Apple Mulls Subscription Service For Gaming

Apple could be starting a subscription service for gaming, according to reports. It would operate like a streaming service, where users pay a fee to get access to many different titles.

Apple began discussions with game developers in the latter half of 2018, according to the people familiar with the plans, who all declined to be identified.

There’s no word yet on how much the service would cost, or the types of games Apple would offer. Because the service is so early in the development stage, there’s the possibility that the service might not even come to fruition.

However, the company has talked about becoming a publisher for developers, which would mean Apple would handle distribution, marketing and other costs tied to the enterprise of selling and promoting games. This could undercut fees that developers would normally pay to outside firms for similar services.

Mobile gaming is expected to continue to rise in popularity and to become a $100 billion industry by 2021.

“It’s a big enough market to move the needle for Apple,” said Gene Munster, a longtime Apple analyst and investing partner at Loup Ventures.

The service is mysterious to analysts because most of the games in the App Store are free. However, some are saying that Apple could put its focus on paid games and add those to a subscription, or add perks like coins to free games.

“The vast majority of revenue coming out of the App Store is games,” said Brandon Ross, an analyst at BTIG covering the video game industry. “Subscription has proven to be a successful way of monetizing on mobile. It is completely unproven in games except for some minor success from Microsoft, Sony and Electronic Arts.”

Currently, Apple takes 30 percent out of App Store purchases, but that fee gets cut in half after the first year of a subscription.

Apple Services are the fastest growing segment of its business, accounting for $39.75 billion in revenue for the 2018 fiscal year. CEO Tim Cook said he wanted to raise the company’s Services business to $50 billion by 2020.