To assuage regulators, first Apple and then Google cut their fees for small developers in half. Turns out they can afford it.
From CNBC's "Google and Apple are giving up less than 5% of their revenue from apps with payout changes" posted Wednesday:
New estimates from analytics firm Sensor Tower suggest neither Apple nor Google is giving up a substantial amount of revenue by changing the fees they charge developers.
The report follows changes Google announced on Tuesday when it said it plans to change the way it charges app makers on its Google Play app store, following a similar move Apple made in December.
Neither company is leaving much money on the table with their fee reductions, compared to the scale of their app store businesses, according to a new estimate from app analytics firm Sensor Tower:
If the 15% fee schedule on revenue up to $1 million had been in place on Google Play in 2020, Google would have missed out on $587 million, or about 5% of Sensor Tower’s estimate of $11.6 billion in Google Play fees for the year. If Apple’s program had been in place for 2020, Sensor Tower estimates that it would have missed out on $595 million, or about 2.7% of its estimated $21.7 billion in App Store fees in 2020.
My take: Unsurprisingly, big developers still paying 30% are not assuaged. Case in point: Epic Games' Tim Sweeney...
It's a self-serving gambit: the far majority of developers will get this new 15% rate and thus be less inclined to fight, but the far majority of *revenue* is in apps with the 30% rate. So Google and Apple can continue to inflate prices and fleece consumers with their app taxes.
— Tim Sweeney (@TimSweeneyEpic) March 16, 2021
Don’t like your 30% cut. Okay. To get in our store we have a $500k annual developer fee to use our tools + a substantial monthly storefront rent. Don’t like it? Too bad. Our store was built by us to serve our customers. They are not yours. Access to them is not free.
The App Store is not just a ‘card scanner’. It’s the store, the security, the full developer program, the attractive demographic etc. If Sweeney pays Apple a minimal 15% and adds his 12% fee to developers, the difference is 3%, meaningless.
Furthermore that Consoles are getting an exception? Why? Makes zero sense.
Lawmakers are buying into this crap. It is inconceivable to me.
If Apple were to provide the App Store at no cost, would these develpers pass any savings on the consumer? Fat chance. Self-serving garbage. (I’d like to use more colorful language).
Profit margin for all.
Once again, it’s only its size, scope and success that turns the stomach of developers and would-be regulators.
This “size & influence” argument that there must be “public utility” comparable control escapes me.
I work at a grocery store. The company authorizes what gets brought into the store for sale. How is a damn app any different than a can of beans?
Can anyone explain the difference?
When Apple designed the App store, a group at Apple had to come up with the revenue split percentage. They decide 70% to developer — 30% to Apple.
Done deal.
Next step, announce the App Store to the public and the details of it’s cooperation.
Developers bought in. Didn’t argue one whiff about it. A robust app developer community grows and becomes a continued and growing success for all.
What’s different today?
Who’s singing the greed song now in this arrangement?