Google to add more real-money game apps on Play, charge a service fee

Google has announced plans to allow more real-money gaming (RMG) apps, including those not covered under a licensing framework, on its Play Store (aka Google Play) in India, Mexico, and Brazil this year. The technology giant will also charge a service fee for these apps.

“Based on the learnings from the pilots and positive feedback from users and developers, Google Play will begin supporting more RMG apps this year, including game types and operators not covered by an existing licensing framework,” the company said on Friday.

The “expanded RMG support” will be launched in June for developers in India, Mexico, and Brazil, with plans to extend the service to more countries later.

Google is also planning to roll out a service fee model for subscription and in-app purchases for real money games. While the company did not disclose the details of the new fee, it currently charges a service fee of 15-30 per cent on in-app purchases and app sales made through Google Play. However, Google says that the service fee is applicable when a developer sells digital goods or services in their app. "Today, only 3 per cent of developers in India sell digital goods or services and therefore would need to pay a service fee. For the vast majority of developers, our fees are 15 per cent or less — the lowest rates of any major app store — due to the range of pricing programs Google Play offers.”

This development comes at a time when Indian RMG firms are grappling with a 28 per cent blanket tax on online gaming. Previously, skill gaming platforms paid an 18 per cent GST on platform fees, also known as gross gaming revenue (GGR). The new rules, which came into effect from October 1, do not distinguish between games of skill or chance.

In 2022, Google launched a pilot programme enabling the distribution of daily fantasy sports (DFS) and rummy apps to users in India. This programme ended on September 28, 2023. It provided a grace period for existing pilot apps to remain on Google Play until January 15, 2024, which has now been extended to June 30, 2024, when the new policy will take effect.

After the grace period, developers will be able to distribute RMG apps on Google Play to users in India, beyond DFS and rummy, in compliance with local laws and the company’s updated policy.

Google Play’s existing developer policies supporting user safety, such as age-gating to limit RMG experiences to adults and geo-gating to offer RMG apps only where legal, will remain unchanged. Google Play will also continue its expanded developer verification mechanisms, the company said.

Industry stakeholders welcomed Google’s latest move, saying it will allow budding Indian game developers to compete with established gaming companies. Roland Landers, CEO of the All India Gaming Federation, said: “As the representative body of online gaming in India, we welcome this progressive decision by Google to allow all pay-to-play skill games on Play Store. We have been advocating for the same and believe that this will give a big boost to the Indian online gaming industry, where over 70 per cent of the revenue is generated by pay-to-play platforms.”

He further said the decision will promote “responsible innovation” and help MSMEs and new developers compete with established companies by significantly reducing user acquisition and other associated costs.

As of FY23, the RMG segment holds an 84 per cent market share in the online gaming industry. This is expected to decrease to 75 per cent by FY28 due to the new tax regime, according to a report by consulting firm EY. The RMG category is projected to generate Rs 6,500-6,800 crore in direct taxes, and Rs 75,000-76,000 crore in indirect taxes by FY28.

Cashing in

Firm will also roll out a service fee model for subscription and in-app purchases for real money games
It has extended the grace period for its RMG pilot program until June 30, 2024
After this, developers can distribute RMG apps on Google Play to users in India
Existing developer policies supporting user safety will remain unchanged
This comes while RMG firms are reeling from a 28% blanket tax on online gaming

Credit: Business Standard