Courtesy of Apple
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has been called out by analysts and Barron’s for its rollout of Apple Arcade, a forthcoming subscription service distinguished as much by its lack of specifics than by what it can do to bolster the company’s fledgling services division.
The chief criticism is that Apple (ticker: AAPL) should be dipping into its prodigious coffers—$130 billion in net cash—to snap up content. My colleague Tae Kim suggested the bold stroke of acquiring
Nintendo
(7974.Japan) in a column in January before Apple announced Arcade in late March.
A new report from the Financial Times says Apple plans to spend more than $500 million on its gaming initiative. Many of its games will have budgets in the millions, sources told the FT. Apple did not immediately respond to an email message seeking comment. (Apple Chief Executive Tim Cook has not ruled out a big acquisition as the company dives deeper into subscription services.)
Apple’s gaming service, expected in the fall for an undisclosed price, will lean heavily on indie-style videogames from smaller development teams under an all-you-can-eat platform that has some analysts pegging it as a niche service. Budgets for videogames, especially those for consoles and personal computers, typically run into the tens of millions of dollars.
For now, what we know is that Apple is promising 100 exclusive games from developers such as Annapurna Interactive, Bossa Studios, and Cartoon Network that would be available only on iPhone, iPad, Macintosh, and Apple TV.
But Apple faces heavyweight competition from its big tech peers vying for a slice of the $135 billion global gaming market. (The market is expected to grow to $174 billion by 2021, according to market research firm Newzoo.)
Alphabet
’s
(GOOGL) Google is developing Google Stadia, a cloud-gaming service that will launch this year. It lets gamers play streamed games on their smartphones, PCs, and TVs without a separate console.
(MSFT) and
Nvidia
(NVDA), meanwhile, are working on their own cloud-gaming services called Project xCloud and GeForce NOW, respectively.
Apple also faces competition from
Tencent
(0700.Hong Kong), Nintendo, and
Sony
(6758.Japan).
