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Google reportedly seeking to shift higher portion of Play Store revenue to itself

Posted In News - By AndroidPress on Saturday, June 29th, 2013 With No Comments »

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Two analysts with firm Macquarie have told Business Insider that Google is looking to increase its revenue from Play Store sales by altering the percentage that goes to carriers, and the percentage that it retains for itself. Google hasn’t commented on the rumor, but according to the analysts, developers’ income won’t be affected.

The two analysts are Ben Schachter and Eugene Jung, the latter of which told Business Insider that Google is seeking to increase its revenue from the Play Store inside South Korea, while Schachter went on to explain that he thinks this is happening outside of the nation, as well. Unfortunately, not much more was told about the matter, such as what has led to their conclusion.

Under the current arrangement, developers earn the majority of the revenue from the sales of their Android apps, receiving 70-percent. The remaining 30-percent is split two ways: 25-percent goes to the carrier, while the remaining 5-percent was retained by Google. It is the 30-percent that doesn’t go to the developer that Google wants to change.

According to Jung, Google wants to bump its share up from 5-percent thrice that at 15-percent, splitting the 30-percent 50/50 with the carrier. To put this in perspective, the analysts say that – based on data from an analyst firm called Distimo – the Play Store raked in $350 million in revenue in May. Of that revenue, by receiving 5-percent, Google would have made $17.5 million.

Under the rumored changes, based on that same revenue figure, Google would instead make $52.5 million, quite a substantial jump. Reportedly, the changes will have to be hashed out with the carriers, who would see a 10-percent drop in their share of the funds. Should the change be successful, however, the analysts say Google could make $500 million next year.

SOURCE: Business Insider

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