Google vs Fortnite: Sundar Pichai defends 30% cut on Play Store app sales
App developers have demanded Google to reduce the tax slab. Sundar Pichai, however, says Google will not change its 30% cut on Play Store app sales.
Despite hue and cry from developers around the world, Google is not going to reduce its cut on the app sales from its Play Store.
At Alphabet's earnings call with investors, Google CEO Sundar Pichai said that the company has no plans to alter the 30-70 split between Google and developers.
Responding to a question, Pichai said, "Thousands 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 the overall experience is safe and results in high engagement for the developers back."
"So, I think there's a value exchange there. And it's been the industry standard. And so, I think we'll continue down that path but obviously, always adapt to where the market is," he added.
Google's 30% cut on app sales has received criticism from the developers community. Just last year developers of the popular viral game Fortnite decided to skip the Play Store altogether to escape Google's tax.
CEO of Epic Games Tim Sweeny blamed the "economics of the store ecosystem" for skipping the Play Store.
"There's typically a 30/70 split, and from the 70%, the developer pays all the costs of developing the game, operating it, marketing it, acquiring users and everything else. For most developers that eats up the majority of their revenue. We're trying to make our software available to users in as economically efficient a way as possible. That means distributing the software directly to them, taking payment through Mastercard, Visa, Paypal, and other options, and not having a store take 30 %," he had said.
Just like Google, Apple has also received demands to reduce its cut on apps and in-app sales on App Store. For instance, Netflix has blocked new users from signing up for the application via Apple's App Store.
Apple also takes about 30% cut from developers. Apple's share, however, reduces to 15% after customer makes recurring payment to the application for a minimum of one year.