- Shares of app developers rose on Thursday after Google announced it would reduce the company's cut from subscriptions on its Android app store.
- Google's move could significantly reduce costs for any company that makes a lot of money through in-app purchases on Android.
- Google collected $11.6 billion in in-app purchases worldwide in 2020 on $38.8 billion in spending on the Google Play store, according to an estimate provided by analytics firm Sensor Tower.
The change by Google would cut the commission on recurring subscriptions through the Google Play store from 30% to 15%, a move that could significantly reduce costs for any company that makes a lot of money through in-app purchases.
Google also said it would introduce a new program for apps that have large content costs, like streaming music or TV shows, which could lower Google's take even farther to 10%.
Google and Apple have both been slashing fees amid pressure from lawmakers and regulators over the power that the dominant app stores hold within their developer ecosystems. Google went even further than Apple, which has cut its take from 30% to 15% in many cases, including for apps making less than $1 million per year, news apps, and other services.
"This is great news!" tweeted Duolingo CEO Luis Von Ahn, after Google's announcement. "This reduction in subscription fees will help Duolingo accelerate our mission of providing universally available. education."
Gaming stocks also rallied as games make up the majority of Google Play store revenue. Roblox rose about 6% and mobile game developer Zynga initially spiked on the news before settling down to a gain of about 1%. AppLovin, which owns several game studios, rose over 3%.
Google collected $11.6 billion in in-app purchases around the world in 2020 on $38.8 billion in spending on the Google Play store, according to an estimate provided by analytics firm Sensor Tower.
Google's move raised the possibility that Apple could decide to match its rival as the two app stores often have similar policies and take rates. Apple's store is generally considered more lucrative for developers than Google Play and most companies distribute software through both. Of the two, Apple has faced more intense pressure from regulators over app store fees.