Apple earns more from gaming than Sony, Nintendo, Microsoft, Activision combined

AppleInsider

Apple's profits from gaming outweighed those of major game companies, according to a report, with Apple earning more from App Store games in its 2019 fiscal year than Nintendo, Microsoft, Activision Blizzard, and Sony combined.

The lawsuit between Epic and Apple brought many details about Apple's operations to light, due to the vast amount of evidence surfacing during discovery and subsequently being submitted to the court. In a report examining some of the data released as part of the lawsuit, it seems Apple's earnings from gaming surpassed many other heavyweights in the industry.

Analysis from the Wall Street Journal put Apple's operating profits derived from gaming in 2019 at $8.5 billion. During the trial, Apple said the discussed operating margins were not right and were higher than reality.

The report claims the gaming-based figure is approximately $2 billion more than the operating profit generated from games during the same 12-month period by Sony, Activision, Nintendo, and Microsoft. The gaming companies' data stemmed from company filings, while Microsoft's figure was from an analyst estimate.

Apple told the publication on Friday that the operating margins discussed in the trial were produced from analysis that didn't take into account numerous joint costs associated with the App Store. In effect, the analysis included all of the game-related revenue but only a tiny fraction of the possible cost.

Gaming makes up the bulk of App Store revenue, the analysts offered, taking into account data from Sensor Tower that estimated Apple received $15.9 billion in revenue from the App Store for the year, and that 69% of that figure derived from gaming. Using data from the court, it was implied the App Store had an operating profit of $12.3 billion for the year, accounting for almost a fifth of the overall operating profit.

Regardless of how the breakdown is performed, it demonstrates that Apple is a major force in gaming, one that outpaces mainstay companies synonymous with console gaming.

In her ruling of the lawsuit on September 10, Judge Yvonne Gonzalez Rogers noted that Apple did enjoy "considerable market share of over 55% and extraordinarily high profit margins," but that Epic failed to demonstrate Apple was an "illegal monopolist." Epic has appealed the decision.

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planetary paul

I'm not exactly surprised. The only thing I see these days when I open the mobile App Store is games, games, more games and then some. There used to be a time when Apple was considered to be an absolute nobody in games. Somehow they turned that around ;-)

omasou

Console and PC players constantly bad mouth iOS as a gaming platform, yet it makes more money from of games. Doh!

Not rocket science accounting at play here. Apple sells way more iPhones than consoles and PCs (for games) combined. So Apple should be penalized or thought badly of b/c they are successful at providing their customers what they want?

Also seems like people keep forgetting what it takes to keep the cloud up for all those players.

Give me a break.

edited October 2021

crowley

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

danox

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

Epic is the biggest negative in games, a close second are other gaming companies.

auxio

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

mpantone

Not a surprise. Apple has a bigger installed user base. And there are more usage cases for iDevice gaming than PC/console gaming.

Nintendo recognized years ago that today's infants will likely first play a game on a smartphone rather than some Nintendo device.

Even if many hardcore gamers disdain Apple's game selection, they never seem to understand that many game players are just little kids whom parents are trying to occupy for a short spell. It's not just about the big gaming franchises like Halo, Resident Evil or GTA. Many gamers are too moronic to understand that there are many more people who mostly dabble in "casual gaming" titles.

In the same way, the movies with the best overall revenue are mostly Rated G kids movies especially when DVD/Blu-ray/digital download sales are considered. 

corp1

omasou said:

Console and PC players constantly bad mouth iOS as a gaming platform, yet it makes more money from of games. Doh!

iOS is a fine gaming platform and iPhones/iPads can be great gaming devices (especially with a controller.)

Unfortunately so many mobile games are "free to play" with obnoxious monetization schemes (slot-machine/gacha mechanics, pay to win, energy systems, in-game currency that you buy with real money, intrusive advertisements, surprise paywalls, etc..)

I don't expect this to change since the schemes work and take in tons of money, and full-price games are a harder sell on mobile since they have to compete with "free."

edited October 2021

phaseangle

Doesn't help when so called triple A titles only work for a couple iOS versions then tell you to upgrade to the next paid version of their game

ktr

lmasanti said:

It is quite intriguing to me the ‘time’ of this news.

Of course, it is almost clear the the WSJ appears to live on finding bad thing on Apple.

But after the Judge said that ‘Apple is not a monopoly in mobile games but it is at risk of being’… then someone makes a ‘report’ that mixes mobile/console/PCs.

Apple's earnings on iOS games is huge… but it is not a monopoly.

And all that comes after console makers and games stores reduced their commissions… so they earn less. (Apple's earning were huge event then.)
S 
Success is not illegal. (But makes others hate you!)

Well the way I see it, it’s not Apple‘s fault that the product is being used more widely now. What about Microsoft.?It’s we the people who decide flourishes. Not you the government.

crowley

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

fidonet127

crowley said:

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

Same model exists on Android devices. With all the hate Epic and other developers are pushing for Apple to allow other iOS app stores or to lighten the rules and stop rejecting so much…. I don’t think Apple has the room to crack down on this.

In the meantime Apple does have their Apple Arcade, which I think has many good games, however the true gamers whine about it not having AAA games. Bundled with iCloud+, 2TB storage, exercises, Apple TV+, Apple News+ and Music. 

edited October 2021

lorca2770

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

All games are trash, and worse if you are past 12. Do you read?

auxio

crowley said:

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

How exactly did they incentivize it?  And I assume you're on Android forums arguing the same point?

And even if Apple removed offending games, people were doing the same thing with browser-based games and online casinos long before the app store came along.  How do we stop those?

As for exploiting addiction properties, I'd argue that social media is doing the exact same thing but on a much larger scale.  Should we call for a ban on social media apps too?

edited October 2021

auxio

lorca2770 said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

All games are trash, and worse if you are past 12. Do you read?

I'd argue that, as far as entertainment time goes, interactive entertainment (like games) is far better for the brain than most television (passive entertainment).  Though obviously time spent actually engaging with the real world is best.

genovelle

The difference here is these companies focus on “real gaming” which sounds important, but in reality is a limiting factor. There may be millions of people interested in console games and they are loud and heard from often. On the other hand there are billions who play casual games to kill time every so often. Apple sees the forest where others remain blinded by the trees. 

edited October 2021

crowley

lorca2770 said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

All games are trash, and worse if you are past 12. Do you read?

No they aren’t. And yes.

crowley

auxio said:

crowley said:

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

How exactly did they incentivize it?  And I assume you're on Android forums arguing the same point?

And even if Apple removed offending games, people were doing the same thing with browser-based games and online casinos long before the app store came along.  How do we stop those?

As for exploiting addiction properties, I'd argue that social media is doing the exact same thing but on a much larger scale.  Should we call for a ban on social media apps too?

They incentivised it with the app store model, free centralised hosting, race to the bottom list pricing, and in app purchases.  All the economics point towards the Candy Crush model, and Apple allowed ridiculous in app purchase listings of $100 gem bundles, with few protections.  They showed care for the user only in as much as they cared about lifting money from their wallets.

Of course I'm not on Android forums, why would I be?  I'm not an Android user.  Whataboutism.

Browser games are a whole different subject, and harder for lots of users to access.  More whataboutism.

I wouldn't oppose a ban on social media apps, but it's the cherry on the trifle of whataboutism.

strangedays

crowley said:

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

Funny that in the blame game, you somehow missed one…the game developers. They took the app store model that Apple produced with the best intentions, and rigged it with their free games and IAPs. They explicitly chose to do this. Any actions Apple takes is corrective to the original sin of the game devs.  

pulseimages

I played Sneaky Sasquatch for a few days but grew tired of it quickly. 

crowley

StrangeDays said:

crowley said:

auxio said:

crowley said:

Pretty sickening.  Apple's major impacts on games has been almost entirely negative in my view.  Free to play casual trash and the worst kind of monetisations.

So Apple mandated that game developers use that business model?  They raced to the bottom themselves in a desperate attempt to be on every phone.  The hardcore gamer market (i.e. people who will pay a significant amount of money for games) is only so big, as is shown by the console industry.  Either you go after that market (and charge appropriately for well designed games) or you go for a bigger market via the free with monetization approach.  It's not Apple's fault so many choose the latter.

They incentivised it, have taken sod all action against exploitation of addiction properties of pay-to-win models, and are major beneficiaries.

Apple's store, Apple's rules, Apple's fault.

Funny that in the blame game, you somehow missed one…the game developers. They took the app store model that Apple produced with the best intentions, and rigged it with their free games and IAPs. They explicitly chose to do this. Any actions Apple takes is corrective to the original sin of the game devs.  

I didn't miss it, I blame them too, but this article is about Apple.