Google Play Store and Apple App Store Fees

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Google Play Store and Apple App Store Fees
Any marketplace charges certain fees for listing your products on their sites. Percentages, rates, and levels differ on the basis of a particular place and sometimes cause dissatisfaction among developers (just recall the large-scale rumble of Apple and Epic Games regarding the app store fee). While some titles are pretty famous and self-sufficient now, they might not have achieved such success without marketplaces.

The amount that software devs and publishers share may differ according to the particular spot. However, despite being direct competitors, Play Market and App Store, the industry giants, get the same percentage of fees. In fact, they’re only slightly different in terms of content. Many creators build universal products that are available on both main platforms.

In this post, we will get a closer look at how the leading platforms make money by hosting your games and apps and also compare their approaches to calculating platform fees. In addition to realizing how the major tech giants work, you also should know there are many other services that can publish your titles as well.

How Do Google Play Store and Apple App Store Make Money?

To understand how the earnings of large sites are formed, you should understand what exactly they’re. A marketplace is a service that does not sell its own products. It serves as a place where creators can put their products. That is, they can be considered hubs that collect services or goods from different manufacturers.

Such platforms have many advantages for creators. Thanks to them, you get traffic and convenient tools for managing it, so you do not need to spend money, time, and other resources to attract customers, as, for example, you need to do with your own store or website. Moreover, buyers tend to trust large providers more, especially if various products (different types of applications and games for every taste) can be bought in one place. So marketplaces can be seen as a profitable alternative to a website.

Since such platforms do not produce or sell anything themselves, how do they make money? The answer is an app store commission for every sale you perform. Moreover, depending on your annual turnover and the monetization scheme, the percentage may differ. Aspiring software devs are known to raise the issue of high fees regularly. In 2021, the environment became so tense that major providers were forced to change the percentage and make it more reasonable.
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Despite the devs’ and publishers’ dissatisfaction with Google and Apple monthly charges, they still continue to place their titles on Apple Store and Play Market since they’re the default marketplaces for almost all portable devices. And if big players like Epic Games can afford to go against the rules and sell their products on their own resources, small businesses cannot take that step.

What Is an App Store Fee and How Is This Calculated

Now let’s move on to the main issue. What are platform fees exactly? Since your games and apps are hosted on major marketplaces, you have to share some of your profits. At the same time, there is a clear division according to the types of income you generate:

  • Paid services. Here everything is very clear. For each user’s transaction and app installation, a piece of your income is submitted to the markets. The same principle works here as with any other reseller. They collect the fee for advertising and promoting you within the platform.
  • IAPs. In this case, we mean investments that a client can make through your application. Fees are based on the amounts you receive. And while there is a temptation not to implement IAPs to avoid paying marketplace fees, their importance should be underestimated. For details on how to utilize these items to promote apps, see our dedicated article “In-App Purchases: Increase Your Product Visibility in App Stores.”
  • Subscriptions. The similar principle works with subscriptions as with IAPs. You’ll have to pay a set percentage to digital stores for each membership renewal.
The Google and Apple in-app purchase commission doesn’t apply to you if buyers receive physical goods through your apps. That is, if you utilize your product as an e-commerce tool and sell something that, after payment, will be delivered to customers in the hands, you will not have to share such income. Also, if you cooperate with promotion networks, place advertisements for third-party services in your apps and games, and receive payments, such income is not subject to commission.

All app store payments from your users should go through digital stores’ payment systems. Customers cannot pay directly to your account to purchase products. At the same time, you do not receive this money immediately on the day of transactions, but after some time. The same is true for deductions from your profits. The amount of regular deductions in favor of marketplaces directly depends on your income. Deadlines and minimum thresholds vary by site.

Apple App Store Fees vs. Google Play Store Fees

These two marketplaces set the tone for the entire industry. And although they are major rivals, they cannot change (increase or decrease) commission fees without checking each other’s revenue. It is exactly what happened in 2021 when Apple revised its terms for listing products in its store, and sometime later, Google was forced to do the same. So, how do the Play Market and Apple Store charge publishers and creators?

App Store

Does Apple charge for apps? Yes, before these global changes, the marketplace adhered to the standard Apple 30 percent cut. This high percentage still exists, too, but it only applies to creators whose income exceeds $1 million (your earnings from the previous year are considered when calculating the amount). Such popular services can be counted on the fingers since most devs get much lower net profits.

How much does the App Store take from smaller companies? As part of its support for small companies, novice developers, and start-ups, the company offered a reduced rate of 15%. It applies to those whose income is lower than $1 million. Also, even top Apple Store apps can qualify for a lowered fee if their buyers have renewed a subscription for a year or more (only the time during which users actually paid for membership is taken into account; trials are not counted). As per the tech giant’s representatives and Sensor Tower experts, around 98% of all publishers and devs can claim a reduced rate.

Does Apple charge tax on in-app purchases? Yes, the greater part of these items is subject to fees. The only exceptions are physical products your customers can order through your software. That is, buyers get the ordered goods in their hands. All other transactions are subject to 15% and 30% deductions.

Always remember about the so-called “developer fee,” which you should provide annually if you wish to get a paid account. The enterprise version has a higher cost. Fortunately, this amount is flat and does not depend on how many applications you publish or how many IAPs you add.

Google Play

The Google app store fees have a progressive tax rate. If you get income below $1 million (like most other devs), 15% is taken from you. Following Apple, the company introduced a 12-month membership threshold, after which any products, including top Google Play apps, receive a reduced rate. However, your percentage will remain high if you are not enrolled in the creator assistance program. The commission does not apply to advertising profit and the sale of physical items.

How does Google Play charge you? The main difference between this store and a competitor is how the profit threshold works. The thing is, you may get a combined commission. All funds received up to $1 million are liable to 15%, and the rest exceeding this threshold is subject to 30%. Apple counts money for the whole previous year, and if it exceeds the specified figure, it imposes the increased rate on the remaining sum. It seems this approach is more loyal and sparing for developers. According to Google representatives, the reduced percentage applies to 99% of publishers since the income of most creators does not exceed $1 million.

You should also add a one-time (non-recurring) compensation for opening a developer profile to these deductions. By the way, all publishers and creators pay the same amount, regardless of the agency size. There are no other annual fees.

Other stores fees

Of course, Play Market and Apple’s Store are the largest names in the industry, and the guidelines and requirements they publish are usually considered first. Despite their dominance in the industry, there are other marketplaces where you have the opportunity to list your products. Let’s take a quick look at their fees:

  • Amazon: 30% off products and IAPs, games, and other software, and 20% off movies and memberships.
  • Samsung Galaxy: 30% off all items unless otherwise specified.
  • Microsoft Store: 30% on games, IAPs, business and education accounts, 15% on other items, and a non-recurring payment for opening a publisher profile.
  • Aptoid (Google Play analog): 25% for certified creators.
  • LG SmartWorld: 30% for all products and developers.
  • Huawei: 20% for educational services, 30% for non-game IAPs and paid downloads, and 50% for game IAPs.
  • MIUI (service for Xiaomi gadgets): 50% for games and 30% exclusive for Tencent products (2019 and newer).
By and large, all other platforms provide the opportunity to publish apps and games designed for Android. Apple gadgets only work with products downloaded from the branded store.

Summing up the App Store Fee Overview

Commissions, interests, and fees are an integral part of the app building process. Whether developers like it or not, they have to put up with it. As you can see, industry leaders have largely the same requirements:

  • the reduced rate of 15% on income below $1 million and subscribers paying within 12 months;
  • the standard rate of 30% on profits above $1 million.
The difference is that Google calculates the fee based on all of your earnings from the previous year. On the other hand, Apple offers a more loyal policy: income up to the threshold is subject to the reduced rate, and everything above this threshold is subject to the standardized rate. Also, each provider has certain fees for opening a creator account.

When placing games and applications, you should comply with the guidelines of a specific marketplace and be prepared for mandatory commissions. These costs are extremely important to consider when calculating the final cost of your product, memberships, and IAPs. They are added to all other expenses you have to deal with as a creator or publisher.