Apple Arcade is well positioned to take a slice of booming gaming market, analyst says
Apple Arcade is a unique offering among gaming services and is well-positioned to take advantage of the booming market, according to JP Morgan.
Credit: Apple
In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee gives a few thoughts on the rise of the Apple Arcade service. Chatterjee argues that the service has enough differentiation to stand out in the crowded market.
This is because Apple Arcade has a subscription model, which Chatterjee says is stickier. It's also a collection of exclusive titles, rather than aggregated content. Additionally, he said the simplicity of games adds to the overall potential market.
All of that bodes well for Services, the analyst points out. The global gaming market is expected to reach $360 billion by 2028. Mobile gaming will continue to expand beyond 50% of the mix that it already accounts for.
"We forecast Apple Arcade subscribers to expand rapidly, led by the ramp in popular titles, leading to an estimated 70 [million] subscribers by 2025 which by our estimate will lead to $1.2 [billion] in revenues for the service," the analyst wrote.
Apple Arcade is a service available across the company's lineup of products. It offers more than 200 gaming titles from both larger studios and indie developers, and costs $4.99 a month.
Chatterjee is maintaining his 12-month Apple of $200, based based on a price-to-earnings multiple of 30x on his 2023 earnings estimate of $6.73.
Read on AppleInsider
Credit: Apple
In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee gives a few thoughts on the rise of the Apple Arcade service. Chatterjee argues that the service has enough differentiation to stand out in the crowded market.
This is because Apple Arcade has a subscription model, which Chatterjee says is stickier. It's also a collection of exclusive titles, rather than aggregated content. Additionally, he said the simplicity of games adds to the overall potential market.
All of that bodes well for Services, the analyst points out. The global gaming market is expected to reach $360 billion by 2028. Mobile gaming will continue to expand beyond 50% of the mix that it already accounts for.
"We forecast Apple Arcade subscribers to expand rapidly, led by the ramp in popular titles, leading to an estimated 70 [million] subscribers by 2025 which by our estimate will lead to $1.2 [billion] in revenues for the service," the analyst wrote.
Apple Arcade is a service available across the company's lineup of products. It offers more than 200 gaming titles from both larger studios and indie developers, and costs $4.99 a month.
Chatterjee is maintaining his 12-month Apple of $200, based based on a price-to-earnings multiple of 30x on his 2023 earnings estimate of $6.73.
Read on AppleInsider
Comments
If the content sucks, no one cares.
Edit:
Because I know more people with bad reading comprehension will continue to reply:
I used the word “dominate” because Apple still has platforms they have barely set foot in like Mac, consoles and 1st party IPs. Apple Arcade is a joke compared to Nintendo, Microsoft etc.
When I say “Apple”, I literally mean Apple. Not EA, not Rovio, not Zynga.
Game Center has been garbage for over a year and Apple has ONE game on the App Store that no one even knows about.
Literal quote from you:
"Apple has also shown games have made them the most money and have created Apple Arcade."
There is no reading comprehension issue here. You said games make Apple the most money. Hop back in the clown car and move on.
OBVIOUSLY.
Nice try.
So if you're trying to argue that Apple can't be successful in gaming without AAA style games on Apple Arcade, you're arguing that the smaller market is more important than the larger market. You can still argue that you personally prefer AAA style games, but the business part of it can't really be argued. Mobile is now the dominant $$ market.
Here is the comment you were responded to, it was mine, it has nothing to do with the App Store. Literally not even mentioned. It was about why Apple isn't going to make a competitor to the UE.
I don’t think any AppleInsider regulars think Apple makes most of their money from gaming. That’s stupid. Have some respect. We all know Apple makes most money from iPhone which is why people here often criticize Apple. Also why critics call Apple a “one trick pony”.
This argument has valid points but it doesn’t address what we’re suggesting. Gaming on the App Store fell into Apple’s lap. It’s been 15 years of iPhone and apple has ONE game, Texas Hold ‘Em and no one even knows or cares about it. We’re saying Apple should take gaming seriously. Your argument is that 3rd parties are making Apple a ton of money. So what? Apple is completely missing the Mac gaming market and console market. If they can develop games and just take 20% market share of consoles and tie those games in to Mac this would create a snowball/halo effect that would trickle through every product category.
I don’t get this “it’s enough” argument. Android makes iOS gaming even less special because it runs the same games. Apple needs new, good, original content. That’s all we’re suggesting. We don’t care if Candy Crush or Zynga are killing it in sales.
As for the context, that was the full context. You just love talking out you arse.
Anyway, good luck with you feverish Apple gaming dreams.
Also most of the games aren’t exclusive either. It’s really pathetic. Didn’t even get the TV+ treatment.
So when Apple brags about graphics performance for gaming at keynotes, it’s useless. They even showed a game at WWDC 2022 that was announced for 2017 hardware when they were talking about how advanced the new hardware is. That was strange and just pathetic proof Apple doesn’t care for gaming on new systems. Imagine Sony showing off a PS4 game while talking about how advanced the PS5 is?
We’re not suggesting Apple take away your Candy Crush and 2D Apple Arcade games. We just wanna see Apple take advantage of new hardware.
you put forth this as a measurement of how good a game is. Now defend it. Why would a chip that has yet to come out to the public be fully utilized?
for me, a game is good if the graphics are good and the game is fun.
e.g. here's Red Dead Redemption 2 PC on minimum settings compared to maximum. You may notice a few differences.
Sony have been plenty showing off Horizon Forbidden West and God Of War: Ragnarok, both of which are major tentpole games for the PS5 and have also gotten (the former) or will get (the latter) a PS4 release. At a different graphical level obviously.
Imagine!
Honestly, I think you know jack shit about games for all the whining you do about it.