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Google made $8.5 billion in gross profit off the Play app store in 2019

A court filing that was unsealed on Saturday shows that Alphabet Inc’s Google Play store generated $11.2 billion in revenue — and $8.5 billion in gross profit — from app sales, in-app purchases, and app store ads over the course of 2019. The story, initially broken by Paresh Dave at Reuters, is a rare glimpse into the actual numbers behind Google’s app store.

Typically, Google will group up the Play store’s financial results with some other service in its earnings report, which effectively obfuscates the store’s numbers. For example, Play is not mentioned by name at all in Google’s numbers for the second quarter of 2021. This isn’t illegal or even particularly unusual for a tech company, but it also means there hasn’t been any reliable way for anyone outside Google itself to get an idea of just how lucrative the Play Store actually is until now.

Like a lot of similar revelations this year, the information has come out due to a lawsuit. Google is currently under fire from a group of 37 attorneys general, who represent 36 U.S. states and the District of Columbia, that filed suit against Google on July 7. Letitia James, the attorney general for New York, leads the coalition in accusing Google of “illegal and anticompetitive conduct that has sought to maintain the company’s monopoly power in the mobile app distribution and in-app payment processing markets.”

Google Play generated $11.2 billion in revenue, with $8.5 billion in gross profit and $7 billion in operating income, with an operating margin of over 62%.

(This suit, typically abbreviated to Utah v. Google in official documents, is separate from the December 2020 antitrust suit that alleges Google has engaged in illegal and anticompetitive behavior in order to stay on top of the search engine business.)

Much like the Epic Games v. Apple suit, a side effect of Utah v. Google has been the inadvertent divulging of various interesting data points that would have ordinarily stayed hidden, such as the Play store’s cash flow.

The AGs’ newly unredacted filing claims that Google Play generated $11.2 billion in revenue, with $8.5 billion in gross profit and $7 billion in operating income, with an operating margin of over 62%. The numbers are cited to back up an accusation by the states that Google’s 30% cut of the fee for every digital item sold in an app is arbitrarily high and inconsistently applied, as Google has allegedly manipulated those terms in order to keep major developers like Riot from leaving or working outside of the Play store.

For the casual observer, though, the interesting thing about lawsuits like this one is what ends up getting revealed during the litigation process. Epic v. Apple was a news bonanza, featuring some surprisingly revelatory details about not just Fortnite, but other companies like Sony and Microsoft. By digging into Google’s financials, Utah v. Google has the potential to reveal even more insider information about one of the biggest tech companies in the modern world.

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