y/Y."

Of course that's implying you're even interested in facts and not just looking for re-inforcement of your slanted world view.

[Anonymous Coward]

Re: "it was a smaller cut than the alternatives"

Except when your personal software delivery method fails, the end user is going to blame iOS and not your backend system the user knows nothing about.

Apple quite rightly don't want poor services from developers tarnishing the app store or the reputation of iOS.

They also want to ensure you're doing the correct things with users data and are correctly following regulations and applicable laws.

Again, if you muck up and loose customer data, it's the app store that ends up looking bad.

[Anonymous Coward]

Re: Its funny, if you don't care.

Apple started the 30% thing, and whinging aside, it was a smaller cut than the alternatives.

Indeed. Ever tried to publish a book? I was shocked..

[Gene Cash]

Most apps are trash anyway

I have encountered very few apps worth paying for.

I don't really care if Apple and Google fleece these sweatshops for all they're worth.

[RyokuMas]

Re: Most apps are trash anyway

... and then people wonder why apps -or games at least - are stuffed full of ads and in-app purchases...

[Anonymous Coward]

Re: Most apps are trash anyway

A friend and I made a mobile puzzle game in our spare time as an exercise.

We gave away the first few levels and then charged to unlock the rest. No ads as we both hated them. We got a lot of complaints about that business model (shareware). Only 1% of people paid and it got rated poorly because of the shock of having to pay for later levels even though we made it clear in the store description.

So we made the whole thing free, put in ads between some levels and added a one-off payment to remove the ads. We had 10 million downloads, better ratings and made a chuck of money from the ads. Still only 1% of people paid to remove the ads which was a rounding error compared to the ad income. We chose to only show only mobile game ads as at least they were relevant.

Some people want everything for free and will put up with ads. Ad brokers will pay to have their ads shown even though they probably didn't sell any more product, but were able to convince other game makers that it might.

When the copycat versions of our game arrived, it was nice to see comments saying they weren't as good as our original. No sweatshop involved, as I have a fan on my desk.

[Version 1.0]

Re: Most apps are trash anyway

Most ads are trash anyway, I see a lot of ads when my fat fingers slide to the wrong side of an app option. I suspect that this is seen as a "feature" by Google.

[TonyJ]

Re: Most apps are trash anyway

I'm ok, Jack...

[Potemkine!]

In a way it's a victory for Epic, Google seeming to recognize it was abusing its position to screw developers.

Alphabet annual net income for 2020 was around $40,269,000,000 (+19% compared to 2019). I guess it can make that move without endangering the company.

[Anonymous Coward]

You think Google would bother if they couldn't make even more money from this move?

I'm not an accountant, but it's not hard to imagine that this is a new lose leader in the category of "Retail" marked "Low Capitalization" (or whatever) that somehow gives them the opportunity to write off 99% of 15% which wasn't earning anything anyways... money from nothing. Since "Advertising" is separate from "Retail", all the ad revenue brought in by the new fish biting because of this move won't affect the poor performance of "Retail", thus money from nothing and more money from spying advertising. I could be 100% wrong about that creative accounting, but it's Google man, they do nothing unless it interests them (the definition of greed is?).

[Pseu Donyme]

App stores are natural monopolies (or close enough) ...

... so they really ought to be run as regulated utilities. That competition turns to monopoly (or close enough for practical purposes) in the general case is due to a version of the network effect: the nature of the beast is that app developers and users attract each other which tends to result in one store becoming more and more dominant over time akin to the emergence of the de-facto monopoly of Windows. Also, developers and users having to deal with more than one app store per platform is wasteful; not the same but similar to 'traditional' natural monopolies where the waste would come from the unnecessary duplication of a physical network (e.g. an electrical one).

[IGotOut]

That's odd.

Usually when you buy more through a supplier, you get a discount.

Ahhh Google and Apple.

Make the rules up as you go along.

[gnasher729]

Re: That's odd.

Usually when you have lower income you pay less tax. Like in the UK, first £12,500 is tax free, then a huge range is 20%, then a larger range is 40%, and finally 45%. Maybe Apple and Google should copy that scheme.

[Robert Grant]

Re: That's odd.

Don't forget the 60% between 100k and 120k.

[Version 1.0]

Re: That's odd.

Ap stores are like brothels but brothels are less expensive.

[gnasher729]

Interesting how Tim Sweeney feels the need to put his opinion in. The whole thing has nothing to do with him whatsoever. Lots of small developers are happy, that's what counts.

[Brewster's Angle Grinder]

It's Epic that have driven this. And we owe them thanks for that.

But would the rates be even lower if there was fair competition? Have we just been bought off? If we were free to use Epic payments, would that been 10%, 7%, or even less?

[gnasher729]

Would Epic supply the same services to you that Apple provides? (If you are not able to list at least half a dozen services then don't talk about the subject).

[Jon 37]

Free markets

"In a free market, Sweeney said, rates would be much lower due to competition"

In a free market, anyone could put whatever app they wanted on the app store. No scanning for spyware, trojans or other malware. No proof that this app really is from the bank it claims to be from. No checking for scams. No checks that apps are age-appropriate. No checks that the app actually does what it says and could reasonably be considered worth buying.

Apple actually adds a lot of value for it's customers, by carefully curating the App Store. OK, it's not perfect. And from the point of view of the legitimate app authors there is definitely room for improvement.

Also, in a free market, if you wanted your "free" app to be distributed via an app store, you would have to pay the app store for the distribution and marketing they are doing. In the Apple/Google model, truly free apps are free to distribute, they're subsidised by Apple/Google's profits from paid apps. And "free" apps with in-app purchasing are distributed in exchange for Apple/Google getting a cut from the in-app purchasing revenue, which they enforce by requiring you to use their own in-app payment mechanism.

I'm not saying the app store prices are reasonable, that's always going to be a judgement call. I'm just saying that the app stores provide significant value over and above a payment processor.