China Post Securities: Alphabet Inc. Class C (GOOGL.US) officially announced a reduction in the commission rate for Google Play. Focus on high-quality overseas game developers.

China Post Securities released a research report that Alphabet Inc. Class C (GOOGL.US) announced a major change to the Google Play store, including opening up third-party payments and app store integration, and reducing the service fee from 30% to 20% or lower. This adjustment brings significant benefits to overseas game developers, as medium to heavy mobile games relying on in-game purchases will benefit from the decrease in fees, leading to potential profit margin improvement. The introduction of third-party payment systems enhances developer autonomy, while the compliance of third-party stores reduces the user installation threshold, driving the revaluation of platforms such as TapTap. Main points of China Post Securities: Event On March 4th local time, Alphabet Inc. Class C announced a major change to the Google Play store: opening up third-party payments and third-party app stores, and splitting the commission logic from the original fixed ratio to "settling fee + service fee", with no need to pay a fixed settlement fee of 5% through third-party channels. The service fee commission is reduced from 30% to 20% or lower. New user installation IAP service fees are reduced to 20%, those joining the upgrade plan reduced to 15%, and the subscription service fee reduced to 10%. Additionally, if using Alphabet Inc. Class C official payments, a 5% settlement fee will also be charged. High-quality overseas game developers are granted a major advantage, with the potential to increase profit margins and gain greater autonomy Thanks to the stable performance of mature products and successful launches of new products, China's self-developed game overseas revenue has maintained steady growth. According to the Game Committee, in 2025, Chinas self-developed game revenue in overseas markets will reach $20.455 billion, exceeding one hundred billion yuan for six consecutive years. China Post Securities believes that the reduction in commission rates by Alphabet Inc. Class C will bring the following changes to overseas game developers: 1) Pressure on IAP commissions will decrease, and developer profit margins are expected to increase, stimulating game supply in the market. Under the traditional Google Play model, a large portion of game IAP revenue needs to bear about 30% of channel distribution. After the new policy is implemented, standard IAP service fees are reduced to 20% or lower. Therefore, overseas manufacturers of medium to heavy mobile games (SLG, RPG, card games, etc.) that rely on IAP revenue will significantly benefit. For example, Zhejiang Century Huatong Group, with its game "Whiteout Survival" accumulating over a billion downloads globally, has been the top Chinese mobile game in overseas revenue for over ten months, allowing high-revenue heavy games to achieve more profit conversion, providing the motivation for game upgrades and new product supply in the future. 2) Payment system upgrade, developers can recharge through the offic...