Apple’s push to focus more on software services may extend to games, according to a report by Cheddar. The report cites five people familiar with the matter who claim that Apple has been talking to game developers about bringing games into a subscription bundle, and it cites two people who say Apple is also exploring the possibility of launching a game-publishing arm.
The sources said that Apple was talking with developers about its plans in the second half of 2018. No details were provided about the nature of the service or what kinds of games would be included. It’s difficult to imagine an elegant way of including free-to-play games, which make money through in-app-purchases for game-related services and add-on content, in a paid subscription package.
But while games with that model are prominent on Apple’s iOS App Store, there are still several popular and critically acclaimed games with an up-front cost model—Alto’s Odyssey, Civilization VI, Galaxy of Pen and Paper, Stardew Valley, Baldur’s Gate, Cat Quest, Alien: Blackout, Battleheart 2, and Old Man’s Journey, to name just a few.
The importance of a spot in the App Store is especially true for paid games as opposed to free-to-play games. That’s because free-to-play games are a better fit for the alternative or additive path of driving user acquisition and revenue with advertising on platforms like Facebook. Paid games tend to sell for only a couple of dollars, and that means the average lifetime value of a player is less than the cost of attracting that player through advertising. On the other hand, players who spend dozens or even hundreds of dollars on in-app purchases in free-to-play games are spending enough to justify the user-acquisition cost.
All this is to say that Apple could create real value for the games it publishes simply because it owns the platform and can promote those games in a way that ensures their success.
As we’ve reported many times before, Apple is seeking aggressive expansion in the services part of its business, which includes the App Store, software subscriptions, iCloud, AppleCare, and Apple Music, among other things. It had previously met with iOS software developers to pitch them the idea of launching their own subscription services for powerful productivity apps and the like, and it plans to launch a Netflix competitor for streaming TV and movie content in the near future.
iOS is one of the world’s most vibrant gaming platforms, but Apple’s other platforms like the Mac and the Apple TV have floundered for game players. Consensus in those ecosystems is that Apple has simply not made games on those platforms a big enough priority. That could improve on the Mac, at least, with Marzipan, an internal project at Apple that seeks to make it easier for app developers to make games that work on both iPhones and Macs. A subscription service that would give players access to popular, premium games that work on both their phones and laptops could make Apple platforms more attractive for players.