XD Challenges Apple, Google with Zero-Commission Game Store

A gaming company backed by Alibaba, TikTok owner ByteDance, and streaming giant Bilibili, is seeking to push into Apple’s and Google’s territory with a unique business model.

XD, owner of game store TapTap, doesn’t charge game developers a fee on in-app purchases. Instead, the company relies on advertising for its revenue.

The business model sets XD in stark contrast to other major app stores.

• Apple: 30% commission, or 15% for developers with under $1 million in yearly revenue.
• Google: 15% for the first $1 million in annual revenue, and 30% thereafter.
• Tencent: up to 50% commission.

XD is looking to expand globally after revenues dropped 4.3% in the first half of 2021. The company took a $49.9 million loss in that period as popular games matured and pandemic restrictions eased.

Earlier this year, developers flocked to XD following a dispute between Huawei and Tencent, causing its stock price to double from mid-January to mid-February. However, the market has since cooled on the company, which is down nearly 30% since the start of the year.

On Tuesday, the South Korean parliament passed a law blocking app stores from preventing alternate in-app payment systems that dodge commission fees.