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Apple announces lower app store cut from 30% to 15% for devs making less than $1M per year in 2021.

Content of the article: "Apple announces lower app store cut from 30% to 15% for devs making less than $1M per year in 2021."

As part of their "small business program", Apple will now take a lower 15% cut of developer revenue until that developer reaches $1 Million in yearly income. Previously, Apple took a flat 30% cut of all app sales and in-app purchases.

Google Play takes a similar 30% cut from Android apps. Steam takes a 30%, but decreases it to 25% and then 20% once a product reaches milestones of $10 million and $50 million (yes, that's basically the opposite of Apple's new policy).

Original press release here:

Apple doesn't release official sales data, but other sites have been speculating about the impact this will have on app developers. NYT cites the analytics firm Sensor Tower

The change will affect roughly 98 percent of the companies that pay Apple a commission, according to estimates from Sensor Tower, an app analytics firm. But those developers accounted for less than 5 percent of App Store revenues last year, Sensor Tower said. Apple said the new rate would affect the “vast majority” of its developers, but declined to offer specific numbers.

Apple cite the pandemic and economic downturn as reasons for the change. Tech and finance journalism sites have speculated that this may be a PR move connected to Apple' (and Google) ongoing lawsuit against Fortnite developer Epic Games over unfair practices related to their app store guidelines, revenue split, and payment processor options (Epic's own PC storefront takes a 12% cut). Apple also notes in their press release that

Earlier this year, an independent study by the Analysis Group found that Apple’s commission structure is in the mainstream for app distribution and gaming platforms.

Notably, Apple also doesn't mention how long this initiative will last beyond 2021.

If this is permanent, I think it's a decent move that will help a lot of smaller indie developers. I think it's clear that there's a lot of dissatisfaction around the "standard" 30% cut. Ideally, this would ripple out and create similar policies at Google, Valve, maybe even on consoles. But I also wouldn't be surprised if Apple wins their lawsuit and quietly goes back to a flat 30%.

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