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