(Yicai) Sept. 9 -- Tencent Holdings is still in negotiations with Apple over revenue sharing from mini apps on WeChat, people familiar with the matter told Yicai.

Tencent and Apple are conducting “sensible negotiations” over the issue, one of the sources said. “The core of the negotiations remains how to collect the Apple tax.”

Chinese app developers are required to pay Apple a commission of as much as 30 percent on transactions through the App Store, which is known as the “Apple tax” and is the highest rate globally.

Apple has pressured Tencent and ByteDance, two of China's internet giants, to close loopholes that allow in-app payments that avoid the “tax.” Apple warned that it would decline to provide updates for WeChat on its iOS if developers and users are still allowed to bypass the commission.

Shenzhen-based Tencent resumed WeChat updates on Apple's iOS at the end of last week, following a two-month hiatus, debunking rumors that said the new iPhone 16 would not be compatible with China's largest social media platform. The handset will be unveiled today at Apple’s biggest event of the year.

In China, Apple gets a slice from payments such as top-ups by game players. For apps with less than USD1 million in revenue, the commission falls to 15 percent. 

In the first half, revenue from mobile games in the form of mini apps was CNY16.6 billion (USD2.3 billion) in China, up 60.5 percent from a year earlier, official data showed. Actual sales income generated by in-game purchases surged almost 82 percent to CNY9.1 billion (USD1.3 billion).

There are roughly 300,000 developers of WeChat mini games, and over 80 percent are small operations with less than 30 staff, the people told Yicai, adding that the overall profitability of these mini games is just 12 percent, and so the “Apple tax” puts the survival of these firms in doubt.

Through the negotiations, Tencent hopes to form a commercial ecosystem with a virtuous circle that enables the developers' survival, the insiders said.

Apple has cut its commission rates in some overseas areas recently. In January, the California-based firm said iOS apps distributed via the App Store in the European Union will carry a commission of 10 percent or 17 percent.

Editors: Shi Yi, Tom Litting