Apple Arcade could increase the rank of players in video games. (MENAFN – AFP) Apple’s entry into low-cost online games is expected to bring a new set of consumers into gaming and potentially reshape the multibillion-dollar market.
Apple Arcade, which launches Thursday, runs a trend of subscriber-played video games instead of being purchased as downloads or disks, and its $4.99 monthly price could wind up boosting player ranks. “My hunch is that it’s great for the general industry,” said Mat Piscatella, executive director of games for the NPD Group.
Apple Arcade could increase the rank of players in video games
“Apple Arcade could eat in free-to-play titles, or it could expand the market as a whole and attract many new players who have not yet been drawn to pay for mobile content.” Apple Arcade differs from rivals by offering unlimited access at a flat monthly price to over 100 exclusive games uninterrupted by ads or virtual goods hawking.
“The games themselves have no buying mechanics in-game; instead, there is a beginning, middle, and end,” said Michael Pachter, managing director of Wedbush Securities Equity Research. “That’s a different kind of game than free-to-play, so I definitely think there’s an audience.”
– Converting phone owners –
According to analysts, Arcade fits in with a subscription model that is gaining traction.
Console competitors Xbox and PlayStation are offering subscription services, while in November Google is set to launch a Stadia streaming play service. “The ancient model was paid for downloading, but when free-to-play was invented that died,” Pachter said.
“(Arcade) poses little threat to the conventional games business and is likely to convert some mobile phone owners into gamers over time.” According to the Entertainment Software Association and The NPD Group, the US video game industry generated record revenue of $43.4 billion in 2018.
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A disadvantage for Arcade is that it does not support games that can be played on popular consoles or personal computers powered by Windows, Moor Insights & Strategy analyst Patrick Moorhead said.
Game makers also face the challenge of tailoring each title to play equally well on different devices from Apple, which is tougher than creating software for one type of hardware such as a popular console.
Details of what incentives or revenue shares Apple provides to developers of games have not been released. “Apple is taking advantage of its devices ‘ power to attract developers for a share of the $5 monthly fee, and by participating the early providers will make a good coin,” Pachter said.
Gameloft’s Alexandre De Rochefort, a games studio for Apple Arcade, declined to discuss revenue sharing but said it would likely be “a valuable initiative for Gameloft, our partners, and our players” as the gaming shift economy.
“On the mobile side, we think the business model of free-to-play has come close to maturity,” said De Rochefort.
“If you look at what’s happening in music, movies, and TV shows, the subscription business model is becoming very popular and somehow the gaming industry is still a little behind on this topic. It’s great for the industry to have new alternatives, and we’re convinced that the subscription-based model will bring new experiences to new players.”
– Gen Z –
Apple promised to play new, exclusive Arcade games across iPhone, iPad, iPod touch, Mac and Apple TV, attracting potentially younger audiences.
“I think the service will appeal to parents and a new wave of Gen Z consumers identifying with unique and authentic smartphone content experiences,” said Piers Harding-Rolls, head of games research at IHS Markit Technology.
“These consumers may also be tempted to buy the cheaper and more youthful iPhone 11 into Apple’s ecosystem.” Apple will start shipping new iPhone 11 models on Friday as it emphasizes television streaming and gaming services to sew off reliance on hardware sales.
Price seemed to be a key consideration as the tech giant lowered the iPhone’s entrance-level price to $699. “This service strategy for games overall supports the devices ecosystem of Apple,” said Harding-Rolls.
“It will attract a niche share of the over one billion active iOS device user-base and, given the huge audience of Apple that is likely to result in a games subscription service larger than most that came before.”