Apple has announced the App Store Small Business Program, which will allow App Store developers that make less than $1 million in annual sales eligible for a reduction in Apple's current commission rate. Typically, Apple takes 30% on all sales and in-app purchases, but the new policy will cut that number down to 15% for smaller developers and App manufacturers. This is a very big reduction, and one that stands to benefit a number of companies that currently sell products on the App Store! New developers are eligible for the reduced rate immediately. For existing developers, Apple will analyze the numbers for 2020 in order to decide which will qualify in January.
In a statement, Apple CEO Tim Cook discussed the new program.
"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 Cook. "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."
Smaller developers that surpass $1 million in profit will be removed from the program. However, developers can re-qualify, based on future changes. Apple's 30% commission has been a hot topic over the last few months, following a very public battle with Fortnite publisher Epic Games. In a breach of Apple's terms of service, Epic released a patch for Fortnite that allowed players on iOS platforms to avoid Apple's 30% commission on in-game purchases. After a dragged-out battle that resulted in many digs at Apple through Fortnite, the game was removed from the App Store.
Following the removal, Epic Games, Spotify and a number of other companies formed the Coalition for App Fairness, a group seeking to "fight back against the monopolist control of the app ecosystem by Apple." Epic Games likely would have been exempt from the new commission policy if the company's games were still on the App Store, but it's hard not to wonder if the App Store Small Business Program was made as a result of the pressure from Epic Games and other companies.
Regardless of the rationale for the new policy, this certainly seems like a win for smaller developers! The growth of digital marketplaces has made it difficult for developers to get their products noticed, particularly when there's so much competition. Apple's new policy should make it easier for smaller developers to turn a profit.
What do you think about the App Store Small Business Program? Do you think it will help smaller developers? Let us know in the comments or share your thoughts directly on Twitter at @Marcdachamp to talk all things gaming!