[ad_1]
Joost van Dreunen is a researcher in the gaming industry and founder of SuperData Research.
Apple is turning away from the tree. A little.
While the gaming industry was traditionally vacant after the week that followed GDC, Apple apparently did not receive the memo and started Monday with a historic announcement: it launches a subscription service to mobile games.
At its presentation this week, the consumer electronics giant has announced several new content services including, and most interesting, Apple Arcade. Subscription service is a departure from what has allowed Apple to become a real heavyweight in the sector: by offering premium titles at a fixed monthly rate, it is losing the free revenue that is the basis of its success . Nevertheless, Apple is looking to leverage its success in mobile gaming by adding a new business model and playing a bigger role outside of mobile.
If you read my article about the Stadia ad by Google, you might have guessed that Apple's ad would be more concrete. He focused on the content and a particular creative vision that was completely lacking in Google. Exclusive and exciting content is what drives people to adopt a platform or spend more time on it. And, FWIW, his announcement gives credence to two of my predictions: first, subscriptions would become an important part of the industry, and secondly, there would be a greater focus on child-friendly content and family-friendly content.
Its content strategy is just about the money. Premium Titles, the kind that make do notRelentlessly, you have made money and been buried so deeply in the digital offering of the industry that they have become a novelty again. The persistence of multiplayer gaming mechanisms to create positive network effects that can be monetized is actually a technical approach to content. But he also dropped a lot of the narrative-based solo experiences that many of us loved while growing up.
Apple's strategy has several strong components.
First, in a market where content has become an absolute commodity, demand for higher quality securities is increasing. User acquisition costs have skyrocketed, but consumer spending has not kept pace. No amount of intelligent tools and AU algorithms can solve the problem of discovery in an almost infinite mobile game offer. With the main checkpoints largely controlled by a handful of companies, it is now impossible to spend more than the titans of mobile gaming. By creating a subscription program, Apple allows newcomers who create a different experience to connect with consumers.
By presenting a selection of pretty games, Apple defines its own identity. It also adds more credibility to its holistic family-centered approach "privacy is a basic human right". In 2015, Apple had already created a category called "Pay once and play" category on its App Store offering a selection of premium titles free of madness micro-transactions. In doing so, Apple has also defined a clear creative program. According to his teasers videos:
"There are no weapons, no murder, we tell a story. We are almost the opposite of the current market. Most people would not usually see it if Apple Arcade did not exist. "
Money
Despite all the appreciation on the ground for game design and great gaming experiences, Apple has not built its Arcade service out of the kindness of its heart. Since its device sales began to slow down and stop disclosing its numbers, Apple has been looking for a way to continue growing. This will generate value in at least two ways.
First, he will add to his service revenue goals. The game is more important than its two combined musical offers and Apple is about to generate a $ 50 billion service revenue, as promised. This growth in services will offset the inevitable saturation of terminals and satisfy investors.
Second, like many other technology companies, Apple has discovered that recurring revenue drives higher valuation on Wall Street than transaction-generated revenue. Not surprisingly, along with several new content services, she announces a credit card. It is a retention tool that will undoubtedly enhance the company's ability to keep people married with its platform.
It all depends, of course, on how Apple intends to pay content creators. According to rumors, at the GDC campfire last week, Google offered developers 30/70 revenue and advertising revenue. I have not confirmed it yet, but it offers at least a long-term benefit. We have already seen what Apple thought about the payment of information services: its 50/50 split was not satisfactory. Like Google, Apple is reducing the number of content creators to become a cost-priced line item among a small number of elaborate titles. This means that Apple can make or break the success of a studio overnight.
Finally, here's why it works: Average household spending tends to be highest for platforms with the highest penetration. That's why Sony, Microsoft and Steam have managed to do it. And why newcomers like Discord and Epic are going through a more difficult period despite the general dynamism of the market.
Apple, on the other hand, has a huge advantage here because of its huge installation base. With more than one billion devices on the market already using credit cards of all kinds, a subscription to a $ 10 a month game is a no-brainer. And, apparently, this opens the door for Apple TV to become more of a competitor of PCs and consoles in the living room.
Will it work?
Yes, Apple is big. And, yes, he has this incredible ability to give everything that he touches an incredible appearance. And since gambling has become common in recent years, there is a growing demand for titles that are less for hardcore gamers, but more for parents, parents, and children.
However, the general public he targets with the subscription service spends much less. If you combine this with the economy of one of the hundred titles behind a wall of subscriptions, there will probably be only a few big winners here. On the basis of revenue, it is unlikely that a title per subscription will outperform a free game, which is obviously Apple's goal. Apple Arcade is a subsidized content strategy in which Apple plays a powerful role in its preservation. We'll see soon enough if it's as good for tracking titles as it is for building phones.
The glaring omissions of its announced services today are the prices and the budget that Apple plans to spend. As we have seen with Netflix, HBO and Amazon, it costs a small fortune to launch it. The size of the projection that she will succeed depends on how much money she plans to spend. And to make it take off and make it soar, he will have to search his pockets.
Nevertheless, Wall Street is excited and is starting to look beyond the $ 50 million promised service revenue to double that figure. I say we give Apple a chance to prove itself in this new territory. We often hear about the ambition of a platform to be more meaningful in everyone's life. Today, his promise is that "Apple Arcade aims to give developers the freedom to come up with really interesting ideas that could never have been made by the general public."
Hope this becomes more exciting than that.
Last week was entirely devoted to Google's stadiums and now to Apple Arcade. Should the holders of the platform in place in the games be worried?
As owners, Sony, Microsoft, Nintendo and Steam have not yet much to fear. Average spending per household is generally higher among platforms with a larger facility base. Indeed, Apple has a ton of devices, but its target audience is (a) limited in its monthly expenses because of subscription fees and (b) different from the audiences that the incumbents attract. However, publishers who disproportionately rely on mobile audiences (for example, Zynga, Rovio, Supercell, Niantic) may find that the cost of transactions increases.
What is the link with the stages of Google?
Their approach is distinctly different: Apple offers a selective premium offer and Google offers an offer partially based on ads. This difference in income model makes their ultimate services extremely different. What stands out is that both companies focus on interoperability. Both promised that users could save their game, change devices and continue where they left off. This makes the games much more similar to the ones that Spotify and Netflix consumers are used to and that other platforms do not offer (with the possible exception of the Nintendo switch but which is only one device). ).
What is the importance for small and medium enterprises?
Apple's investment offers a chance to the middle class of mobile gaming to flourish, even if it is currently in the shadow of the top publishers. However, Apple has never been transparent in communicating its decisions and changes to its developer community (to the chagrin of major publishers particularly accustomed to receiving VIP treatment).
[ad_2]
Source link