September 16, 2019
Apple’s video game subscription service Arcade, due to unveil September 19, is based on an established model for casual mobile games — with a twist. Ordinarily, the games are free to download and play, but the companies make money with ads and sales of in-game purchases. Apple is charging $5 per month for those free games, but shedding the ads and digital add-ons. The question is if Apple can change an industry’s typical business model. Microsoft and Google have tried the subscription model, but for higher end games.
Bloomberg reports, “Apple being Apple, this just might work — or not.” Wall Street’s Apple experts don’t want to commit to a point of view: “no one seems confident … but few predict it will fail.”
Over the years, Apple has earned “a generally deserved reputation for transforming consumer behavior or making niche behaviors mainstream,” but Bloomberg isn’t sure that the company “can shape people’s habits at will.” It points out that Apple News Plus, which launched six months ago, hasn’t created many ripples.
According to App Annie, mobile video games generated three-quarters of the $100+ billion on apps that consumers buy annually from Apple, Android and other mobile marketplaces. Bloomberg adds, “Apple isn’t about to dump free video games from its App Store.” But if Arcade is viewed as “an add-on to an already big and successful model of free-to-play games,” Apple’s move may pay off.
Bloomberg reports, “Apple is reportedly spending hundreds of millions of dollars to secure video games for Arcade, and the money will free developers from plotting ways to squeeze extra nickels out of players.” The company is also carefully curating Arcade titles, and “many Apple device owners trust the company to give them convenient and fun video games for their five bucks a month.”
Google has already stated it will unveil a similar subscription game service for Android phones. If Arcade succeeds, says Bloomberg, “expect copycats.”