April 19, 2019

Apple set to splurge 'more than $500m' on Arcade gaming service

17 April 2019, 12:35 | Cameron Gross

Sonic Racing from SEGA on Arcade. Apple

Sonic Racing from SEGA on Arcade.                  Apple

A new report from the Financial Times claims Apple is throwing big bucks to set up a robust Apple Arcade library, potentially even enticing developers with bonuses to make their titles temporary exclusives to the service before rolling out versions for Android.

Apple plans to spend hundreds of millions of dollars on its upcoming Arcade game subscription service, with its total budget likely exceeding $500 million, according to a report in the Financial Times.

It also reflects the increasing competition in Silicon Valley for exclusive rights to the best content, as the iPhone maker bids against other new games platforms from Google and Tencent, as well as the console makers Nintendo, Sony and Microsoft. Besides funding efforts, Apple is also believed to be assisting with engineering and helping developers deploy their game engines across Apple's operating systems.

Apple is reportedly spending a lot in the race to secure games for Apple Arcade. In exchange, they'll be able to access a slew of premium video games from both well-established and independent game developers - games that will include both new and exclusive titles.

Last month Apple unveiled its Apple Arcade gaming service, which is Apple's planned subscription-based Netflix for games - where Apple users can pay a monthly fee and play as many games on Arcade as they want.

There is no firm launch dates for the Arcade yet, but it will launch sometime in Fall 2019. It seems that the Cupertino giant doesn't see these platforms as directly competing with Apple Arcade, at least not in the same way as Google Stadia and other subscription services. In addition to that, if the users do not provide explicit consent, Arcade games will not be allowed to share any of their data with the publishers. An estimate by HSBC foresees Apple's gaming service becoming larger than the TV+ service by 2022, and becoming a $4.5 billion business by 2024.

Apple Arcade will launch later this year, although no prices have yet been announced. HSBC analysts assumed Apple is looking forward to make more or less $400 million in Arcade revenue in 2020 and from $2.7B to $3 billion, by 2022.

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