Apple rumored to be eyeing video game market

Posted:
in Future Apple Hardware edited January 2014
A recent series of checks by Prudential analyst Jesse Tortora indicate that Apple Computer has hired video game designers and may have aspirations of entering the video game market in long-term.



"We think the video game market represents a distinct possibility for Apple, especially considering that it recently announced the availability of video games for its iPod through its iTunes store," the analyst told clients in a research note on Monday.



Tortora said Apple's design superiority, along with its well-recognized brand name, is sure to provide the company an advantage should it decide to enter the market. He said the company could approach the video game sector in one of two ways -- via a home game console or a handheld device.



"The game console device could be morphed out of some combination of the MacMini and iTV, while the handheld player could be developed as an enhancement to a future version of the widescreen iPod," the analyst explained.



Still, Tortora said such a move "would introduce a complex set of market conditions" for Apple, which has traditionally made its real money through hardware sales. "The video game console market is notorious for subsidizing hardware to sell profitable games," he wrote. "Apple would then have to either rely on the sales of its games and downloadable movies to make enough profit to cover losses on hardware or figure out a strategy to make profits on hardware itself."



Given the challenges presented by the video game market, Tortora believes the company's decision to enter the video game market could depend on its need to defend its position against the competition in the battle over the digital home. He noted that Microsoft recently introduced a video download feature to its Xbox 360 gaming system and said he expects Sony will follow.



"There are no technical limitations to this capability, and Microsoft is already aggressively wooing the movie studios," he wrote. "This could adversely impact Apple’s iTunes Movie download business longer-term, along with its iTV and video iPod sales."



The analysts believes Apple will ultimately have to decide "whether to accept this challenge head-on" by entering the gaming market, or conclude that Microsoft and Sony pose little risk to its business and continue on with its current strategy.



In his note to clients, Tortora said Apple has recently hired game developers at both the software and hardware levels.
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Comments

  • Reply 1 of 211
    Bad idea. Apple should stick to the business of building "containers" (players) for purchased and downloaded games, music, video, etc. If Apple makes a new game business, they should immediately spin it off so it can be self-sustaining and competitive with other companies in this market.
  • Reply 2 of 211
    eaieai Posts: 417member
    Seems unlikely to me - it'd be hard for them to enter the sector at this stage, unless they make a really unique product.
  • Reply 3 of 211
    rhoqrhoq Posts: 190member
    Quote:
    Originally Posted by eAi


    Seems unlikely to me - it'd be hard for them to enter the sector at this stage, unless they make a really unique product.



    Nintendo has already go that covered with both the Wii and DS.
  • Reply 4 of 211
    hobbeshobbes Posts: 1,252member
    Not a chance. Apple has little to no understanding of the non-casual game market, and very little interest.



    Any hiring of game developers is almost certainly about more small, casual games for the iPod / iPhone.



    Which is a good thing, for sure, but it has almost nothing to do with the upcoming clash between Sony, MS, and Nintendo.
  • Reply 5 of 211
    I agree. Bad idea.



    I could see the iTv being compatible with iPod games and imporvements to iPod gaming (such as previously rumored gyroscopes, etc.), but I don't even think mac-faithful would be interested in an Apple PlayStation/XBox.
  • Reply 6 of 211
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Rhoq


    Nintendo has already go that covered with both the Wii and DS.



    Buying Nintendo and integrating the features of iTV into it wouldn't be a bad idea, but I can't see Apple entering th market with it's own, original game console.
  • Reply 7 of 211
    g3prog3pro Posts: 669member
    Quote:

    Apple has little to no understanding of the non-casual game market, and very little interest.



    Do you guys pull those statements out of your asses?
  • Reply 8 of 211
    rhoqrhoq Posts: 190member
    Quote:
    Originally Posted by solipsism


    Buying Nintendo and integrating the features of iTV into it wouldn't be a bad idea.



    Never going to happen, however an Apple/Nintendo partnership could be profitable for both companies.
  • Reply 9 of 211
    macrrmacrr Posts: 488member
    I could see moving along as it is- little baby steps.



    The first step was games on iTunes for the iPod.



    It is not far fetched that they would build on that at their leisure. Why not?
  • Reply 10 of 211
    Quote:
    Originally Posted by Rhoq


    Never going to happen, however an Apple/Nintendo partnership could be profitable for both companies.



    They would be wise to partner with as many of the top companies as possible to create an iPod games division (if it's deemed critical to future growth) and not risk their own capital and waste time on game development of loser titles.
  • Reply 11 of 211
    It would be so much easier to jump in and out if they just teamed up with Nintendo.
  • Reply 12 of 211
    leptonlepton Posts: 111member
    I'm sure they are simply working on bigger and better games for the bigger, better iPods that will be coming out next month. Remember, most mobile phones play games too! -Mike from myallo.com, the site that finds without searching
  • Reply 13 of 211
    hmurchisonhmurchison Posts: 12,271member
    Getting into gaming is fairly easy.





    1. Develop a powerful gaming API for OSX

    2. Aquire a large gaming company with great upcoming game.

    3. Develop a console that plays games, downloads movies, streams video/photos

    4. License the hell out of the platform.



    Microsoft has created a winner in just 3 generations of Xbox consoles. Apple can cut that down to 2 generations if they just follow the pattern of success and avoid the pitfalls.



    Bring on the iGame Console!
  • Reply 14 of 211
    I think this is out of context. Consider the PC as a gaming machine. If you ask any semi-knowledgable person why they would buy a Windows box over a Mac, they will either say something about specific applications for work or games. I think Apple may just be working to get a "Gamer's Mac" together. Maybe a super-iMac or something similar.



    So, it wouldn't be a completely new stand-alone box to compete or even just another version of Tetris for the iPod, but fine-tuning the graphics and other capabilities of their current hardware to outshine Windows in the PC gaming market.
  • Reply 15 of 211
    Quote:
    Originally Posted by lepton


    I'm sure they are simply working on bigger and better games for the bigger, better iPods that will be coming out next month. Remember, most mobile phones play games too! -Mike from myallo.com, the site that finds without searching



    I think I read about you, spammer boy. You're one of those posters who now sticks a link into their comments and gets paid for it. Screw Myallo.
  • Reply 16 of 211
    Quote:
    Originally Posted by hmurchison


    Microsoft has created a winner in just 3 generations of Xbox consoles. Apple can cut that down to 2 generations if they just follow the pattern of success and avoid the pitfalls.



    Bring on the iGame Console!



    xbox and xbox360... just 2 generations of xbox consoles.
  • Reply 17 of 211
    rhoqrhoq Posts: 190member
    Quote:
    Originally Posted by hmurchison


    Microsoft has created a winner in just 3 generations of Xbox consoles.



    Microsoft has only been in the video game console race for 2 generations.



    2001 - XBox

    2005 - XBox 360





    *Edit - monkeyastronaut beat me to it*
  • Reply 18 of 211
    palegolaspalegolas Posts: 1,281member
    Nintendo is currently the Apple of videogames. They drive the inovation in my opinion. If Apple chooses to really compete in the gaming industry, who will they compete with? Nintendo or Sony? I think they could have a chance of accomplishing something in the portable sector but I think what they're really going after is something simpler.. like an extension of what they're already doing.



    For instance, once their "Mini OX X" is out on a few products, they can create a market where 3'd party developers can make games for their devices, such as iPod 5G, iPod touch, iPhone, iTV etc, and let the games be purchased easily through the iTunes store. The games will be developed with Apple's API. Plus with all Apple's patents we've seen the last year they could offer interesting platforms for developers, and a huge install base.



    I don't think Apple will join the game industry as we know it today, but rather make it an extension of the iTunes games model we see today.
  • Reply 19 of 211
    The video game market is a market Apple should just stay away from. Stick with Films and music. Games would kill them. Unless they bought Nintendo or Sony. Then it's a different story. Both mergers would be nice but the Apple/Disney /Nintendo combination would be pretty scary for the competition.
  • Reply 20 of 211
    Buddy is out to lunch.

    Smoke grass write reports get paid for being an analyst?

    (sure, sign me up!)
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