'Jagirdari' 30% tax: Indian gaming CEOs call out Google for Play Store payment rules

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'Jagirdari' 30% tax: Indian gaming CEOs call out Google for Play Store payment rules

Gadgets Now Bureau / Updated: Apr 25, 2023, 08:33AM IST

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'Jagirdari' 30% tax: Indian gaming CEOs call out Google for Play Store payment rules

Google has been entangled in various antitrust cases in several countries, including in India. One of those cases is regarding the 30% cut that Google takes for in-app purchases, from developers. Now, leading gaming platform CEOs have dubbed the cut as an 'extortionist' 30% tax.

What is 30% tax
Historically, Google has mandated that customers make every transaction for in-app purchases through their payment systems available on the Play Store. The company then takes the 30% commission fee on the transaction. So if a person purchases Rs 100 worth of currency in a game, Rs 70 will be passed on to the developer.

Apple also takes up to 30% cut on in-app purchases and it is infamous as “Apple tax.”

Here’s what gaming CEOs have to say
Sai Srinivas, co-founder and CEO, Mobile Premier League (MPL), said that the 30% commission may be viable in advanced markets like the US, but for India, it is crucial to ensure that Indian game developers receive more revenue to invest in game development and build more games.

"My view is that we should provide Indian game developers with more revenue to invest in game development and build more games," Srinivas said at a panel discussion held at 'Consilience 2023', organised by the Law and Technology Society (L-Tech) at National Law School of India University (NLSIU) in partnership with All India Game Developers' Forum (AIGDF).

For Manish Agarwal, co-founder, IndiGG, the 30% commission on gaming apps is unfair.

"The 30% 'jagirdari' tax is an extortion and I believe in India we should not allow anybody to do this, especially when you're not an Indian company," he said.

Anuj Tandon, CEO - Gaming, JetSynthesys, said that the 30% fee was revolutionary compared to the 70% charged by OEMs or Telcos for game developers “when app stores and play stores were launched.”

“At that time, it was a very good idea, but as the industry and business models have evolved, there needs to be a relook at the rates,” he added.

Sean Hyunil Sohn, CEO, Krafton Inc. India, also called for proper intervention by the government and encouraged the development of competition from third-party stores, supported by consumers.

Alternate payment mode
Last year in September, Google announced that it will expand the user choice billing program for the Play Store to multiple countries, including India, Australia, Indonesia, Japan and the European Economic Area. This new system will enable users to choose alternative payment systems for in-app purchases on the Play Store.

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