Google Play Business Model | How much does Google Play make?

PV Vyshnavi PV Vyshnavi
Sep 1, 2021 6 min read
Google Play Business Model | How much does Google Play make?

Google is one of the acclaimed multinational conglomerates in the world, as it runs multiple businesses under a single brand. Its most successful business sector is Google Play which was also known as Android Market, the platform is one of the top digital distribution services and is a brainchild of Google.

Google play was initially launched in October 2008 and then re-launched in March 2012 after combining the Android market and Google together. Google Play is the official app store for every device that runs on an android operating system. The platform allows users to search and download apps that are designed and developed for android devices.

It also acts as a digital media store that offers music, e-books, movies and TV programs. The apps can be downloaded directly from Google play, while the platform allows its app developers to make apps that are free and charge a fee. The platform had over 82 billion app downloads just in 2016 and had over 3.5 million Android applications available in 2017.

The Services of Google Play
Google Play Business Model
How does Google Play make money?
How much does Google Play Make?
The lawsuit against Google Play Store
Frequently Asked Questions

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The Services of Google Play

Some of the main services that Google Play offers are:

  • Google Play Games – Google play games were launched in 2013, and since then it has been an online gaming service for Android devices.
  • Google Playbooks – Google playbooks is one of the leading e-book distribution services as it is available in 75 countries. It currently has more than five million eBooks available for purchase and offers the user an option of uploading over 1000 of their own eBooks in the form of PDFs.
  • Google TV – This is the Video-on-demand platform of Google that offers a wide range of movies and TV shows that can be purchased or rented. The platform was earlier known as Google Play Movies & TV and has it movies being available in 110 countries while its TV shows are available only in a select few countries.
  • Google Play Pass – This platform was launched in 2019 and is a games and app subscriptions services that are available only in America. Google Play Pass is invitation-only for app developers.
  • Google Play Music – This app allows its user to listen to and download music. Currently, the app has over 15 million subscribers.
Google Play logo
Google Play logo

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Google Play Business Model

According to Google Play, the app developers receives over 70% of the app price, while the other 30% goes to Google Play as they are the distribution partner and as a part of operating fees. The platform also allows the developers to make sales on their app, on the basis that it informs its users when the sales end. The application developers can also release an early version of their app to a certain group of users or even allow their users to pre-order the apps before they are released.

For regular subscription-based payments, it charges 30% for the first-year subscription consumer pays and then the app developers can continue paying 15% from all subsequent years. This model is similar to the business model of another app store like the Apple app store. Where the app developers pay some money to the app store in order to hoist their app and get the remaining amount of money from their user purchases.

A Google Play advertisement

How does Google Play make money?

There are two main ways Google Play makes money

  • Advertisements – Google allows its users to promote apps on its platform by using certain keywords that are shortlisted by the app developers. So when a user is searching for a certain keyword they can get your app listed on the top.
  • In-App Purchases – The main way Google Play makes money is when a user buys certain in-app services or products Google gets a percentage of it as commission. As said above the Google Play commission are usually over 30%, while the developer gets 70% of the cut.

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How much does Google Play Make?

On 30th August 2021, the platform disclosed the revenue of the platform for the first in 13 years. According to the declassified documents of Google play store, the total revenue of the platform is over $11.2 billion (Rs. 82,000 crores) in 2019. This amount is said to include the price of the app (which it charges 30% of), additional in-app purchases and revenue generated via advertisements on the Play Store app.

This information was disclosed because of an antitrust lawsuit that was filed against Google Play store by several districts and states in America claiming that Google Play Store exercises a monopoly over application distribution. Out of the $11.2 billion total revenue, over $8.5 billion is the gross profit of the app, while the operating income of the google play store is $7 billion.

The lawsuit against Google Play Store

The case was filed by attorney generals from 37 states and districts of America because they taught that the platform was cutting down the profits of app developers and taking a huge commission on sales. The lawsuit also says that Google is using illicit measures in order to maintain its monopoly.

The next trial is expected to be in late 2022. According to Google, however, this case is nothing but a meritless lawsuit and said that the data mischaracterizes its business. Google also has other lawsuit filed against it by Epic Games, who are the creator of a popular game known as Fortnite.

Epic Games along with other app developers are separately suing Google because they think that the platform is taking over 30% of the fee for every digital good sold as in-app purchases and generating huge amounts of profits. According to Epic Games, the company came up with a Premier Device Program through which it offered a share of Google Play Earnings to other big companies like LG and Motorola.

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Frequently Asked Questions

What is Google Play Store?

Google Play which was also known as Android Market, the platform is one of the top digital distribution services and is a brainchild of Google.

What are the services of Google Play?

The services of Google Play are Google play games, Google Playbooks, Google TV, Google Play Pass, and Google Play Music.

How much does Google play earn?

According to the declassified documents of Google play store, the total revenue of the platform is over $11.2 billion (Rs. 82,000 crores) in 2019.

How does Google Play make money?

The two main ways Google Play makes money are through Advertisements and in-app purchases.

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