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<Research>G Sachs: Lower Commissions on Mainland App Store and Google Play Boon to Game Publishers' Profits and Overseas Expansion
Apple (AAPL.US) announced last week a reduction in commission rates for the App Store in Mainland China, Goldman Sachs research report noted. Google (GOOG.US) also announced in ear...
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<Research>G Sachs: Lower Commissions on Mainland App Store and Google Play Boon to Game Publishers' Profits and Overseas Expansion
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Apple (AAPL.US)      announced last week a reduction in commission rates for the App Store in Mainland China, Goldman Sachs research report noted. Google (GOOG.US)      also announced in early March that the in-app purchase commission rate for the Google Play Store would be cut from 30% to 20% or lower, and third-party payments would be allowed, enabling developers to use billing systems outside of Google's own.

Goldman Sachs believed that the reduction in commission rates by these two companies will lower channel costs for mobile game developers/ publishers, help magnify their profits, and allow for cost savings to ramp up R&D investment. This provides a longer development cycle for startups/ SMEs, promotes industry development, and incubates more innovative products.

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Goldman Sachs also estimated that the reduction in commission rates by Apple and the Google Play Store could lead to a 1.9% and 2.5% hike in total operating profit for TENCENT (00700.HK)  -7.400 (-1.490%)    Short selling $1.08B; Ratio 47.391%   and NTES-S (09999.HK)  -1.300 (-0.738%)    Short selling $244.93M; Ratio 79.905%   (NTES.US)      , respectively. It could boost total operating profit for BILIBILI-W (09626.HK)  -4.100 (-2.245%)    Short selling $91.44M; Ratio 46.716%   (BILI.US)      and XD INC (02400.HK)  -3.400 (-5.292%)    Short selling $36.50M; Ratio 41.629%   by 4% and 7%. In fact, considering the companies' investment/ promotion strategies, Goldman Sachs viewed that the impact will be more dynamic.

The broker added that the Google Play Store's initiative could pave the way for domestic companies' overseas expansion. More importantly, Apple's move may have a demonstration effect and serve as a significant leverage for game developers to pressure domestic Android channels to undergo similar reforms. If domestic Android channels follow Apple's lead in lowering commission rates, the broker believed that there is further room for improvement in the profitability of game publishers/ developers.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)


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