Apple has announced the App Store Small Business Program, under which all small software and game developers will pay companies 15% commission instead of 30%.
Developers can qualify for the program and a halved 15% commission if they earned less than $1 million in revenue from paid apps and in-app purchases during the previous calendar year.
The App Store Small Business Program will officially launch on January 1, 2021.
Apple promises to announce the details of participation in the program this December, but some details are already known:
- Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.
- If a participating developer surpasses the $1 million thresholds, the standard commission rate will apply for the rest of the year.
- If a developer's business falls below the $1 million thresholds in a future calendar year, they can requalify for the 15% commission the year after.
"Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We're launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love," said Apple CEO Tim Cook in a statement. "The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people's lives."
Apple recalled that app and game developers' potential audience is represented by 1,5 billion Apple devices in 175 countries worldwide, used in 40 languages, and paid for purchases by 180 local payment methods in 45 currencies. Only in 2019, the App Store ecosystem generated $519 billion, while 85% came from third-party developers. Launched in 2008, the App Store currently offers 1,8 million diverse apps and games, with half a billion visitors per week.
The decrease in commission from 30% to 15% happened due to the recent conflict between Apple and Epic Games. Still, Epic Games will not receive any benefit since it earns more than $1 million per year.
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Fortnite developers have already reviewed Apple's decision, and they are not impressed.
"This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally. By giving special 15% 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% tax on most in-app purchases," said Epic Games CEO Tim Sweeney.
Also, Sweeney added that Android and iOS platforms need to open up to competition for payments to level the playing field among developers and service providers.
