Just before Thanksgiving, Apple made the big move to cut its App Store commission for all developers earning under $1 million annually from 30% to 15%. We expected that would account for the vast majority of devs and now a new report says that is indeed the case with just 2% of Apple developers allegedly earning more than seven figures a year. Another interesting finding is that most of the developers earning more than $1 million earn less than $2.5 million. Read on for the full report.
The majority of the developer community celebrated when Apple announced the commission cut to 15%. But naturally, Spotify, Epic, and Basecamp shared frustration about the change as they aren’t eligible for the lower rate.
My colleague Ben Lovejoy noted that the move from Apple was smart as it relieves Apple from the antitrust scrutiny of App Store commissions hurting small businesses and he estimated 99% of developers would be seeing the 15% commission.
A report from appfigures today matches up with Ben’s prediction, at least when looking at 2019 numbers:
Apple just made more than 98% of its developers 50% happier. Hot off of its fight with Fortnite maker Epic, Apple has announced a new program aimed at lowering the App Store fee for what Apple calls “Small Businesses.”
appfigures says that pretty much “everyone is a ‘small business,’” and that under 2% earned more than $1 million in 2019.
No surprise here but games make up the majority of $1M+ producing apps, here’s how the other categories break down:
Another interesting statistic is that almost 40% of developers who do earn over $1M earn less than $2.5M. That does highlight how much of a difference it would make if Apple allowed the first $1 million of revenue to be at 15% for all devs instead of just those making under the million mark. And these successful but likely not huge developers seem to be in the toughest spot.
Another not surprising but interesting finding was related to how total App Store revenue breaks down with 1.5% of the top 2% creating almost 30% of it.
Revenue, however, is a whole other ball game. The smallest group—developers making more than $150M (just 1.5% of the $1M+ club)—is responsible for more 29% of the group’s revenue.
The big developers were never going to be happy with a solution like this, however, those earning between $1-2.5 million are in the trickiest spot as they just miss out on the commission savings
But like we previously mentioned, appfigures echoes that Apple’s move has been a win-win in that it was able to make the vast majority of developers happy and significantly reduce its own antitrust concerns.
Check out the full report from appfigures here.