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Amazon Reduces App Store Revenue Drop for Smaller Developers

Amazon has joined rivals Google and Apple by offering smaller developers in the App Store a more favorable loss of revenue.

As of October 2021, developers who earned less than $1 million (£700,000) in revenue in the previous calendar year will receive an 80 percent share of sales by default, compared to 30 percent previously.

The move echoes Apple’s App Store, which announced a similar change in November, followed by Google in March.

Those stores offered a slightly preferential cut of 85 percent of the revenue that went directly to the developer. However, Amazon said it will also give eligible developers a promotional credit for Amazon Web Services in an amount equal to 10 percent of sales, so developers can move their app’s services to the cloud.

In a recent survey of mobile developers, Amazon said more than 94 percent said they use cloud services in their application development efforts. In terms of apps, Amazon is in any case a much smaller player than rivals Google and Apple, as the app store is mainly used on its Fire devices.

Unlike iOS devices, Android users can also choose to install it if they wish. Amazon’s App Store houses just over 460,000 apps, compared to over 2.2 million and 3.4 million for Apple and Google, respectively.

The recent changes in revenue distribution, first from Apple and then from its rivals, follow the lawsuit filed against Apple last year by Fortnite developer Epic Games.

Not happy with the distribution of revenue through Apple’s App Store, Epic implemented a new payment portal within Fortnite that bypassed it and offered gamers an additional 20 percent discount if purchased through it.

Apple hit back by completely removing Fortnite from its store and the popular battle royale game still hasn’t recovered to this day. Following this move, Epic immediately launched a lawsuit accusing it of unfair and anti-competitive practices.

In November, Epic said the revenue payments changes were “calculated” by Apple to divide app makers and maintain their monopoly on stores and payments.

“By giving special 15 percent terms to select robber barons like Amazon, and now little India as well, Apple hopes to remove enough critics so they can get away with their blockade of competition and a 30 percent tax on most in-app purchases.” Epic Games CEO Tim Sweeney said at the time.