Apple is apparently set to launch a games-subscription service. The tech giant has not commented, but multiple sources claim it has been talking to publishers since last year about a Netflix-type offering for games.
How would it work and why now? CGTN’s Phil Lavelle reported from Los Angeles.
Technology giant, Apple, is reportedly set to launch a games subscription service.
The company doesn’t comment on speculation, but multiple sources have reportedly talked of the world’s most valuable company having been in discussion with games developers since late last year about a model which would allow users to effectively rent games.
It’s reported that it would run along the same lines as Netflix or Spotify, where users pay a fixed monthly fee and get access to a catalog of TV and films or music, respectively.
It’s not a big surprise, said Samson Amore, Technology Reporter at the Los Angeles Business Journal who points out that Apple is increasingly relying on the services aspect of its business: “I think Apple is getting into a lot of areas that don’t rely solely on the iPhone”, he told CGTN. “I think the iPhone X is really expensive right now and people are trying to hang onto it as long as they can without replacing it and that means Apple’s revenue is gonna slow a little so they’re trying to find a way to supplement that.”
The company has increasingly been looking to other sources of revenue after a slowdown in iPhone sales. Fewer customers are upgrading their phones annually as prices for most models increase (last year, Apple launched its most expensive models ever) and many are opting to take advantage of Apple’s battery replacement program. Apple has also seen demand for iPhones fall in China – a crucial market.
But Apple has been enjoying a huge boom in its services division. Services are elements that customers pay for on either a continuous model (like a monthly payment for iCloud storage, Apple Music streaming or Apple Care insurance) or one off payments (like purchases through the App Store, iTunes Store or Apple Pay.)
“They know investors really love subscriptions.. subscriptions really get investors going when it comes to putting more money into acquisitions or things like that” Samson added.
During the first fiscal quarter of 2019, Apple’s services segment generated $10.9 billion in revenue. That’s up more than a billion dollars from the same period 12 months earlier.
The App Store itself made over a billion dollars during the 2018 holiday season, with $322 million in just one day: New Years Day.
Apple is also reportedly about to launch a news subscription service along similar lines – with some claiming it could be launched as early as March (Apple typically announces its big software news in June at an event called WWDC).
But when it comes to games, it’s entering an already busy market. Both Microsoft and Sony have the hardcore gaming market sewn up with their Xbox Game Pass and Playstation Now services and Nintendo also has a big presence in the market, thanks to the Switch console which targets both hardcore gamers and those who just dip in and out.
Nevertheless, Apple’s customers have one thing in common: they almost certainly own either an iPhone or an iPad (or both) which gives Apple a bit of an edge, explained Ray Carsillo, a video games journalist. “They would get a whole new section of gamers that are untapped and are waiting to be catered to”, he told CGTN. “I think that the impact would be seen on what kinds of exclusive games they get. The only way that this would work – and of course, Apple still exploring options, would be what kind of games they can offer on their service exclusively.. What makes Micosoft’s X-Box GamePass and Sony’s Playstation Now so successful are the exclusive games they have in their library. If Apple can lure people to develop things exclusively for Apple TV, for the iPhone, for the iPad, suddenly this becomes a more viable service. If they can’t get the games, the impact will be negligible.”
And so the company that told the world 12 years ago it had reinvented the phone now hopes to – apparently – reinvent the gaming market. It has its work cut out – but it also has more money than most other companies and some small countries. If anyone is able to do it successfully, it’s likely to be Apple.