New Apple TV with App Store would enter Apple into $35 billion home gaming market
With software sales for traditional game consoles and PCs projected to reach $35 billion this year, one analyst believes a new Apple TV with a dedicated App Store could have a noticeable impact on the company's bottom line.
Rod Hall of J.P. Morgan is bullish on the prospect of a new Apple TV model rumored to debut at Apple's annual Worldwide Developers Conference in June. In a research note to investors issued Monday, a copy of which was provided to AppleInsider, he noted the combined console and PC gaming market is expected to sell $35 billion worth of software this year.
For every 10 percent of share in this market that Apple could tap into, Hall believes it would add about 1.5 percent in additional earnings for Apple.
The analyst noted that the A8X chip found in the iPad Air 2 is capable of near PlayStation 3 quality graphics. If Apple were to use that processor to power a next-generation Apple TV, the company could make a formidable splash and compete with the likes of Sony, Microsoft and Nintendo in the longstanding console market.
Beyond games, Hall also believes that a new over-the-top subscription TV bundle would be yet another revenue and profit opportunity for Apple.
Word first surfaced last week that Apple is expected to unveil a new Apple TV, complete with App Store and Siri support, at WWDC. It was said that the device will use the same A8 chip series found in the iPhone 6 and iPhone 6 Plus, but it was not indicated whether it would be the upgraded "X" chip variant found in the iPad Air 2.
On its own, the A8 processor is powerful enough to output 4K-resolution video, which means it could be capable of supporting ultra-high-definition content. Service like YouTube and Netflix already offer some content in 4K resolution, while a number of 4K-capable TVs are on the market.
Much of the groundwork for a traditional console-style gaming experience has already been laid by Apple. For example, modern iPhones and iPads already feature support for third-party Bluetooth controllers, GameCenter social networking integration, and iCloud syncing of game saves.
Extending those capabilities to the Apple TV, and adding an App Store, would give developers the ability to create more traditional console-style games for the living room on Apple hardware.
Rod Hall of J.P. Morgan is bullish on the prospect of a new Apple TV model rumored to debut at Apple's annual Worldwide Developers Conference in June. In a research note to investors issued Monday, a copy of which was provided to AppleInsider, he noted the combined console and PC gaming market is expected to sell $35 billion worth of software this year.
For every 10 percent of share in this market that Apple could tap into, Hall believes it would add about 1.5 percent in additional earnings for Apple.
If it uses the same A8X chip as the iPad Air 2, a new Apple TV could be as powerful as a PlayStation 3 console, Rod Hall believes.
The analyst noted that the A8X chip found in the iPad Air 2 is capable of near PlayStation 3 quality graphics. If Apple were to use that processor to power a next-generation Apple TV, the company could make a formidable splash and compete with the likes of Sony, Microsoft and Nintendo in the longstanding console market.
Beyond games, Hall also believes that a new over-the-top subscription TV bundle would be yet another revenue and profit opportunity for Apple.
Word first surfaced last week that Apple is expected to unveil a new Apple TV, complete with App Store and Siri support, at WWDC. It was said that the device will use the same A8 chip series found in the iPhone 6 and iPhone 6 Plus, but it was not indicated whether it would be the upgraded "X" chip variant found in the iPad Air 2.
On its own, the A8 processor is powerful enough to output 4K-resolution video, which means it could be capable of supporting ultra-high-definition content. Service like YouTube and Netflix already offer some content in 4K resolution, while a number of 4K-capable TVs are on the market.
Much of the groundwork for a traditional console-style gaming experience has already been laid by Apple. For example, modern iPhones and iPads already feature support for third-party Bluetooth controllers, GameCenter social networking integration, and iCloud syncing of game saves.
Extending those capabilities to the Apple TV, and adding an App Store, would give developers the ability to create more traditional console-style games for the living room on Apple hardware.
Comments
I might jump in for the first time if Apple starts having really good sims on Apple TV. I have X-Plane 10 on the Mac which is as close to a 'game' of that sort i own that requires control devices to really use properly .. but I only use the keyboard and mouse. I have been tempted many times to get better controllers.
Maybe Apple have an A9 in the wings?
Nope. First off, it's not an achievement for a set-top box to be mostly competitive with 2005-era technology (counting the development phase, I know the PS3 launched in 2006). In a tablet, yes, but not a home box. Second, you're not going to get the AAA titles; most developers and publishers are either cancelling planned PS3/360 versions of the latest titles or simply going PS4/One only. The PS3/360 simply can't handle the modern titles anymore, we've gone beyond the RAM being the limitation to the simple fact that the hardware is obsolete.
This is one area that people simply don't understand. In 17 months the PS4 has outsold the GameCube's six year total, and will soon pass the four-year total of the original Xbox. That's not a dying market, and people aren't looking for alternatives. The Wii market no longer exists.
Remember if a kid spends to much time indoors they may become myopic!...
http://www.nature.com/news/the-myopia-boom-1.17120?WT.mc_id=TWT_NatureNews
Yes Apple need to aim far ahead. Apple are good at entering markets late, changing the paradigm and disrupting the industry entirely. I can't see how, if Tim wants to, Apple couldn't do this with games on a future Apple TV.
Great, so my kids can spend "60 dollars" on tchotchke coins, in a stupid app!... When that money would be better spent on outdoor equipment.
Remember if a kid spends to much time indoors they may become myopic!...
http://www.nature.com/news/the-myopia-boom-1.17120?WT.mc_id=TWT_NatureNews
You're right; they should totally just sit down and watch March Madness instead, because that's different.
I think that rant should be under the heading 'Good parenting'. No one would disagree with you in general but it is hardly the problem for Apple as such. You could aim the same rant at Jigsaw Puzzle makers. There are snow days occasionally ...
Yes Apple need to aim far ahead. Apple are good at entering markets late, changing the paradigm and disrupting the industry entirely. I can't see how, if Tim wants to, Apple couldn't do this with games on a future Apple TV.
Let me list reasons.
1. There's room for three competitors, not four.
2. Game consoles are designed to last for several years, not be replaced and updated yearly.
3. There's an incredible amount of risk in games, and you need first-party titles to distinguish yourself, which costs a lot of money.
4. Hardware is almost always sold at a loss, with the cost decreasing over time, and the intention being to make up the money on accessories, services, and licensing. Apple doesn't do that.
Could? Possibly. Should? Not at all. Apple has better markets to work in.
march madness tends to be for people who will not get myopic! Meaning after 18, you are, or you are not, myopic and nothing is going to change that..:D
I just don't think many here get it. It doesn't need to beat PS4.. This catches a much larger market of consumers that don't get the Apple TV as a gaming console.. They get it for movies and TV's, then DiSCOVER the games available.
These games won't be the big Halo or the like at first.. the Smash hits will be Candy Crush on the big screen.. which outsells PS4 game sales and makes it look like a chump.. LOL
Plus, it will sell for much less than a PS4, at $100-150.. making any 'true' console look expensive.. funny really.
…it’s not an achievement for a set-top box to be mostly competitive with 2005-era technology…
When it got there from being competitive with 2001-era technology a year prior, it is. And when people don’t care about hardware specs over looks and performance, it is.
In 17 months the PS4 has outsold the GameCube's six year total
Have they made ONE DOLLAR on it? A single dollar? I somehow doubt it. Meanwhile, Nintendo made money on every console sold. Apple’s taking the Nintendo strategy.
It’s a semi-dying market. We’re gearing up for a new Crash of ’83. It’s going to be pretty devastating to most studios and IPs.
The WiiU is backward compatible with Wii games and my collective family uses at least one of its Wii consoles every day.
You seem to be failing to remember that the A8X is THE NEWEST PROCESSOR AVAILABLE, on THE MOST ADVANCED, USED, AND DESIRED MOBILE PLATFORM ON EARTH.
Your argument would only mean something if people didn’t create games at all for iOS because “video game console hardware is better”, despite that being completely irrelevant. You’re on point for some other things, so I’m confused why you don’t get that.
No argument, you just described the current industry PRE a possible paradigm shift. What that might be I have no idea of course. Your list is very similar to lists made pre iPhone as to why Apple could not / should not enter the phone market. I am simply saying if Apple could disrupt the game industry your list is moot.
The last point is the most valid but perhaps they can multitask.
To sum the article that i linked to up, kids (5-13) year olds need about 3 hours of sunlight...
march madness tends to be for people who will not get myopic! Meaning after 18, you are, or you are not, myopic and nothing is going to change that...
And video games stop sunlight, evidently.
When it got there from being competitive with 2001-era technology a year prior, it is. And when people don’t care about hardware specs over looks and performance, it is.
Have they made ONE DOLLAR on it? A single dollar? I somehow doubt it. Meanwhile, Nintendo made money on every console sold. Apple’s taking the Nintendo strategy.
It’s a semi-dying market. We’re gearing up for a new Crash of ’83. It’s going to be pretty devastating to most studios and IPs.
The WiiU is backward compatible with Wii games and my collective family uses at least one of its Wii consoles every day.
You seem to be failing to remember that the A8X is THE NEWEST PROCESSOR AVAILABLE, on THE MOST ADVANCED, USED, AND DESIRED MOBILE PLATFORM ON EARTH.
Your argument would only mean something if people didn’t create games at all for iOS because “video game console hardware is better”, despite that being completely irrelevant. You’re on point for some other things, so I’m confused why you don’t get that.
Nope. Nintendo's lost money on the 3DS and the Wii U, they weren't profitable. I don't even know if the Wii U is profitable now. Meanwhile Sony's been raking in hundreds of millions from the PS4. Your arguments are as out of date as the Wii.
And while big publishers are having issues, the indies aren't.
There hasn't been much crossover; the 3DS is selling very well despite the plethora of iDevices. Then again, buttons matter, this is something people who don't game miss.
EDIT: The gaming market cares very much about graphics, and they're the market you want. Ask Nintendo what happened in 2011 when the Wii fad died; all of a sudden all the people they'd been counting on stopped buying games, and their bottom line took a solid pounding. You need the hardcore to support you. Trust me, while price was a factor, the additional horsepower of the PS4 has been a strong selling point for it over the Xbox One.
I suspect that the new AppleTV replacement will be an A9X chip with 4 times the graphics performance of the current A8X.
The developer announcement will mean that developers will have 4-6 months to enhance their Apps for an October/November release just in time for the holiday season. Plenty of high performance games already in the App world; so Apple will come out of the gate with a huge gamer platform.
Nope. First off, it's not an achievement for a set-top box to be mostly competitive with 2005-era technology (counting the development phase, I know the PS3 launched in 2006). In a tablet, yes, but not a home box. Second, you're not going to get the AAA titles; most developers and publishers are either cancelling planned PS3/360 versions of the latest titles or simply going PS4/One only. The PS3/360 simply can't handle the modern titles anymore, we've gone beyond the RAM being the limitation to the simple fact that the hardware is obsolete.
This is one area that people simply don't understand. In 17 months the PS4 has outsold the GameCube's six year total, and will soon pass the four-year total of the original Xbox. That's not a dying market, and people aren't looking for alternatives. The Wii market no longer exists.
They meant PS4. The PS3 never had capabilities for 4K. Heck, it wasn't even a twinkle in Sony's eye yet.
But I keep running into a wall labeled "Why?" What would an Apple TV do that my Mac and iPad won't do? I'm not into games. I gave up on TV as a total bore about two years ago. I don't want to get into the Netflix 'watch lots of movies because I've paid for them' trap. When I have free time, I'd much rather go for a walk and listen to audiobooks or podcasts.
Nothing, nothing, nothing. Apple should probably give up on me. I'm not in need of any additional entertainment and that's what they're selling here.
Can't wait to buy the new Apple TV. Simply having a BBC iPlayer app will make it worth the money.
Gamers never want to hear this, but high end games is a sub market it is only a small group of users who live and die this stuff. Most people move on and stop playing video games. I agree apple will never come close to a game console product and I agree Wii is now really dead even though my older teens and their friends still cover over and break out the Wii and play it for hours. I think Apple is looking to land they middle ground between high end game console and DS/Phone based games. I will be like games on the phone, most people have a few games on their phone and use it to pass time or to interact with their friends the same could be true for apple TV. It is not going to be a big revenue thing for apple.
Yeah this is exactly why an iOS App Store would fail. I say they should cut their losses and remove games from ios. The playstation portable has way better graphics and doesn't get replaces yearly. Or maybe Apple can pay you to buy an Apple TV just so they can report a loss