Effective fee cut seen at about 5 percentage points, raising questions over savings and pressure on Apple to respond
Google Play Store application icon (123rf)
Google’s move to lower its long-standing 30 percent app market commission is raising expectations among Korean game developers, although doubts are growing over how much of a reduction will actually materialize.
Earlier in March, Google unveiled a revised fee structure for its Play Store on a developer blog, outlining changes to its in-app payment commission model.
Under the new scheme, the company splits the commission into a 20 percent service fee and a 5 percent payment processing fee. Previously, a flat 30 percent rate applied to annual revenue exceeding $1 million.
The change appears significant at first glance. The headline rate drops by 10 percentage points. However, the actual impact is more limited.
Subscription services will continue to carry a 15 percent fee in the US, UK and EU. In other markets, including Korea, the rate is set at 10 percent, with an additional market-based payment fee applied. The rollout is scheduled to begin in June in major Western markets, followed by Korea and Japan by Dec. 31.
The announcement initially fueled optimism in the local gaming industry, where developers have long called for lower platform fees.
Criticism came almost immediately. The Citizens’ Coalition for Economic Justice said the revision amounts to “a deceptive measure designed to evade responsibility for excessive profits accumulated over the past 15 years.”
Six gaming-related organizations — including the Korean Game User Association, Korean Game Consumer Society, Game Developers Guild of Korea, Korea Game Distribution Association, Korea AI Game Association and Korea Game Developer Association — joined the statement.
Their argument centers on how the new structure is presented. While the headline suggests a reduction from 30 percent to 20 percent, the previously included 5 percent payment fee has effectively been separated and reintroduced. In practical terms, developers still face a total burden of around 25 percent.
The actual reduction, therefore, amounts to roughly 5 percentage points — about half of what the headline figure implies.
The concerns extend beyond the core commission structure. Subscription pricing, for one, remains unclear in terms of real benefit. While the nominal rate appears to fall from 15 percent to 10 percent in markets such as Korea, additional payment processing charges could offset the reduction. In some cases, total fees could remain unchanged or even increase.
External payment systems present a more pronounced issue. Google’s brokerage fee of 26–27 percent remains in place in Korea. When combined with payment gateway fees of 5–10 percent, total costs can reach between 31 percent and 37 percent.
This widens the gap with in-app payments. Previously, the difference ranged from 1 to 7 percentage points. Under the new structure, it expands to as much as 6 to 13 percentage points.
Despite the criticism, some industry experts see the move as part of a broader and largely unavoidable shift.
Kim Jung-tae, a professor at Dongyang University’s School of Game, said platform operators are facing growing pressure to lower fees, particularly as initial infrastructure investments have already been recouped.
“Given the maturity of the ecosystem, commission rates will inevitably decline. In the long term, they should fall below 10 percent,” he said.
According to the Korea Association of Game Industry, domestic game companies paid an estimated 9 trillion won ($5.97 billion) in in-app purchase commissions to Google and Apple between 2020 and 2023.
Attention is now shifting to Apple, as the broader implications of Google’s move come into focus.
Nam Hyo-ji, an analyst at SK Securities, said Apple is likely to face similar pressure to adjust its own fee structure, potentially amplifying the impact across the industry.
“Companies like Netmarble, which generate a large portion of revenue from mobile and overseas markets, particularly in North America and Europe, stand to benefit the most,” she said.
Lim Hee-seok, an analyst at Mirae Asset Securities, added that any coordinated reduction in platform fees could significantly improve profitability across the sector.
“A reduction in app store fees alone could raise operating margins by around 7 percentage points. If platform fees decline across the board, the increase could reach 10 percentage points,” he said.
By Jie Ye-eun (yeeun@heraldcorp.com)