Google Play on March 16 announced the reduction in service fee to 15 percent for developers selling in-app digital goods and services. The new rate would be applicable from July 1, 2021. The discount would be applicable only for earnings up to $1 million. For earnings beyond, the existing commission rate of 30 percent would be levied. With this change 99 percent of developers globally that sell digital goods and services with Play will see a 50 percent reduction in fees.
The amount saved during the initial phase of app development, when the earnings are below $1 million would be crucial for developers to scale up their expenditure on hiring engineers, marketing their product and increasing server capacity. While these investments are most critical when developers are in the earlier stages of growth, scaling an app doesn’t stop once a partner has reached $1M in revenue. Google heard from their partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit. This is why Google making this reduced fee on the first $1M of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size. More than 97 percent of apps globally do not sell digital goods and therefore do not pay any service fee.