Apple app developers earning less than $1 million post-commission in annual revenue are eligible to participate in a small-business program that would slash App Store commission rates in half to 15 percent instead of the usual 30 percent as it battles Epic Games over in-app fees.
“Since the launch of the App Store, small businesses have been its driving spirit,” Apple said in a statement on Wednesday (Nov. 18). “Now more than ever, these businesses are core to the communities they serve, helping people stay healthy, connected, and learning.”
The reduced rate applies to all paid app revenue and in-app purchases. Apple estimates that “a vast majority” of its 28 million-plus registered app makers are qualified for the new program.
“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 CEO Tim Cook said in announcing the new program.
Adam Oxner, co-founder and chief technology officer of MySwimPro, said that Apple’s new program will help the app’s bottom line and leave more revenue for research and development “to help make the app better.”
Applications for Apple’s small business program will be available as of Jan. 1, when eligibility requirements and deadlines will also be announced.
“This is a super awesome opportunity for the indie studios that don’t want to take any risks,” said Phillip Stollenmayer, a solo developer in the App Store.
He added that the new program is the perfect chance “for the indie gaming spirit to become truly mobile.”
Apple’s recently-updated App Store guidelines indicate that game-streaming platforms like Microsoft xCloud and Google Stadia are welcome. The new guidelines also addressed payment circumvention for one-on-one classes.
However, the discount comes as Apple continues to battle Epic Games in court and in the marketplace over in-app fees. Apple kicked Epic’s popular game Fortnite off of the App Store after Epic came up with a way to allow gamers to make in-app purchases without paying Apple’s customary 30 percent commission.
The nonprofit Coalition for App Fairness — comprised of Epic and companies like Spotify and Matchgroup (owner of Tinder) — have said Apple’s fee structure is excessive. The group advocates for fair competition and freedom of choice.
Epic CEO Tim Sweeney dismissed Wednesday’s price cut for small developers as “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 percent terms to [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 percent tax on most in-app purchases,” Sweeney said in a statement. “But consumers will still pay inflated prices marked up by the Apple tax.”
(This article has been updated with the Epic Games CEO’s comments.)
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