Apple Rumored To Invest Over $500M Into Apple Arcade Game Subscription Service
Apple announced in March plans to launch Apple Arcade, a game subscription service that will feature over 100 new and exclusive games, including original releases from renowned creators such as Hironobu Sakaguchi, who is best known for creating the Final Fantasy series. To ensure it has the best possible chance of succeeding, Apple will reportedly pour hundreds of millions of dollars into the venture.
Part of the reason for the hefty investment is because Apple has lofty aspirations. Apple not only wants to launch a game subscription service, it is aiming to "redefine games," with a selection of curated titles based on originality, quality, creativity, fun, and the overall appeal to players of all ages.
"Apple is not just handpicking the games in Apple Arcade, but also contributing to the development costs and working closely with creators to bring the games to life. Made by some of the most critically acclaimed game developers in the world, Apple Arcade games will entertain customers with incredibly fun gameplay and immersive stories, while capturing imaginations with original art and music," Apple says.
According to a paywalled Financial Times report, Apple's total investment into Apple Arcade could exceed half a billion dollars at launch. Several people involved in the project's development told the outlet that Apple is spending several million dollars each on most of the more than 100 games that will serve as launch titles for the service.
That kind of money adds up in a hurry, and as time goes on, it's feasible that Apple could throw even more dollars at the venture. It's an interesting proposition, and obviously a risky one, particularly with Apple's focus on indie games.
The risk also has the potential of a gigantic reward. Gaming is big business, and practically everyone these days owns a mobile device, be it a smartphone or tablet (or both). One of the appeals of Apple Arcade is that it is an all-you-can-play affair, for the cost of a subscription. Apple has not announced pricing yet, but did confirm that Apple Arcade will offer access for up to six family members (which probably means tiered pricing, similar to streaming music services).
In addition, Apple Arcade will have no ads and no in-app purchases, along with the ability to play offline. If the pricing is right and the games are compelling, Apple could have a huge business venture on its hands, and not a moment too soon—global smartphone sales have seen a slowdown in growth over the past couple of quarters.
Gaming, meanwhile, is more lucrative than ever—to the point where even a free-to-play game like Fortnite can generate over a billion dollars, albeit through in-app purchases. While Apple Arcade will lack that sort of thing, there is the potential for a subscription service to be a big money maker. It could also draw more users into the iOS ecosystem, spurring iPhone and iPad sales in the process.
Apple Arcade is set to launch this fall in more than 150 countries, accessible through a new tab on the App Store across iOS, macOS, and tvOS.