Google is reducing Play Store tax for 99% of app developers on the platform

Google has announced a couple of changes for developers within the Google Play Store ecosystem as part of a move to build sustainable businesses across the platform. In a statement on the Android Developers Blog, Google’s VP of Product Management, Sameer Samat, announced that Google Play’s service fee will be reduced to 15 percent for the first USD 1 million of revenue that developers make per annum.

According to Google’s numbers, this means that 99 percent of app developers that operate on the platform will see a reduction in Play Store tax of 50 percent. The changes will take effect from the 1st of July, 2021. Meanwhile, the search engine giants also explained the reasoning behind the threshold for the tax reduction, saying that “scaling an app doesn’t stop once a partner has reached USD 1M in revenue”.

“As a platform we do not succeed unless our partners succeed. Android and Google Play have always listened to our developer partners from around the world and we continue to take their input into account as we build and run the ecosystem. We look forward to seeing more businesses scale to new heights on Android, and to further discussions with our developer community to find new ways to support them technically and economically as they build their businesses.”

This adjustment comes after a year of wrangling between Google, Apple, and Epic Games over the cut that platforms receive from developers’ revenue. Apple already made a similar move at the tail-end of 2020, with the Cupertino-based company also reducing platform tax to 15 percent for developers generating less than USD 1 million in annual revenue.

From what we understand, a significant difference between Google and Apple in this case is that Apple will take 30 percent of total revenue if a developer’s annual revenue surpasses USD 1 million. Google, on the other hand, will only charge 30 percent of any revenue that exceeds the threshold set.

Regardless of the finer details, the announcement should come as good news to smaller, indie developers on the Google Play Store. As for larger players in the ecosystem, such as Epic Games, the changes may not fully “address the root of the issue. In a statement to XDA Developers, the game developers criticised the “forced” nature of Google Play, saying that it “needs to be fully open to competition”, while calling for a “genuinely level playing field”.

Of course, Epic Games also had a similar reaction when Apple announced their own version of the tax reduction. At the time, Epic Games argued that the change was merely a “calculated move by Apple to divide app creators”, as part of the platform’s aim to “preserve their monopoly on stores and payments”. Spotify, at the time, also had a similarly negative reaction to the Apple App Store update, calling the changes “windows dressing”.

If you’re an app developer on the App Store or Play Store, what do you think about the latest changes? Let us know in the comments section down below.

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