Report: Apple May Spend Over Half A Billion On Its Subscription Game Service

Report: Apple May Spend Over Half A Billion On Its Subscription Game Service

Sources say Apple is spending hundreds of millions of dollars, and may exceed half a billion dollars in total funding, for its upcoming Arcade game subscription service, the Financial Times reported this weekend.

While the company’s plans to move into streaming television and films (as well as news partnerships) have drawn the lion’s share of coverage, that tally would be a massive investment, covering half of Apple’s reported streaming budget of $1 billion.

Several sources told the Times that most of the more than 100 games planned for the service have budgets in the millions of dollars — a lot for mobile and the indie market Apple is targeting, but not extraordinary when compared against the video game industry writ large, where seven-figure budgets or more tend to be par for the course.

According to the Times report, some forecasters believe Apple’s push into gaming will deliver more subscription revenue than its streaming service—and thus the big-budget strategy is an attempt to blast its way into a crowded game market. Some developers are also signing on for lucrative deals with the company to keep their games exclusive to iOS for a period of at least “a few months”, meaning the titles would not initially be available on alternate platforms like Android or the Xbox and PlayStation game stores, the paper wrote.

From the Times:

Apple has not said how much it will charge subscribers for Arcade or TV+, but analysts at HSBC have estimated that Apple Arcade revenues will grow from $370m in 2020 to $2.7bn by 2022 and $4.5bn by 2024, by which time HSBC predicts it will have 29m users paying $12.99 each month. Those figures are greater than its revenue estimates for Apple TV+, at $2.6bn by 2022 and $4.1bn by 2024, and Apple News+, which it predicts will generate $1.7bn and $2.7bn respectively.

(Some developers were sceptical that Apple would be able to compete with well-established game publishers, the Times added, with one comparing the company’s plans to 2004 wine country flick Sideways instead of the blockbuster Marvel Cinematic Universe.)

Apple will be competing with Google’s Stadia and other game streaming services; Google has big plans with that service, like bringing console-quality games to some Android devices.

However, it has also scored some big-league partnerships, including the Sonic the Hedgehog franchise, Cartoon Network, Lego, Beneath a Steel Sky sequel Beyond a Steel Sky, and a number of others. One does wonder whether Apple is really dropping millions on titles like Hot Lava, a game about the floor being lava, but hey, that’s an unimaginably wealth company’s prerogative.

[Financial Times]