It looks like Google is set to lose hundreds of millions of dollars in revenue as one of their highest-grossing apps, Tinder, is now bypassing the Google Play Store when it comes to in-app purchases. This is part of a slowly growing trend of major apps that are “revolting” against the tech giant’s sometimes 30% cut in their revenue in the app store. Google is not alone as they seem to be doing the same thing to Apple. As the app economy is expected to continuously grow, this may eventually hurt both companies.
According to a report on Bloomberg, Tinder now has a new default payment process that will allow you to enter your credit card details directly into their app. You also won’t be able to go back to Google Play for all your future IAPs since the app will remember your payment details already. This is pretty huge for Google since Tinder has been the top-grossing non-game app in the first quarter of 2019. Shares of its parent company Match Group Inc rose 5% once news got out.
There has been a growing number of major apps that are rebelling against the sometimes too huge cut that Google and Apple takes from apps. Netflix for example has stopped letting users subscribe through the App Store and Epic Games said that their hugely popular game, Fortnite, will not be distributed through Google Play. Spotify took it one step further, filing an antitrust complaint to the European Commission against Apple, saying their cut is actually a “tax on competitors” which obviously violates antitrust policies.
Tinder is actually the only one that has changed the payment method for in-app purchases as the other companies that are going against Google have instead made subscribers enter their payment information through their websites. But now that they have done this, it may actually cause other apps and games to do it as well, causing further losses to Google.
Macquarie analyst Ben Schachter says that Tinder will probably not have a massive effect yen since it’s a relatively small app. But if gaming apps start getting into that practice, then Google should start getting worried.
July 21, 2019 at 09:05PM