Apple rumored to be eyeing video game market - Page 3

Not really the same thing at all, but hey, interesting comparison.

Forbes estimates that MS lost 4 billion on Xbox at least, and they seem to know money. Why even bother to dispute this? Even Microsoft has admitted that in the short term they were going to take a bath... though maybe they didn't count on the water being quite that deep. \


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Repeat after me, "Apple is a hardware company; Microsoft is a software company". From that basis you can determine their respective strategies.

The Xbox 360 may be a break even device now and will soon start making money if it hasn't already, but it definitely lost billions initially. Those losses are offset by Xbox live subscriptions and the profit from all the game companies they own. Hardware developed to drive software sales and recurring revenue from subscriptions: a software centric approach.

Apple doesn't develop hardware they can't turn a good profit on. On the other side of the equation they probably lose money at first on new software like iLife because most of the first year sales are free copies bundled with new hardware. The iTunes Music Store exists because Apple wanted a way to drive iPod sales and keep iPod owners from switching to other devices. The store itself only makes enough money to cover ongoing development and the enormous bandwidth costs. Software developed to drive hardware sales, the complete opposite of the Microsoft approach.

If Apple develops games it will be to drive sales of a hardware device that they can sell at a healthy profit. Leopards don't change their spots.

'Profit from all the game companies they own'?? Not yet. They still have to pay off the cost of acquiring the game companies they own. They paid something like $400 million for Rare alone. \


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Has Microsoft made any money from xbox? I heard they sold/sell both consoles at a loss.

The closest thing Apple will do to gaming is supplying a controller for use when iTV is on.

-=|Mgkwho

I think the point I was trying to make is that with financials you never really know what you have unless you and working the numbers yourself. We don't have SoX compliance because companies have proven to be honest about financial records.

The question really is what's the downside for Apple and what's the upside

The question for Apple is how they can leverage their hardwqare without having to come out with a totally dedicated unit. I think they can do that.

Hon Hai

People act as if Apple doesn't have one hell of a supply chain. Microsoft makes input devices. Apple makes whole computers. It's far less of a stretch to think of Apple delivering a good hardware platform than Microsoft.

Let's be honest...if you had $299.98 burning a hole in your pocket and need to get the most for your money are you likely to buy the iTV or the Xbox 360?

It would depend on what you do for entertainment. Either choice is reasonable.

I don't play games on my computer, or on a console. But, I do play games on my Treo 700p.

My daughter, however, who is 15, and her friends, play games on several consoles, as well as their computers, AND the DS.

If Apple can stream video from a Mac to the iTV, why not stream the video from a video game? Apple could then make a game controller that hooks to the iTV and it sends the game control signals back to the Mac. The Mac does the game processing and sends the video back. Instant Apple game console with no R&D.

Apple already has games and with Boot Camp, it can even run Windows games. Everybody knows PCs make better games platforms. Upgrade the computer and you upgrade your game console. iTV could just be a link between the two, just like it would for playing tv and movies.

Not saying this is what Apple will do but they could. What Apple needs to solve first is the consumers mess when it comes to setting up HDTV and 5.1 sound. Make one set box that does everything people need for the living room with only one remote. Man, it would be huge.

Then on top of that, let the iTV stream games and you have a game console too for no extra cost. So Apple doesn't need a console. You either play games on the computer or through the iTV. Everything ties back to the Mac.

Now that's what I literally call thinking outside the box.

Plus i think this may be the wrong place to ask that question...

And what about latemcy?

I agree. More PC games is what's needed. All it needs is for Apple to buy up the likes of Aspyr and license a raft of PC games and use technology like Cider to deliver the kind of gaming experience PC users have had for years. They can even cherry-pick the best games we've missed on the Mac like Half-Life 2, Deus Ex 2, Burnout, Need For Speed.

A console needs too much R&D and dedicated developer support. Those developers will see far more profit in the established consoles and leave Apple floating. It would take too much of a loss to compete too. Intel Quad core + Geforce 8800GTX sounds good but would cost an absolute fortune. Even without a Blu-Ray drive. There's no way Apple can compete there, not with the Playstation's games catalogue.

For Apple to have a selling point, they need to offer an attractive option for gamers. Where do PCs fail? Just because Windows is crummy and games crash with bizarre Visual C++ errors and slow down eventually due to fragmentation. Where do consoles fail? You can't use a keyboard and mouse. Selling point = good games on a stable operating system and you can use a keyboard and mouse.

melgross,

About latency.

The only extra latency would be the iTV to Mac and back traffic. This depends a lot on one's network but I think this traffic could be streamlined and made fast enough. Apple has Xgrid so they know all about handling latency for other apps.

If the end user doesn't notice this latency, then Apple has a psudeo-console solution for gaming.

Japan would destroy Apple's ambitions of getting into gaming. I guarantee it. Even the iPod isn't doing anything special in terms of performance there. The DS Lite there runs circles around it dozens of times in terms of handheld gadget popularity. Winning Japan is crucial to maintaining a good presence in the gaming market, and is of particular annoyance to Microsoft.

It would be difficult for Apple to compete against Sony/MS/Nintendo. Very difficult. I think the main point of the article, though, was that Sony & MS are going to be wanting to take over the living room - and if Apple wants to play there it will be competing no matter what. (Nintendo has smaller goals).

So Apple needs something compelling there. The price is a good start - the iTV is supposed to be cheaper than the XBOX360 or PS3. They could all offer movies, podcasts, radio, TV - and for a premium cost the XBOX360 & PS3 give you games. But we all know that over time the prices come down on all products and that premium could reduce significantly over time.

It'd be nice to think we could use streaming video for games from the Mac (or PC?) - the latency on communication is in both directions instead of one, BUT with movies we can cache ahead to avoid network hickups. A game can't do that.

Again, it would be hard for Apple to get into games. But they HAVE to be researching what their options are and how they will compete with XBox/PS3

I can see 3 choices IF Apple wants to get involved
1) Go it alone - release a games API that works on iTV and Macs. Make their own games, and encourage developers. Allow iPod games run on iTV too.
2) Work with Nintendo. IF Nintendo makes money from their games, not their WII sales, then they might be quite happy to help Apple's iTV run Nintendo games. Apple gets the gamers, Nintendo makes money on sales of its game controllers and the games themselves.
3) Try to develop an open game API. If Apple can make a game API that allows developers to write for iTV/Linux/OSX/WinXP - they may get a lot of takers. A rallying point for everyone not on the MS/Sony bandwagon? They could probably get Intel's backing too since the major game players don't use Intel chips anymore.

The 4th choice is really not a choice... in my opinion
4) Go head to head with MS & Sony - develop a highly powerful gaming environment in software and hardware and throw billions at it to kickstart the market.

The PS3 and Xbox360 do nothing for simplifying the entertainment system setup. Apple should focus first on that. Whatever this hardware is should be capable of playing some fun games at least. Same for the iPod. So the iTV should have at least some games.

I would guess that there is as big or even bigger demand for entertainment systems then there is for video game consoles. I would guess evey male over 40 is not as interested in gaming but interested in a system that reduces the wires and the remotes.

For example, my Dad is 60 and I have to go over and set his system up for him because he can't figure out how to do it. He struggles to figure out how to record shows to his VCR. He juggles 10 remotes and has terrible quality on his HD-ready television. And he is a smart guy too. I find myself shaking my head and thiking, "He has a Lexus in his garage. What he needs is a Lexus entertainment system in his living room."

Apple can do this. They should be able to add some native gaming component to their iTV at least. Then they should offload the processing for cutting edge computer games. It could be another small box, an expansion card, or another remote computer.

You should read my last comment.

Yeah.... but who wants an Apple Tv? It'll just be an overpriced, prettied up LCD panel from some other company.

I'm a huge apple fan, but I don't see why people would buy an Apple TV over something like a Pioneer, Sony, or Panasonic?

Also, having the iTV built in i don't think is a good idea. Lets say the TV goes bad... or the iTV.

Yeah then Apple and Nintendo could dissolve the partnership before any product actually comes to fruition and then Apple could later release a console based on the intellectual property co-developed Wait Sony already did that.

Aaron

Like it or not, it will happen.

It's been 2 generations and Microsoft has lost $4,000,000,000.00 to date doing it. I really don't think it's all that easy. Look at the PSP. Incredible hardware + lackluster software = lackluster product.

I guess my question is: why?

Is there really that much money in the TV market?

Even if Apple did built this TV, how would they sell it?

Most of the time when people buy TV's they head over to Bestbuy/Circuit City/Whatever and stand there, find the one that looks best and walk out with it. Apple would have a few options here. They could sell it in their retail stores only (and online), or they could try to sell it alongside all other TV's in electronics retailers around the county.

Selling it in an electronics store would give it more visibility at the price of the "Apple Experience".

I really just don't see that happening. Apple has no reason to enter the TV market.

hmurchison What's your agenda, why do you keep ignoring the fact that Microsoft lost billions on the XBox and Apple could never afford that?

You can easily check the XBox' numbers in Microsoft's Earning Reports. Between Jul 03 and Sep 06 their entertainment business lost $3.2 billion. That includes more than $1 billion since the release of Xbox 360, so the XBox 360 is a loss leader of huge dimensions.

For Oct 01 (when the XBox 1 went on sale) to Jun 03 Microsoft did not reveal the losses of their entertainment business, but they did state revenues of that segment and there are detailed sales numbers from NPD group, Media Create and others for that time. From those sources we can be sure that the losses at that time were in the same region or even higher as from Jul 03 onwards, amounting to at least $2.5-$3 billion for the early life of the XBox 1.

If you add those numbers Microsoft lost about $6 billion or more on the XBox project so far, with $5 billion coming from the XBox 1 and $1 billion coming from the XBox 360. Even if they should break even in one of these next quarters (it has not happened yet) it will take them another decade to get that money back, and they might well fail.

PS: Those people that like Nintendo's Wii, just buy it and plug it into your TV, along with your iTV from Apple. What would be the benefit of combining those two? Nintendo's strategy helps Apple, but they don't have to merge the companies or products for that.

It's always so bizarre to read these kinds of threads. I read though this entire thread so here comes a rant. Feel free to skip it. :-)

First, why would Nintendo partner with Apple when they're doing perfectly fine and enormously profitable all by themselves. Even if Wii turns out to be a novelty and fizzles out after a year or so, Nintendo's proven itself incredibly resilient. After 2 years, DS has proven it's not only NOT a gimmick, but a huge cash cow. Nintendo rode all those disappointing GameCube years on Game Boy Advance. This is a company that has never turned an unprofitable quarter in over a century. Add on Nintendo's multi-billion war chest (this is something like 5-10 billion US dollars of liquid assets, on top of whatever the market value of the company itself is.) Microsoft couldn't justify buying Nintendo, I highly doubt Apple could.

Sony is... Sony. Why would Apple want to buy all that baggage just for PlayStation? On top of everything else, and this applies to Nintendo as well, as long as these companies are Japanese stalwarts and the Japanese government continues to be run by the racists that have been in office since WW2, don't expect any acquisition, especially by an American company, to be a simple affair.

Microsoft would be the best example for Apple to look at if they were serious (and I don't think they are), and I just don't see the kind of vision to truly pursue the console market that Microsoft had in J Allard. There's talk of using Mac components and a barebones version of OSX. That's just a recipe for failure. Even Microsoft was smart enough to make the original Xbox Windows-free and with the 360, completely customized chipsets and a PowerPC processor (ironically what all the next gen consoles use)

Apple has always been the kind of company that pushed products that promoted other products, but the minute they start thinking that way, they're doomed to fail because the console market is a unique marketplace. Quite honestly, the Mac gaming scene is pretty dead. Isn't it possible that Apple's recent gaming acquisitions are less about going after Sony/Nintendo/Microsoft, and more about just establishing a gaming presence on the Mac? The Mac as a platform is perfectly fine, although some of the hardware choices Apple has made don't necessarily lend themselves to it as well as they could. This could be a first-party effort on Apple's part to make themselves a legitimate gaming presence on the market.

...and thus the rant ends.

Sony may never make money on the PS3, they are loosing more than average on the PS3 and a recent interview with one of the MS guys he was talking about how it takes 4 years to see a return on the hardware (unless you can get a much higher than average attach rate, Sony's off to a bad start) With Sony's extra loss on each system, it may take 5 or more years to see a return and what do you want to bet MS will have a new system ready to go just in time to catch Sony with their pants down. I'm no Fanboy, I have all three, the 360, the Wii and the PS3 (not to mention a DSLite and PSP), I just know that MS is a smart company (when it comes to profit) Billy knew he'd loose money on the Xbox and you know what, he didn't care. He was looking at the big picture.

What if Apple uses the boot camp as a portal by which they could run games designed for windows. You can download the games via itms and play them on the itv via a virtualized environment. It would kind of be lide downloading a movie.

Apple said they had no plans to have virtualizaion on the mac but they didn't say that they didn't have other plans. Like for ITV

Or, Apple could spend some coin and get the OS up to par with the gaming industry.

But then again wasn't microsoft using a PowerMac to test the XBox 360???

I think that all of that Legacy Power code is now really valuable to Apple.

With over 200 million Playstation's sold. Sony has an installed base that eclipse Xbox and Nintendo combined. Over 2006 Playstation 2 has out sold Xbox 360. Sony clearly has the momentum.

PS1's costed $39.00 while the Xbox was on the market at 299.00 and PS2's cost what $149.00 or have they gone down? Plus, a lot of people buying PS2's at this point are just replacing broken hardware. I know people who have had 3 or 4 PS2's. I know that 110 million systems are not sitting in anywhere near 110 million homes, probably more like 60 million. In college, I managed a video game store and I kid you not, we had probably 100 broken PS2's in our back store room (and 1 broken GameCube).

Those incredibly high sales numbers have a lot to do with...

1) A long time with no serious competition

2) Hardware matured to the point that the low cost of the system attracted even the most reluctant spenders

3) Big time name brand recognition. When I was younger, my mom called every system a Nintendo no matter who made it, now she calls everything a PlayStation (even my DSLite), If she were to going to buy me a system for Cristmas, what do you want to bet she would get me a PlayStation.

Aaron

You don't think that those costs are factored into the cost of the product? Apple's systems are pretty steep. I'm not saying they are not worth it, I'm just saying they are not cheap by any strecth of the imagination.

Do you have a PS3? I do, and I'm not sure it's got what it takes to beat either Nintendo or MS. To be honest, I only have one game for it (Resistance) and I don't play that becuase I can't stop playing Zelda on the Wii. The rest of Sony's launch titles blew chunks and I'm not seeing any tripple A titles on the horizin in the near future. Add to that the fact that 80% of the games will be cross-platform and the 360's price point is a lot sexier. Plus and here is a biggie, online sucks with the PS3. I know its free, but you know the saying; you get what you pay for.

Just because there's a report about Apple hiring game designers why does everyone assume Apple will then develop games? Could it not be because game designers have other skills Apple's looking for? Video and graphics perhaps?

(I numbered your comments so I could reply to them more effectively, and left out all unnecessaries, please forgive me.)

1. Huh?

2. They'd do both.

3. No reason?

(i) They've got all the reasons in the world, and I suspect Apple wouldn't be stupid enough to avoid receiving more money.

(ii) They must address this market at some stage

(iii) Apple's beginning to sell movies.

(iv) Apple loves all in one.

(v) Apple knows how to make existing producs better.

(vi) Apples is currently in the process of entering several markets they have never been in.

(vii) One remote = The holy grail. Steve Jobs knows this, but consumers think there's no solution, so they live with all the bullshit clutter that's not wanted or needed.

(viii) Apple wants us to connect our TV's to our computer, with a product they're making. This is the next logical step. Avoid the connecting process, so it just works/connects out of the box.

(ix) Simplification = ease of use

(x) Cool styling as a bonus

(xi) They're good at making hardware

(xii) They could reinvent the TV if they put thier mind to it.

(xiii) Apple is very good at business, and this makes good business sense.

(xiv) One remote, one piece of hardware that does it all well, what more could anyone want.

(xv) No more old or non techie people will need any help setting up their entertainment system as you just plug the Apple TV in the wall and away you go. People like that independence, it gives them a sense of satisfaction, confidence, achievement, and makes them happier.

(xvi) People will say, I can't believe no one thought of this sooner.

(xvii) I'd buy one!

According to news sources here in Japan, they've already called that race...Nintendo wins hands down. Sony is both overpriced (adding the unproven BluRay was a BIG mistake) and undersupplied--great formula for a losing product. XBOX was never even a contender, at least on these shores.

BTW, has anyone noticed how familiar the Wii looks-packaging, website, ads? I'd be willing to bet five nuts that Nintendo and Apple are already in love--even if they haven't consummated the relationship yet.
PREDICTION: An iMac that comes with a Wii remote and a DS model in the iPod lineup.

Of all your reasoning, the only one that would make me consider buying an Apple-brabded TV is the all-in-one remote. I don't know, but I think I would fork out the extra money to get that convenience.

You'd be right too becasue that's the biggest and most obvious reason, when you see it in words.
Some people come along and say; there's already all-in-one universal remotes. What they fail to see is this isn't a universal remote, it's a universal TV.

IMHO, the PS3 is a bit of a Trojan horse for Sony. The initial profit earning of the PS3 isn't a big deal if it solidifies Blu-ray as the next gen optical drive. The profits from that should last, at least, the next 15 to 20 years.

That's just it. They're already calling Blu-ray the new beta, and after gauging consumer sentiment, it seems people are unwilling to splurge that 2-300 dollars extra for a format that may well be extinct in a few years. Everyone is waiting around to see where everyone else is gonna go, and people are not adopting PS3s as rapidly as Sony may have hoped.

My Wii has just arrived as I write, and I swear, that box would so not look out of place in an Apple store...

I agree with Ireland, although I hope Apple keeps the setbox separate from the tv.

When I saw the question how would Apple sell a tv, I had the same thing - huh? The answer to this question is so easy I don't see how somebody could even ask the question. If Apple brings out entertainment systems and cell phones, they should sell them in stores along side their computers. Wait - Apple already has stores. Think it is all chance? I think Jobs is way ahead of us on this one.

One remote, one remote, one remote...

The question is where does games fit into this strategy. The Pippen would have been the right product at the right time but I doubt Apple could have waged war at that time and been successful. I think they wanted to but financially couldn't. They had to skip that segment.

But the question is whether that will come back to haunt them now in the living room. Thank goodness Sony has been battling MS to keep them from owning that segment. And Nintendo too. But Apple has to figure out how to get in on the action without breaking the bank.

Consoles pack a lot of computer power at a super cheap price. Apple has no opening to exploit with consoles. Same with games. Apple cannot create or buy a host of games cheaply. However, if they could make a platform that could run competitor's games they would have a chance.

Remember the old PS emulator? What if Apple could do something similar for the Xbox360 or PS3? Or how about PC games? If Apple can figure out a way to make this happen they can solve the number of games issue.

The next question is what is Apple going to do the processing. That's why I suggest they borrow the processing that already sits idle in another computer. iTV only works when tied to a Mac so why not harness this processing power? Is it possible? I think so.

The only question is latency. If a standard LAN connection introduces too much latency, Apple could always come up with a special solution. This could as simple as a dedicated ethernet wire connecting the iTV directly to the Mac. It would be a cheap solution for harnessing the Mac's power.

I don't see why somebody would essentially buy two high powered computers, one which only does games and another which does everything else. While they work/play on the one, the other sits idle. This is what people do with consoles currently.

So Apple could tap into the computer's power for gaming. If it had an emulator or at least could use a version of boot camp to run PC games, then they have a solution.

I admit this is a far out solution but it makes use of all the pieces Apple has.

w00t! Apple getting into thre gaming bizz big time? Why not? Start with little gamez for the iPods/iPhones, Apple has very deep pockets at this time, so buy a game maker or two, all 3 consoles happen to have PowerPC CPU's and nVidea/ATI graphics, which we know Apple has plenty of programming experience with.

And take a look at this link;

PS3 *NIX

That's right, 64-bit YDL 5.0 will run on the PS3, and who else has 64-bit *NIX? That's right Apple.

BTW, I'm getting YDL as a duel boot for my Quad G5, in addition to IBM's kickass 64-bit Fortran 10.0 compiler optimized for the PowerPC, gonna do some kickass programming, been waiting on this for almost a year now.

Apple has always so been into gadgets, that it only seems natural (to me anyway) for Apple to expand into the console market.

Nice rumor!