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Google up for the challenge posed by Fortnite, won't reduce its revenue split with developers: Sundar Pichai

Sundar Pichai feels that the present rate is industry standard.

  • Published: February 5, 2019 6:00 PM IST
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Google has recently come under fire for the fact that it charges a large portion of the profits made by the developers of apps and games on the Play Store. This came under the scanner more prominently because Epic Games which developed the popular multiplayer game Fortnite released the game on Android by hosting the APK file on its own website and not the Google Play store. Reports pointed to the fact that Epic Games wanted to avoid the exorbitant cut of 30 percent that Google charges from the developers.

“The 30 percent store tax is a high cost in a world where game developers’ 70 percent must cover all the cost of developing, operating, and supporting their games,” Epic Games founder and CEO Tim Sweeney told Business Insider in August of last year. “On open platforms, 30 percent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service”

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Analysts estimated that Google lost an approximated $50 million in revenue with Fortnite not being hosted on Google Play Store. And now in an earnings call with investors, Google CEO Sundar Pichai has specifically said that the company will be sticking to present plan of revenue split of 30 percent on all app sale and in-game purchases. He referred to the fact that Apple has charges the same ratio and said, “I think there’s a value exchange there and it’s been the industry standard.”

But looking at the Epic Games which is already planning to take on Steam, which is a PC game platform giant which also happens to split profits in the 30/70 ratio, Google may have to rethink plans in future. Epic Games has launched its own PC game hosting platform called Epic Games Store which is charging the developers only 12 percent instead of the 30 from Steam. But Sundar Pichai didn’t put anything down in stone and commented on the future of the financial structure and said, “We’ll continue down that path, but obviously we always adapt to where the market is.”

  • Published Date: February 5, 2019 6:00 PM IST