Apple announced a new program to take away part of the hefty commissions for small businesses earning up to $1 million per year.
The App Store Small Business Program will launch on January 1, 2021, and will serve as an incentive for independent developers and aspiring entrepreneurs who will have more resources to invest in and grow their businesses.
“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love,” said Tim Cook, Apple’s CEO.
“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.”
- 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.
As reported by Gamesindustry.biz, the mobile tracking firm Sensor Tower added more context to the App Store Small Business Program. The firm reveals that 97.5% of the tracked publishers generated less than $1 million on the App Store in 2020, those collectively accounted for just 4.9% of the App Store total revenues.
Certainly, the new incentive seems to be linked to a recent legal dispute between Apple and Epic Games, where the Cupertino giant tried to remove the Unreal Engine from the Apple ecosystem potentially leaving thousands of indie developers out of business
Apple’s Tim Cook and Epic’s Tim Sweeney are now on the court due to the 30% of each V-Buck sold in Fortnite on iOS devices. Sweeney reduced the price of all V-Bucks ahead of the new season of the battle royale game. However, the only way to do so was to bypass the App Store and take away Apple’s commission.
Apple reportedly filed a lawsuit in which they accuse Epic of committing theft, and has banned Fortnite from the iOS. Epic Games and NVIDIA GeForce NOW will return Fortnite to iOS via cloud streaming on web browsers.