In terms of new entrants to the game space, Google gets most of the attention with its Stadia streaming game service.\u00a0 Apple launched its $5 a month Apple Arcade subscription service in September to little fanfare.<\/p>\n
Apple Arcade is a modest service, but it is also an indication of where Apple is headed.\u00a0 Apple is focused on more high-end consumer services, including content that is curated by Apple.<\/p>\n
Apple has been primarily known as a hardware company.\u00a0 In 2007 the name was changed from Apple Computer to Apple Inc.\u00a0 However, this was mainly to highlight the shift in the company from computers to consumer electronic devices.<\/p>\n
The iPhone has been extremely successful, but its growth is definitely slowing.\u00a0 In hardware, Apple is seeing solid growth in what was lagging iPad sales, as well as wearables like watches and headphones.\u00a0 However, the biggest growth area for the company is its services.<\/p>\n
In the latest quarter ending 9\/30\/2019 (the end of Apple\u2019s 2019 fiscal year), products accounted for about 80% of revenue while services were 20%.\u00a0 However, this ratio is double what it was for 2015.\u00a0 Furthermore, product revenue in 2019 showed only 1% growth over fiscal 2015.\u00a0 Meanwhile, service revenue grew by 110%.<\/p>\n
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Of course, the leading service for Apple has been selling applications on the App Store.\u00a0 Games are far and away the leading application for the App Store.<\/p>\n
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In that sense, Apple is already a leader in the game space.\u00a0 Nevertheless, the mobile game space has been a mess.\u00a0 It is dominated by money-grabbing products and advertising.\u00a0 It is not a place for serious gamers.<\/p>\n
The number of games on the App Store is now measured in the hundreds of thousands, soon to be millions.\u00a0 Apple has been happy taking a 30% share of each game.\u00a0 However, lack of serious curation means consumers are rightly leery of product quality.<\/p>\n
Apple is making serious investments in content creation with a focus on quality over quantity. \u00a0Right now, the attention has been on the programming for the launch of Apple TV Plus this week.\u00a0 The Morning Show, with stars Steve Carrell, Reese Witherspoon, and Jennifer Aniston cost a reported $150 million to develop.<\/p>\n
Apple Arcade is a much more modest program with about 100 carefully selected titles.\u00a0 On its own, it is nothing worth noting.\u00a0 As an indication of where Apple is headed it is extremely important.<\/p>\n
On its balance sheet, Apple currently shows about $100 billion in cash and marketable securities.\u00a0 This is a huge war chest.\u00a0 It just depends on how Apple chooses to spend it.<\/p>\n
Many people laugh at the notation of Apple trying to seriously compete in the game space.\u00a0 In 2007, DFC clients included companies like Nokia.\u00a0 The established cellphone market laughed at Apple\u2019s arrogance thinking they could so easily enter the market.\u00a0 The ones still in business are not laughing now.<\/p>\n
Apple sales a lot of devices and has multiple ways to bundle content whether it is music, video or games.\u00a0 In many ways, games are easier than trying to compete with the likes of Netflix and Disney in the film and video space.<\/p>\n
Entering the game space will be a long-term play for Apple.\u00a0 Right now they are making baby steps.\u00a0 However, it is one giant baby.<\/p>\n
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