Apple is opening its bank accounts and is set to spend millions of dollars to get exclusive games for the Arcade gaming service.
This way Apple proves the company is taking video games very seriously and that they may bring big profits in the future. The media is now focusing on the TV Streaming service but video games might prove to be a very important source of income for Apple compared to TV series.
A few people from inside Apple told Financial Times that Apple wants to spend a few hundreds of millions of dollars on the 100 games that will be included in the Arcade service. This means a budget of more than $500 million.
With this massive investment, Apple is also increasing the competition on the video makes market where big companies such as Sony, Microsoft, Nintendo now have to rival with Google, Tencent and Apple to get exclusive games.
Some market analysts say that Apple’s revenue from the Arcade gaming platform might be worth billions in just a few years, but in order to make a stand on the gaming market Apple has to invest a lot of money without having having any guarantees that the platform will be a success.
Apple gives developers another reason to agree to publish their games exclusively on the Apple Arcade platform or to launch it later for Xbox, Android and other platforms. Some agreements might specify that games can only be available on the Apple Arcade platform and a few months later they can be released for PC or gaming consoles.
Basically, the money offered by Apple should cover the development costs of an indie game. Some of the brands that announced games for Apple Arcade are Sonic the Hedgehog, Cartoon Network and Lego. Also, independent video games developers such as Annapurna Interactive and Bossa Studios also signed contracts with Apple.
If for TV Apple is focusing on big Hollywood names such as Oprah Winfrey or Steven Spielberg, things are different when it comes to gaming as Apple is focusing on indie games, which are smaller games that come with a different approach.
The Apple Arcade gaming platform will be available later this year. Apple has not revealed the price of the TV+ or Arcade subscription but market analysts estimate that Apple Arcade might earn approximately $370 million in revenue in 2020, $2.7 billion in 2022 and $4.5 billion by 2024. Analysts suggests that by 2024 the Apple Arcade platform will have 29 million active users paying $12,99 a month for a subscription.
The Apple TV service might earn up to $4.1 billion by 2024 and Apple News+ is estimated to earn $2.7 billion.
The thing with the Arcade platform is that Apple has to convince mobile games developers to release their games for the iOS platform first, and later for Android. Right now, because Android has a much bigger market share, games developers choose to launch their games for both platforms at the same time.