GamesIndustry: Google has no plans to lower its 30% cut on Google Play, "It's been the industry standard"

Oct 25, 2017
10,590
Indonesia
#1
In an earnings call following the tech giant's latest financials, transcribed by Seeking Alpha, the executive team was asked whether this was the "right long-term rate for Google Play" after "large developers are starting to come up with... workarounds."

This is almost certainly a reference to Epic Games' decision last summer to release Fortnite on Android via a separate launcher rather than the official store, with founder Tim Sweeney telling GamesIndustry.biz at the time 30% was "too high a cost" for developers to stomach.
"On Google Play... thousnads of developers rely on it to safely and seamlessly distribute their game to billions of Android users worldwide. And we invest a lot in our infrastructure to continuously make sure their overall experience is safe and results in high engagement and for the developer's back.

"So I think there's a value exchange there and it's been the industry standard. And so, I think we will continue down that path... but obviously always adapt to where the market is."
More here: https://www.gamesindustry.biz/articles/2019-02-11-google-has-no-plans-to-lower-its-30-percent-cut
 
Oct 25, 2017
6,794
#2
This is the thing that seems not to be understood by a lot of people, developers included. The rate covers for the services and infrastructure offered by the distributor, it's not just the store fee.

Epic might charge 12% but offers much less and some issues with the payment processing, customer support, localizations, QA are already popping up to prove that point.
 
Oct 27, 2017
1,520
#4
When there's only two major mobile platforms to sell apps and they operate on different OS + hardware, why would they bother doing that?

And of course Sundar wouldn't be down for that. The dude wanted attempted a push into China.
 
Oct 26, 2017
1,190
#6
The gatekeepers who provide a tech and sales stack from tip-to-toe are at least actually doing more than a Steam or Epic store does, in terms of fundamentally enabling their end users to consume developer content. Let alone the work beyond the technical that some of them also do for developers.
 

ghostcrew

Spooky
Moderator
Oct 27, 2017
7,022
United Kingdom
#8
Android OS is too much of a behemoth, I doubt Apple would even do it too.
Exactly. You can see why someone like Epic would cut that fee - to try and entice devs onto the platform while they try to dethrone the current king. Google Play doesn't need to do that. They're dominant. You don't see iTunes talking about lowering their 30% cut for music because a gaming storefront has introduced a lower cut either.
 
Oct 25, 2017
4,806
#9
The gatekeepers who provide a tech and sales stack from tip-to-toe are at least actually doing more than a Steam or Epic store does, in terms of fundamentally enabling their end users to consume developer content. Let alone the work beyond the technical that some of them also do for developers.

Which is what Steam also does.
People keep thinking Steam is only a storefront when it became an entire backend that is necessary to PC gaming, VR and Linux.
 
Dec 17, 2018
603
#11
Exactly. You can see why someone like Epic would cut that fee - to try and entice devs onto the platform while they try to dethrone the current king. Google Play doesn't need to do that. They're dominant. You don't see iTunes talking about lowering their 30% cut for music because a gaming storefront has introduced a lower cut either.
I'd be surprised if Google receives any backlash from this.
 
Oct 26, 2017
1,190
#12
Which is what Steam also does.
People keep thinking Steam is only a storefront when it became an entire backend that is necessary to PC gaming, VR and Linux.
They provide a software tech stack.

But some of these gatekeepers do a lot more than that. Literally from the device in your hand using to play the game, through the marketing and retail/distribution infrastructure that got it there - that in some cases created the market - through a much more intensive QA process than Steam or Epic has, through to the more 1 on 1 tech support some provide devs...all on top of the software and network infrastructure we might credit a Steam with.

Not all gatekeepers are pulling the same work to curate and present a market to software/game developers. All I'm saying is that some can lay better claim to 'more' of a cut than Steam or Epic, perhaps. How much 'more' that is, well, we can debate. But Epic and Steam build on top of a large existing chain built and marketed by others. Some gatekeepers out there create an entire new chain from scratch.
 
Oct 25, 2017
4,806
#14

If you like to pay more, sure I suppose GoEpic is the way to go.


They provide a software tech stack.

But some of these gatekeepers do a lot more than that. Literally from the device in your hand using to play the game, through the marketing and retail/distribution infrastructure that got it there - that in some cases created the market - through a much more intensive QA process than Steam or Epic has...all on top of the software and network infrastructure we might credit a Steam with.

Not all gatekeepers are pulling the same work to curate and present a market to software/game developers. All I'm saying is that some can lay better claim to 'more' of a cut than Steam or Epic, perhaps. How much 'more' that is, well, we can debate.
Well yeah, they provide an OS. Steam also does the same for Linux. And offer an OS within an OS now with Steam.
 
Oct 27, 2017
37
#17
Epic doesn't give a damn about fair prices. It has always been about competition and getting a piece of the pie that Steam has been competent enough to hoard for so long. Epic, like any rational business, is using the whole developer share as a means to break into the market. They know Steam customers are too loyal and invested, so the only way to break in is through developers and incentivising them to exclusively use their platform.

You won't see Epic try this with Google and Apple because such a strategy is not possible due to their size and control.

At the end of the day, what Epic is doing is a natural part of competition. We just have to hope as consumers that it ultimately benefits us rather than screws us.
 
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Oct 25, 2017
4,806
#20

wth are you talking about?
The fact that this cut is unsustainable and that any raise of price is passed onto the customer.
As I said, the missing 18% are going somewhere indeed: Passing the cost on customer when the payment fees are slightly higher than usual for Epic or skipping on the service altogether.

Why do you think Epic wants to shutdown competition ?
 
Oct 26, 2017
4,913
#22
I have no issue with developers trying to secure a bigger revenue cut. I do have an issue with the fact that so far these efforts target (relatively) open platforms while walled gardens can safely collect their 30% unopposed.
 
Jan 7, 2019
85
#23
Funny how the "monopolies" according to ERA are always the one that didn't force their way through moneyhats and buyouts.
I don't know about what Era's hivemind has to say about this, but the rule of thumb is : if someone got rich, he/she/it didn't do so only while politely strictly following the rules. There are exceptions.

Back to topic though, this is an incredibly naive thing to say from a corporate executive (at this level). I am certain he received calls right after from his colleagues/friends asking him how he came up with such laughable non-sense. He will be the butt of their jokes till the end of the year. Poor guy.
 
Oct 26, 2017
1,190
#24
Well yeah, they provide an OS. Steam also does the same for Linux. And offer an OS within an OS now with Steam.
True, but what portion of developers' sales are going through those efforts?

It's also still small beans compared to what some of these other gatekeepers are doing.

When a developer asks - say - an Apple, 'what are you doing for me that Steam isn't?', Apple can point to the billions it spends annually getting fundamental enablers into end-users hands, on marketing the eco-system in general, on fundamentally building the market for those developers from scratch. The console makers can say the same. Google - though it relies on hardware partners for a lot of its hardware marketing and distribution - can claim to have fundamentally built a new chain that links dev to customer completely.

Steam - when it comes to most of the revenue it generates for most developers - only can claim responsibility for a part of the chain. It is a very low-overhead operation that focuses on a part of the chain that it can focus on in a lean fashion. It avoids the stuff that requires really heavy lifting from a operating expense POV. There is much more room for devs to ask what exactly Steam or Epic is doing for its cut than an Apple or a Google or a Xbox or a Playstation or whatever.

I have no issue with developers trying to secure a bigger revenue cut. I do have an issue with the fact that so far these efforts target (relatively) open platforms while walled gardens can safely collect their 30% unopposed.
Many of these gardens can only be walled precisely because their holder has invested so much to build them, and to build a market for developers to sell into. Lack of competition aside, that creates a greater argument for them in justifying their cut. Many of these gardens are costing many billions annually to build and grow, with relatively low margins, all in the effort to expand a software pie that devs can sell into.
 
Oct 25, 2017
4,806
#25
I don't know about what Era's hivemind has to say about this, but the rule of thumb is : if someone got rich, he/she/it didn't do so only while politely strictly following the rules. There are exceptions.

Back to topic though, this is an incredibly naive thing to say from a corporate executive (at this level). I am certain he received calls right after from his colleagues/friends asking him how he came up with such laughable non-sense. He will be the butt of their jokes till the end of the year. Poor guy.
Sometimes, some people just understand the market better than others.
 
Jun 19, 2018
1,632
#27
This is the thing that seems not to be understood by a lot of people, developers included. The rate covers for the services and infrastructure offered by the distributor, it's not just the store fee.

Epic might charge 12% but offers much less and some issues with the payment processing, customer support, localizations, QA are already popping up to prove that point.
Those same issues were part of almost every new store, wither they charge 12% or 30%. Hell most are still part of a lot of stores that have been active for more than five years and charge 30%.
 
Oct 25, 2017
4,806
#28
True, but what portion of developers' sales are going through those efforts?

It's also still small beans compared to what some of these other gatekeepers are doing.

When a developer asks - say - an Apple, 'what are you doing for me that Steam isn't?', Apple can point to the billions it spends annually getting fundamental enablers into end-users hands, on marketing the eco-system in general, on fundamentally building the market for those developers from scratch. The console makers can say the same. Google - though it relies on hardware partners for a lot of its hardware marketing and distribution - can claim to have fundamentally built a new chain that links dev to customer completely.

Steam - when it comes to most of the revenue it generates for most developers - only can claim responsibility for a part of the chain. It is a very low-overhead operation that focuses on a part of the chain that it can focus on in a lean fashion. It avoids the stuff that requires really heavy lifting from a operating expense POV. There is much more room for devs to ask what exactly Steam or Epic is doing for its cut than an Apple or a Google or a Xbox or a Playstation or whatever.

"small beans" and then you proceed to tell me Apple is working to improve the ecosystem in general.
That's a bit contradictory.
Also when you put Xbox or PlayStation into the equation: Why do they have more room to ask for their 30% on PSN or XBL compared to Steam when they do less and charge both the devs and customers ?
 
Oct 27, 2017
1,290
#34
I have no issue with developers trying to secure a bigger revenue cut. I do have an issue with the fact that so far these efforts target (relatively) open platforms while walled gardens can safely collect their 30% unopposed.
My issue as well. Where is the pushback on Apple, Sony etc. Closed systems are the absolute worst for competition and yet they get a pass for being worse for consumers because they didn't offer any choice in the first place.
 
Oct 26, 2017
4,913
#35
When a developer asks - say - an Apple, 'what are you doing for me that Steam isn't?', Apple can point to the billions it spends annually getting fundamental enablers into end-users hands, on marketing the eco-system in general, on fundamentally building the market for those developers from scratch.
That's what Valve did. Developers like Epic pronounced PC gaming dead while Valve invested in it.

Many of these gardens can only be walled precisely because their holder has invested so much to build them, and to build a market for developers to sell into. Lack of competition aside, that creates a greater argument for them in justifying their cut.
Is that the developers' argument or yours? I haven't heard any developer argue that Apple or Sony earn their cut. Have you?
 
Feb 5, 2018
1,062
#37
My issue as well. Where is the pushback on Apple, Sony etc. Closed systems are the absolute worst for competition and yet they get a pass for being worse for consumers because they didn't offer any choice in the first place.
People are used to status quo?
 
Oct 30, 2017
645
#39
My issue as well. Where is the pushback on Apple, Sony etc. Closed systems are the absolute worst for competition and yet they get a pass for being worse for consumers because they didn't offer any choice in the first place.
You do have a choice, there are other competing closed platforms on the market. They also compete with open platforms for the same software sales.
 
Oct 28, 2017
1,386
Geneva, Switzerland
#40
For what I know, Steam had never had any issue with external piracy, when Google Play is a shooting pigeon stand for the electronic crime. The Google Play store is currently the most virulent bacteriological field since Windows 95, every week there is an infosec joke or scandale on it.
 
Oct 26, 2017
1,190
#41
"small beans" and then you proceed to tell me Apple is working to improve the ecosystem in general.
That's a bit contradictory.
No I said apple does a lot more to faciliate iOS software getting into people's hands. They own - build, scale, market - the entire chain from dev to user.

Valve only fills in a part of the chain.

Also when you put Xbox or PlayStation into the equation: Why do they have more room to ask for their 30% on PSN or XBL compared to Steam when they do less and charge both the devs and customers ?
Do less?

Microsoft and Sony spend billions annually building their markets for developers and serving developers. Again, they own - operate, scale - the entire chain from dev to end consumer. I could iterate the things they do that Valve does not - from QA, through marketing, hardware production and distribution, retail chains and more besides - but to simplify it by looking at operating activity through the lens of expense, if you're telling me that they're spending billions doing nothing (>$25bn combined last year), or doing less than Valve does, well, you'll have a hard time convincing me of that.
 
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Oct 31, 2018
1,210
#43
Funny how the "monopolies" according to ERA are always the one that didn't force their way through moneyhats and buyouts.
Why do you say according to ERA instead of according to many or some posters on ERA? It's not like everybody here has the same opinion.

Anyway I can't see Google budging. Not sure what they charge now but at one time they took a 45% cut on all ad revenue on YouTube. Now that's something that should be cut to 30% if they haven't already.
 
Oct 26, 2017
1,190
#44
That's what Valve did. Developers like Epic pronounced PC gaming dead while Valve invested in it.
But they still didn't build and own the entire chain the way other gatekeepers do.

Apple and others built entire chains themselves - including all the expensive bits - and literally created new markets. Valve saw potential in an existing market and worked on part of the chain used to access that market. And indeed that helped grow that market. But if the operation of that part of the chain is low-overhead - and it seems it is, relatively - devs might be more easily inclined to ask why that can't be passed on to them.

Is that the developers' argument or yours? I haven't heard any developer argue that Apple or Sony earn their cut. Have you?
As I said, it's what Apple or Google or Sony or MS might say when asked by a dev 'what have you done for me lately?'. So no, it's their argument rather than the developers' (necessarily). But I think it's a reasonable one if asking for 'more' relative to others. Again, as I said earlier, how much 'more' that should be is debatable, but that it could be reasonable to ask for more is pretty uncontroversial IMO. I think it will be interesting to see if that debate bleeds into the console or phone space, but if it does, I expect the debate will be a bit different.
 
Oct 27, 2017
4,421
#45
No I said apple does a lot more to faciliate software getting into people's hands. They own - build, scale, market - the chain from dev to user.

Valve only fills in a part of the chain.



Do less?

Microsoft and Sony spend billions annually building their markets for developers and serving developers. Again, they own - operate, scale - the entire chain from dev to end consumer. I could iterate the things they do that Valve does not - from QA, through marketing, hardware production and distribution, retail chains and more besides - but to simplify it by looking at operating activity through the lens of expense, if you're telling me that they're spending billions doing nothing (>$25bn combined last year), or doing less than Valve does, well, you'll have a hard time convincing me of that.
Yeah, I agree Steam is getting piled on in this situation, but I was lost at Sony, MS do less.
 
Oct 25, 2017
6,519
#46
The industry standard is 30% and it won’t change unless competition comes along to change it.
Consoles are closed platforms so you have to accept their terms. iPhone is too, but I think android and PC are a lot more open.
Not sure if Epic is interested in an android store or if google would allow it, but we’ll see

Last I checked android store is pretty awful so hopefully there wouldn’t be any console/storefront warriors sticking up for it.
 

BronsonLee

Don't worry I'm on the case
Moderator
Oct 24, 2017
11,671
#47
It's absolutely the industry standard across loads of media even outside of games. I doubt even Fortnite would force Google to lower that cut on their app store.
They could give it a whirl since Fortnite isn't on the play store at all IIRC
 
Oct 25, 2017
4,806
#48
No I said apple does a lot more to faciliate software getting into people's hands. They own - build, scale, market - the chain from dev to user.

Valve only fills in a part of the chain.



Do less?

Microsoft and Sony spend billions annually building their markets for developers and serving developers. Again, they own - operate, scale - the entire chain from dev to end consumer. I could iterate the things they do that Valve does not - from QA, through marketing, hardware production and distribution, retail chains and more besides - but to simplify it by looking at operating activity through the lens of expense, if you're telling me that they're spending billions doing nothing (>$25bn combined last year), or doing less than Valve does, well, you'll have a hard time convincing me of that.

That's where you're wrong when you're putting the overall expense in relation to the use of PSN/XBL.
Do they have bigger expense than Valve overall ? Yes. But these arent related to what they're doing with their store... Since they dont only take money through the store but also sales of hardware and royaltie fees.
In the end, yes, they do less for the devs paying the 30% cut.
 
Oct 27, 2017
1,290
#49
You do have a choice, there are other competing closed platforms on the market. They also compete with open platforms for the same software sales.
I avoid Apple especially for that very reason. But my point is if people are complaining about the cut in an open system why aren't they also complaining about the cut in systems where they are completely chained to one store and thus it's a bigger problem. Where are the "what does Apple do for my 30%" complaints.

I just don't like we have an industry that incentivizes more restrictive closed gardens because too many consumers, developers and regulators give them more of a pass for thier practices. I'm sure microsoft wishes they locked down windows from the beginning so they could make profit on everything sold on there and would somehow avoid scrutiny from say EU regulations about bundling thier own browser with windows as forced app choices on closed systems never get called out on that.
 
Oct 26, 2017
1,190
#50
The industry standard is 30% and it won’t change unless competition comes along to change it.
Consoles are closed platforms so you have to accept their terms. iPhone is too, but I think android and PC are a lot more open.
I think where there is some liquidity in the market, competition between closed gardens could ignite a debate here, or a 'revenue share war'.

For example, I could see it happening in the console space in the transition to next gen. The market becomes liquid again in these transitions. A hungry competitor might stake a flag here on a lower cut. (i.e. I could see Microsoft doing it). The walls around closed gardens are fairly low in the first year or two...

Phones might be a little different. I'm not sure the market is as liquid.