Apple investing more than $500M on Apple Arcade launch, report says
Apple is reportedly investing heavily to get its upcoming Apple Arcade game subscription service off the ground, with the tech giant sinking upwards of $500 million into the more than 100 titles expected at launch.
Citing sources familiar with the matter, the Financial Times reports Apple is spending or has spent several million dollars to secure and develop each launch title, likely bringing the total outlay for Arcade to well over half a billion dollars.
Apple is offering publishers extra incentives if they agree to exclusivity windows, the report said, restricting new releases to Arcade for a few months before wide distribution on rival platforms. The strategy should continue once Arcade launches, as Apple promised the platform will net new and exclusive games on a regular basis.
Apple announced Apple Arcade at a special event in March. When the subscription-based service is made available on iOS and macOS later this year, customers will pay a monthly fee for access to a host of premium titles developed by both well-established publishers and independent studios.
Big-name brands like Cartoon Network, Disney, Konami and Sega are offering access to titles on Arcade, and up and coming studios with successful App Store track records, like ustwo and Annapurna, are taking part in the project with Apple's assistance. According to today's report, the iPhone maker is advancing to developers funds that exceed the cost of creating a typical indie game.
Apple appears to be front-loading Arcade in an attempt to make a splash in the market. Gaming is a well-established industry, with iPhone responsible for a boom in mobile development and distribution, but Apple is joining a relatively recent push into subscription platforms. Google, for example, revealed the cloud-based, cross-platform streaming service Stadia last month. Similar first- and third-party subscription hubs have been available on PC and console for years.
Apple's $500 million investment in Arcade stands in contrast to a reported $1 billion outlay -- likely more at this point -- for original TV shows and specials slated to arrive on the upcoming Apple TV+ service.
Analysts at HSBC predict Apple to reap $370 million in Arcade revenue by 2020, a figure expected to grow to $2.7 billon by 2022 and $4.5 billion by 2024, the report said. The firm estimates Arcade to boast 29 million subscribers paying $12.99 per month in 2024. HSBC believes Arcade has higher earnings potential than Apple TV+, which is anticipated to generate $2.6 billion in revenue by 2022 and $4.1 billion by 2024. Apple News+, Apple's newly launched news and magazine subscription service, is predicted to bring in $1.7 billion and $2.7 billion in 2022 and 2024, respectively.
Apple has not revealed pricing for either Apple Arcade or Apple TV+, both of which are due to launch this fall.
Citing sources familiar with the matter, the Financial Times reports Apple is spending or has spent several million dollars to secure and develop each launch title, likely bringing the total outlay for Arcade to well over half a billion dollars.
Apple is offering publishers extra incentives if they agree to exclusivity windows, the report said, restricting new releases to Arcade for a few months before wide distribution on rival platforms. The strategy should continue once Arcade launches, as Apple promised the platform will net new and exclusive games on a regular basis.
Apple announced Apple Arcade at a special event in March. When the subscription-based service is made available on iOS and macOS later this year, customers will pay a monthly fee for access to a host of premium titles developed by both well-established publishers and independent studios.
Big-name brands like Cartoon Network, Disney, Konami and Sega are offering access to titles on Arcade, and up and coming studios with successful App Store track records, like ustwo and Annapurna, are taking part in the project with Apple's assistance. According to today's report, the iPhone maker is advancing to developers funds that exceed the cost of creating a typical indie game.
Apple appears to be front-loading Arcade in an attempt to make a splash in the market. Gaming is a well-established industry, with iPhone responsible for a boom in mobile development and distribution, but Apple is joining a relatively recent push into subscription platforms. Google, for example, revealed the cloud-based, cross-platform streaming service Stadia last month. Similar first- and third-party subscription hubs have been available on PC and console for years.
Apple's $500 million investment in Arcade stands in contrast to a reported $1 billion outlay -- likely more at this point -- for original TV shows and specials slated to arrive on the upcoming Apple TV+ service.
Analysts at HSBC predict Apple to reap $370 million in Arcade revenue by 2020, a figure expected to grow to $2.7 billon by 2022 and $4.5 billion by 2024, the report said. The firm estimates Arcade to boast 29 million subscribers paying $12.99 per month in 2024. HSBC believes Arcade has higher earnings potential than Apple TV+, which is anticipated to generate $2.6 billion in revenue by 2022 and $4.1 billion by 2024. Apple News+, Apple's newly launched news and magazine subscription service, is predicted to bring in $1.7 billion and $2.7 billion in 2022 and 2024, respectively.
Apple has not revealed pricing for either Apple Arcade or Apple TV+, both of which are due to launch this fall.
Comments
I use the Steele Nimbus controller with AppleTV, and for certain games it is a MUCH better experience than using either the AppleTV remote or iPhone touch screen. However, currently not all games are designed to support it.
But somehow, given that this is Apple, 'more than $500M' just doesn't seem like a lot of money.
The other aspect most people don't understand is the same reason why Apple Music has been such a huge success. Like many or most people I didn't buy music very regularly because of discovery and expense. Once I tried Apple Music I was hooked as for about $7 a month I can get access to unlimited music, new and old, and there is easy discovery. I am sitting here reading while listening to Apple Music on my fantastic sounding Homepod. SIri works fantastic on the Homepod, and I just asked Siri to play some new music for me. Whenever she plays something I like/dislike I don't have to even stop typing to ask her to mark it as such or add it to one of my playlists.
-Apple Card
-Arcade
-TV+
-News+
To be able to plays a hundred of games you won’t be able to play somewhere else, that’s a huge huge draw. Like someone said above, it only needs a few must play game for the platform to be successful.
I guess we'll see what happens in the future when we hear more details about it.
Kids? Nope
Parents for kids? Nope
Gamers? Nope
Casual Gamers? Nope
Sadly freemium games will still dominate. Maybe if Apple could sign up a major gaming company and develop something like Diablo IV...
It’s going to be difficult get a big budget game built with Apple’s shotgun approach to spending on games...
Apple will do well with News. They need something like Kindle Unlimited. I have zero interest in Apple TV, but I might sign up for Disney’s offering in chunks. For example, spend $10 on HBO then cancel, spend $10 on Netflix then cancel, spend $10 on Disney then cancel. Month to month then repeat...
Of course! no one is gonna buy this!! 0 subscribers in Arcades first year! DOOOOMED!
I agree they should be spending more but if this is a yearly cash pump, then it's a whole lot. I believe game companies don't even spend half of this in a year.
Some sources: https://en.wikipedia.org/wiki/List_of_most_expensive_video_games_to_develop, https://kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649
However what I do see is Apple releasing new hardware that can leverage these games. The new Mini IPad is a start here as their lowest end game platform. What I’m expecting is a new SoC for iPad and an Apple TV variant, possibly even more hardware. I’m not sure if that chip will be limited to iPad Pro or if a gaming tablet is in the future. The gaming tablet would need a few features to set it apart from the other iPads. A rugged case being high priority but also novel input devices.
By rugged case I mean industrial strength, sort of like scan tools mechanics have. Something that is inherently rugged and can take abuse. A rugged plastic with a beefy rubber over-mold would do. The case ought to be able to hold a larger battery but not so large that it can’t be taken on airplanes. Frankly Apple has an opportunity here to open up the platform a bit with a device specifically designed for hard users.