Apple Is Building a New Product That Would Turn It Into a Gaming Juggernaut

The market is moving in a new direction.

Apple is making a big jump into the world of gaming.

A Cheddar report on Monday claimed the iPhone maker plans to create a subscription service that would work akin to a Netflix for games. Plans are still in the early stages, but the company held discussions with developers in the second half of last year to explore the options. Another idea suggested is Apple playing the role of publisher in partnership with select development studios.

The move comes amid wider talk about gaming-focused subscription services. Nintendo, Sony and Microsoft all offer paid online services for their video game consoles, with the latter two also offering services that provide access to a large catalog of games. Sony’s PlayStation Now grants players the ability to stream PS4, PS3 and PS2 games for $19.99 per month with the option to download select PS4 titles to the console. Microsoft’s Xbox Game Pass offers download-only games for $9.99 per month, with plans to release a streaming service called xCloud next year.

Apple is not a name traditionally associated with gaming, but the App Store has enabled easy access to casual games for millions of players. Newzoo predicts mobile app revenue will reach $139 billion by 2021, $106 billion of which will come from games alone. Top titles include Fortnite, The Sims Mobile and Pokémon GO.

fortnite
Fortnite.

The company has also made efforts on the hardware side with stronger graphics chips and broader support. Although most of its offerings have used the touch screen, Apple has developed a gaming controller specification to standardize inputs across the board, which it later brought to the Apple TV with the co-designed SteelSeries Nimbus. Apple has patented more advanced input methods, and its increased graphical capabilities on mobile led the company to compare its latest iPad Pro to the Xbox One S in terms of power.

Services is set to become a key area of growth for Apple in the coming years, as its hardware sales show reduced signs of growth. The area, which includes offerings like iCloud storage and the App Store, jumped from less than 10 percent of Apple’s revenue at the end of 2012 to nearly 16 percent in the fourth quarter of 2018. Morgan Stanley predicts 50 percent of iOS users will have an iCloud storage subscription by 2023, up from 30 percent today. Meanwhile, analyst Ming-Chi Kuo predicts Apple will sell fewer than 200 million iPhones this year amid a continuing plateau of sales:

Games could prove a difficult area for services growth, though. Apple TV developers have left the system in droves, pulling big names like Minecraft amid a lukewarm market. Valve co-founder Gabe Newell said in 2007 that the company would ask for advice but never “follow through on any of the things they say they’re going to do” to improve gaming. With such skepticism around these efforts, it could be hard to convince developers to give Apple another try.

Alto's Odyssey New Game for iPhone, iPad and Apple TV
Media via Epic Games, Mike Brown, Alto's Odyssey, Apple