Apple to Cut App Store Commissions to 15%, but Not for Everyone

• Apple will go easier on developers who make less than one million in a year, reducing App Store commissions to 15%.
• This will allow smaller developers more financial freedom to grow and establish themselves in the market.
• Larger players won’t be eligible for this, so the fight in courts and anti-competition commissions will continue.

Has Apple succumbed to the pressure? It appears that it has, but not entirely. The tech giant has announced a new “App Store Small Business Program,” which has provisions for financially weaker app developers. That would include indie game developers and coders of small projects that were good enough to become apps but not that successful yet to support entire teams working full-time on them.

To help these developers grow, Apple decided to cut the App Store commissions in half for them specifically - so from 30%, they are down to 15%. More details about this program will be released in December 2020. Still, Apple has already shared the single criterion that makes a developer eligible to participate in the new program, and this is to have made up to $1 million in 2020 for all their apps on the App Store.

Those who are eligible based on their 2020 income but surpass the $1 million in 2021 will return to the 30% commission rate for the remainder of the year. If the developer falls back below the $1 million threshold in a future year, they will be able to benefit from the 15% commission again, but only during the next calendar year.

So, yes, Epic Games won’t get to see any discounts this time, and neither will most of the companies arguing against Apple’s 30% cuts, but it is safe to say that their actions played a key role in the push for a change. Maybe those who are making a lot of money in the iOS ecosystem won’t get anything this time, but the developers who needed help more than anyone are at least getting some breathing room.

Along with the announcement on the new program, Apple shared some interesting stats on the App Store. Launched in 2008, the Apple Store is currently offering 1.8 million apps to 1.5 billion iOS devices, active in 175 countries. The amount of money moved in the digital store during 2019 was $519 billion, with 85% of this ascribed to third-party developers. This is about $441 billion, so Apple’s cut from third-party developers in 2019 alone was approximately $132.3 billion.