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Why Google gives up its 30% commission on subscriptions

Why Google gives up its 30% commission on subscriptions

On Thursday evening, the announcement had a bombing impact. In a blog post posted on its developer site, Google announces that it has decided to change its business model “Asking Developers in Many Industries and Regions”. While most subscriptions are now taxed at 15% (previously, Google charged 30% in the first year and 15% thereafter), in rare cases, Google plans to test the new 10% tax.

Operation Fainting

The language components used by Google are not trivial. In its press release, the brand repeatedly states that it was the feedback from the developers that allowed it to make this decision, as it was unaware of the problem the commission might present. In addition, Google has repeatedly said that most developers are never taxed because 97% of apps are free, which, despite the changes, allows the world to be reminded that its Play Store business is not a scam. Anyway. During the epic test this communication is very similar to Apple, which recognizes the strain and at the same time explains that it only wants to protect its ecosystem. At Apple, the 30% subscription tax is still in effect for the first year.

From now on, from the first subscription to the first subscription, if the user goes through the Play Store, the developer will have to pay only 15% of his revenue to Google (keep in mind that his apps can be installed elsewhere on Android). This change will take effect on the 1st of this monthThere is January 2022, according to Google, has already received the first compliment from developers. Operation Reconstruction launched.

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In the process of always reconciling its relationship with the developers, Google announces a media project aimed at providing music or e-book subscription services. For them the commission is 15% not 10%. It’s not hard to guess that Google’s target is Spotify, which is very annoying with the Play Store and App Store, preventing its users from subscribing directly to the Google and Apple stores. Do you think Sundar Pichai’s company will be eager to make a comeback on Spotify and other big sites, with less than 10% commission? By the way, it can save him a case.

Find out more in the video:

Do not touch 30% of apps and games

At first glance you might think that Google has found a way to reconcile the app stores and the big developers. However, be careful not to be fooled by Google’s announcement.

In fact, the new 10-15% commission is about subscriptions. All app purchases, such as removing ads or purchasing game tokens, will be taxed at 30%. The Apple / Epic Games case taught us that the vast majority of App Store revenue comes from mobile games. In other words, a 10-15% commission should not wreak havoc on Play Store revenue, and developers who are severely affected by the 30% tax will continue to do so.

No matter how valuable this first step is, it is clear that Google, like Apple, needs to make other changes to convince executives around the world of its good faith. When it comes to the App Store, we would not be surprised to see Apple reach a 15% subscription fee in no time.

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Source: Google