Apple spending $500 million over 'Arcade' gaming service

Apple Arcade games

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, where seven-figure budgets or more tend to be par for the course. According to a report by the Financial Times, Apple's budget for its new gaming subscription is likely to be $500 million in a bid to get it up and running. Apple claimed that it would give customers "the freedom to try any game from its handpicked collection of titles that are all-you-can-play", in addition to having "no ads, ad tracking or additional purchases", all with an added emphasis on user privacy.

But games would stay exclusive to Apple Arcade for just a few months, according to reports, after which developers would be able to release them on computers or other gaming consoles such as Sony's PlayStation or Nintendo's Switch. While some were concerned that Apple was going to simply hand-pick its own exclusive development partners by invitation only, the company began inviting developers to apply for Apple Arcade a few days after the announcement, but the "application" process is really just an opportunity for game developers to put their titles up for Apple's consideration. The report states that these will be exclusive to Apple Arcade, and will not appear on other competing subscription services.

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It sounds promising, but clearly Apple needs a strong game portfolio for Arcade to be successful. The company is working with the gaming studios and developers to create these titles. Apple will offer "extra incentive" when the players will withhold the release of the game from Google's Android or Microsoft's Xbox game pass. They can download and play as many as they want across multiple Apple devices, either online or offline. 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.

Stadia builds on Google's "Project Stream" initiative, which let users play high-quality games in Google Chrome. 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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