Apple reducing App Store cut to 15% for developers earning less than $1 million per year
Apple has announced the App Store Small Business Program, a new program for developers which aims to "accelerate innovation" by allowing them to keep more of the money made from sales on the App Store.
In a post on the official Apple Newsroom, Apple describes that all paid apps and in-app purchases from the Apple App Store will only be subject to a 15% revenue cut from Apple if they've earned $1 million USD or less.
Apple specifically stated the following changes to its App Store revenue sharing practices:
• 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 threshold, the standard commission rate will apply for the remainder of the year.
• If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.
This move comes after recent controversy and litigation by Epic Games concerning the 30% revenue cut taken by Apple in its popular Fortnite Battle Royale game. This, however, will not change Apple's policy towards Epic or other big software developers and publishers that make over $1 million in revenue from App Store downloads and in-app purchases on devices running iOS or macOS.
The new App Store revenue guidelines will go into effect on January 1st, 2021.