Apple Arcade is well positioned to take a slice of booming gaming market, analyst says

Posted:
in General Discussion
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
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
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Comments

  • Reply 1 of 27
    BeatsBeats Posts: 3,073member
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    lkruppentropyswilliamlondonOferDAalseth
  • Reply 2 of 27
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 
    williamlondonlolliverravnorodomwatto_cobra
  • Reply 3 of 27
    BeatsBeats Posts: 3,073member
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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.
    edited June 13 lkruppmuthuk_vanalingamentropyswilliamlondonOfer
  • Reply 4 of 27
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 
    jcs2305williamlondonlolliverwatto_cobra
  • Reply 5 of 27
    BeatsBeats Posts: 3,073member
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 

    Yeah in response to where most of their App Store revenue is from.

    OBVIOUSLY.

    Nice try.
    muthuk_vanalingamentropyswilliamlondonOfer
  • Reply 6 of 27
    For the gazillionth time: mobile gaming revenue is now greater than PC/console gaming revenue COMBINED. 

    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.


    Fidonet127williamlondonlolliverAlex_Vjony0
  • Reply 7 of 27
    BeatsBeats Posts: 3,073member
    For the gazillionth time: mobile gaming revenue is now greater than PC/console gaming revenue COMBINED. 

    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.


    How much money is Texas Hold Em making huh?
    williamlondon
  • Reply 8 of 27
    Beats said:
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 

    Yeah in response to where most of their App Store revenue is from.

    OBVIOUSLY.

    Nice try.
    The ease at which you are dishonest is really remarkable. 

    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. 

    "It’s pretty obvious why the don’t. They feel resources are better spent on things. 

    This is going to blow your mind. Apple has way more information on what it’s customers do with its products and what features they want than you do. 
    Seriously, Apple has demonstrated it knows what’s it doing. Sorry your pet project doesn’t make the cut. I’m empathetic, I’d like Aperture to come back but it ain’t happening." 


    williamlondonBeats
  • Reply 9 of 27
    Beats said: How much money is Texas Hold Em making huh?
    When Microsoft purchased Activision, the only game that generated more $$ from that catalog than Candy Crush was Call of Duty. 
    williamlondonBeats
  • Reply 10 of 27
    What kills me is Apple is the only one allowed to create an iOS app to promote and use their own gaming platform, called Apple Arcade.  Yet no one else is allowed to create an iOS app to run their gaming platforms.  Apple came out with some ludicrous rules and policies that purposely hinder and stop anyone from trying to compete on Apple's iOS platform.  No wonder why Apple has lots of litigation going against them.  Talk about a company being unfair, well that would be Apple to a tee.
    williamlondon
  • Reply 11 of 27
    BeatsBeats Posts: 3,073member
    Beats said:
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 

    Yeah in response to where most of their App Store revenue is from.

    OBVIOUSLY.

    Nice try.
    The ease at which you are dishonest is really remarkable. 

    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. 

    "It’s pretty obvious why the don’t. They feel resources are better spent on things. 

    This is going to blow your mind. Apple has way more information on what it’s customers do with its products and what features they want than you do. 
    Seriously, Apple has demonstrated it knows what’s it doing. Sorry your pet project doesn’t make the cut. I’m empathetic, I’d like Aperture to come back but it ain’t happening." 



    Oh yeah you got mad that I said Apple makes most of App Store money from games. Which makes sense that Apple should take gaming seriously.

    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”. 

    Nice try taking it out of context though.


    Beats said: How much money is Texas Hold Em making huh?
    When Microsoft purchased Activision, the only game that generated more $$ from that catalog than Candy Crush was Call of Duty. 

    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. 
    edited June 13 williamlondonmuthuk_vanalingam
  • Reply 12 of 27
    Apple Arcade will do fine. The games are good and reasonable most people. AAA games they are not, however I have thought AAA games are resource heavy compared to what most people can develop and pay for. Vast majority of games those big teams and budget to make, yet are absolutely fun and engaging. Mobile is where the main market is. I’m tired of needing an external battery or charger for these intensive games. 

    Apple Arcade, I can pick up a good game, play it, or delete it when done. No ads, or in game purchases which everyone complains about. Part of a bundle and is a no brainer. 
    williamlondonlolliverjcs2305
  • Reply 13 of 27
    Beats said:
    Beats said:
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 

    Yeah in response to where most of their App Store revenue is from.

    OBVIOUSLY.

    Nice try.
    The ease at which you are dishonest is really remarkable. 

    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. 

    "It’s pretty obvious why the don’t. They feel resources are better spent on things. 

    This is going to blow your mind. Apple has way more information on what it’s customers do with its products and what features they want than you do. 
    Seriously, Apple has demonstrated it knows what’s it doing. Sorry your pet project doesn’t make the cut. I’m empathetic, I’d like Aperture to come back but it ain’t happening." 



    Oh yeah you got mad that I said Apple makes most of App Store money from games. Which makes sense that Apple should take gaming seriously.

    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”. 

    Nice try taking it out of context though.


    Finally we agree, what you said was indeed stupid. Glad you caught up. 

    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. 


    Beats
  • Reply 14 of 27
    BeatsBeats Posts: 3,073member
    Beats said:
    Beats said:
    Beats said:
    Beats said:
    Quibi  also had a “sticky” subscription model.

    If the content sucks, no one cares. 

    Change the headline to “APPLE is positioned to dominate the gaming market, but won’t”
    You also think Apple makes most of it's money from gaming...... so not exactly the best informed source on the subject. 

    No. Apple makes most of its money from iPhone hardware. They make most of App Store money from gaming.

    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. 

    Yeah in response to where most of their App Store revenue is from.

    OBVIOUSLY.

    Nice try.
    The ease at which you are dishonest is really remarkable. 

    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. 

    "It’s pretty obvious why the don’t. They feel resources are better spent on things. 

    This is going to blow your mind. Apple has way more information on what it’s customers do with its products and what features they want than you do. 
    Seriously, Apple has demonstrated it knows what’s it doing. Sorry your pet project doesn’t make the cut. I’m empathetic, I’d like Aperture to come back but it ain’t happening." 



    Oh yeah you got mad that I said Apple makes most of App Store money from games. Which makes sense that Apple should take gaming seriously.

    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”. 

    Nice try taking it out of context though.


    Finally we agree, what you said was indeed stupid. Glad you caught up. 

    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. 


    You’re mad that Apple makes huge amounts of money from gaming. Your argument was that it wasn’t worth chasing more gaming money. No one on AI thinks gaming makes more money than hardware. What a joke. 
    muthuk_vanalingam
  • Reply 15 of 27
    BeatsBeats Posts: 3,073member
    Apple Arcade will do fine. The games are good and reasonable most people. AAA games they are not, however I have thought AAA games are resource heavy compared to what most people can develop and pay for. Vast majority of games those big teams and budget to make, yet are absolutely fun and engaging. Mobile is where the main market is. I’m tired of needing an external battery or charger for these intensive games. 

    Apple Arcade, I can pick up a good game, play it, or delete it when done. No ads, or in game purchases which everyone complains about. Part of a bundle and is a no brainer. 

    The issue is that Apple Arcade games are required to support iPhone 7. So that new M2 chip and A16 chip Apple will brag about will NOT be utilized fully.

    Also most of the games aren’t exclusive either. It’s really pathetic. Didn’t even get the TV+ treatment. 
  • Reply 16 of 27
    Beats said:
    Apple Arcade will do fine. The games are good and reasonable most people. AAA games they are not, however I have thought AAA games are resource heavy compared to what most people can develop and pay for. Vast majority of games those big teams and budget to make, yet are absolutely fun and engaging. Mobile is where the main market is. I’m tired of needing an external battery or charger for these intensive games. 

    Apple Arcade, I can pick up a good game, play it, or delete it when done. No ads, or in game purchases which everyone complains about. Part of a bundle and is a no brainer. 

    The issue is that Apple Arcade games are required to support iPhone 7. So that new M2 chip and A16 chip Apple will brag about will NOT be utilized fully.

    Also most of the games aren’t exclusive either. It’s really pathetic. Didn’t even get the TV+ treatment. 
    I don't think you understand what market, or aims that Apple is going for. Apple has the stats behind what they are doing. For our family and many other families I suspect, and specially those with bundles, Apple Arcade works great. The new chips are not in consumer hands, why do you think they would be fully utilized by a game? Most games will not fully utilize the chips anyhow. How many of the top 10 or 100 iOS games fully utilize all of a chip? How do you know the game is fully utilizes all of a chip? How many people know or care that a game fully utilizes a chip?
  • Reply 17 of 27
    BeatsBeats Posts: 3,073member
    Beats said:
    Apple Arcade will do fine. The games are good and reasonable most people. AAA games they are not, however I have thought AAA games are resource heavy compared to what most people can develop and pay for. Vast majority of games those big teams and budget to make, yet are absolutely fun and engaging. Mobile is where the main market is. I’m tired of needing an external battery or charger for these intensive games. 

    Apple Arcade, I can pick up a good game, play it, or delete it when done. No ads, or in game purchases which everyone complains about. Part of a bundle and is a no brainer. 

    The issue is that Apple Arcade games are required to support iPhone 7. So that new M2 chip and A16 chip Apple will brag about will NOT be utilized fully.

    Also most of the games aren’t exclusive either. It’s really pathetic. Didn’t even get the TV+ treatment. 
    I don't think you understand what market, or aims that Apple is going for. Apple has the stats behind what they are doing. For our family and many other families I suspect, and specially those with bundles, Apple Arcade works great. The new chips are not in consumer hands, why do you think they would be fully utilized by a game? Most games will not fully utilize the chips anyhow. How many of the top 10 or 100 iOS games fully utilize all of a chip? How do you know the game is fully utilizes all of a chip? How many people know or care that a game fully utilizes a chip?

    How do I know Arcade games don’t fully utilize new hardware? Because the games are required to run on half-decade old hardware. Apple COULD announce first party or exclusive games for M2 that won’t run on iPhone 7 (Apple Arcade runs on iPhone 6S also but I don’t think they’re required to anymore).

    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.
    muthuk_vanalingam
  • Reply 18 of 27
    Fidonet127Fidonet127 Posts: 400member
    You skipped over my questions. How many iOS games in the top ten or top 100 fully utilize a chip? How do you know that game fully utilized a chip? How many people care a game fully utilized a chip?

    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. 
  • Reply 19 of 27
    crowleycrowley Posts: 10,453member
    Beats said:

    How do I know Arcade games don’t fully utilize new hardware? Because the games are required to run on half-decade old hardware. 
    You do realise that games have graphical settings that can run the gamut from ultra low to ultra high, right?  The games you play likely don't look the same game on an iPhone 7 as they do on an iPhone 13.  Resolution for one.

    e.g. here's Red Dead Redemption 2 PC on minimum settings compared to maximum.  You may notice a few differences.



    Beats said:

    Imagine Sony showing off a PS4 game while talking about how advanced the PS5 is?
    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.
    edited June 14 Fidonet127roundaboutnow
  • Reply 20 of 27
    Beats said: 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? 
    Not sure why you would think it "fell into their lap" when the mobile gaming market didn't really exist prior to the iPhone. Development of the App Store was one contributing factor. Development of the A series chips and their dominant position in terms of graphics performance is another. Development of Metal (available on iOS before being available on Mac) is yet another. 
    Beats
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