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Mobile Monday: Google Play Service Fees Reduced to 15% for the First $1M Revenue, Smartphone Gaming Grossed $64 Billion in 2020

Posted Mar 21, 2021

Game developers around the world rely on the App Store and Google Play to get their games in front of valued audiences. This kind of exposure can come at a hefty price in the form of commission fees. After some pushback by the gaming industry, Google Play announced that they are reducing service fees starting this summer. Meanwhile, a new report revealed smartphone gaming grossed $64 billion in 2020. To learn more about mobile gaming, read on for this week’s Mobile Monday!

Google Play Revenue Cut Lowered to 15% on First $1 Million

In an effort to boost developers’ businesses, Google announced it will be slashing its commission on the Play Store for in-app digital products. An update on the Android blog said that the company would lower its revenue share to 15% for the first $1 million each developer makes every year. This new policy will be effective on July 1st and 99% of Google Play developers are expected to benefit from this 50% reduction in fees. 

Google’s blog update also added that scaling an app didn’t stop at the $1 million mark. The tech giant stated, “we’ve heard from our partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit. This is why we are making this reduced fee on the first $1M of total revenue earned each year available to every Play developer, regardless of size.” Google is not the first company to make this commission change, as Apple made a similar decision in November 2020.

Gaming Industry is Expected to Earn $189.3 Billion This Year

Next Games‘ annual report revealed the global games market generated $159.3 billion in 2020, representing a 9.3% growth. According to the report, the biggest contributor was smartphones which grossed $63.6 billion last year, growing 16%  year-over-year. Furthermore, tablets made $13.7 billion with a growth rate of 3%. Combined, mobile devices brought in $77.3 billion. The report indicated that spending in mobile games increased despite the decline in household income. The mobile games industry reached new heights and earned 77.2 billion in 2020, equivalent to a 13% growth from 2019.

Console games were the second top-grossing platform and made $45.2 billion. PC and browser games generated $33.9 billion and $3 billion, respectively, the latter decreasing 13%  year-over-year. Next Games’ report also pointed out that socializing was the #2 reason people have spent more time playing games. Many brands are looking to enter the virtual experience of gaming. Gaming is expected to continue serving as a platform for virtual gatherings, fostering a needed sense of community.

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