Amazon reduces its App Store revenue cut for smaller developers
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Amazon has joined rivals Google and Apple in offering smaller developers in its App Store a more favourable cut of revenue.
From October 2021, developers that earned less than $1m (£700,000) in revenue in the previous calendar year will receive an 80 per cent share of sales by default compared to 30 per cent previously.
The move echoes Apple’s App Store which announced a similar change in November, with Google following suit in March. Those stores offered a slightly preferential cut of 85 per cent of revenues going straight to the developer. However, Amazon said it will also give eligible developers promotional credit for Amazon Web Services in an amount equivalent to 10 percent of revenue, so that developers can move their app’s services to the cloud.
In a recent survey of mobile developers, Amazon said over 94 per cent indicated they use cloud services in their application development efforts.
In terms of apps at least, Amazon is a much smaller player than rivals Google and Apple, as its app store is primarily used on its Fire-branded devices. Unlike iOS devices, Android users can also choose to install it if they wish. Amazon’s App Store houses just over 460,000 apps compared to more than 2.2m and 3.4m for Apple and Google respectively.
The recent changes to revenue splitting, first from Apple and then its rivals, follow the lawsuit filed against Apple last year by Epic Games, the developer of Fortnite. Epic was unhappy with the revenue split taken through Apple’s App Store and implemented a new payment portal within Fortnite that bypassed it and offered gamers an additional discount of 20 per cent if purchased through it. Apple hit back by removing Fortnite from its store entirely and the popular Battle Royale game still not been reinstated to this day. Following this move, Epic immediately launched a lawsuit charging it with unfair and anticompetitive practices.
In November, Epic said the changes to revenue payments were “calculated” by Apple “to divide app creators and preserve their monopoly on stores and payments”.
“By giving special 15 per cent terms to select robber barons like Amazon, and now also to small indies, Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30 per cent tax on most in-app purchases,” Epic Games CEO Tim Sweeney said at the time.
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