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Prediction: Apple Arcade may end up being a bigger winner for Apple than its TV service

Published Apr 14th, 2019 4:46PM EDT

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After formally unveiling the subscription-based video game service last month that it’s planning to launch this fall as part of a shift toward services and revenue-generating subscription packages, we got our first look this weekend at just how serious Apple is about Apple Arcade. Which still doesn’t have a launch date other than the understanding that it’s coming later this year, but it seems that the iPhone maker has decided to spend several hundred million dollars on more than 100 games, for a total spend of more than $500 million on this offering that users will pay a monthly fee for. In exchange, they’ll be able to access a slew of premium video games from both well-established and independent game developers — games that will include both new and exclusive titles.

The news that Apple is shelling out a total of more than half a billion dollars to launch Apple Arcade comes via a report from The Financial Times, which makes it clear how important the new games offering is to Apple in spite of the splashiness surrounding the rollout of Apple TV+. That’s the Netflix-like premium video service the company rolled out during the same media event last month in Cupertino.

Per the FT, quoting several unnamed sources familiar with the deals, Apple seems to be making enough of an up-front investment into the games that will comprise the library of Apple Arcade that analysts think it could even become a multibillion-dollar service for the company within just a few short years. And despite the deep bench of star power that Apple has lined up for its TV service — including everyone from Oprah Winfrey to Steven Spielberg — analysts at HSBC think Apple Arcade could end up being a bigger winner for the company, revenue-wise.

According to this new report, Apple’s strategy seems to be in part about advancing enough money to developers that will exceed the cost of development for a typical independent game. Brands like Disney, Konami, Sega, as well as smaller shops that have done well in Apple’s App Store like ustwo (which developed the hit game Monument Valley), are all said to be taking part in Apple Arcade.

The FT’s report goes on to note that Apple has likely already exceeded the $1 billion it’s believed to have spent so far on Apple TV+, which of course dwarfs the numbers being talked about here for Apple Arcade. Nevertheless, analysts at HSBC think Apple stands to generate almost $400 million in Arcade revenue next year — and almost $3 billion ($2.7B, to be exact) by 2022.

Apple TV+, meanwhile, looks set to reap $2.6 billion in revenue by 2022, according to HSBC. If all of that holds true, it may be a result of passivity vs. activity — with TV shows, of course, you watch to unwind, while gaming is a much more active, less passive, endeavor. The full Apple Arcade launch lineup will represent the first true test, but as of now it certainly looks like Apple has a winner on its hands. A surprising one, at that, given how much attention has surrounded the launch of its Netflix rival.

Andy Meek Trending News Editor

Andy Meek is a reporter based in Memphis who has covered media, entertainment, and culture for over 20 years. His work has appeared in outlets including The Guardian, Forbes, and The Financial Times, and he’s written for BGR since 2015. Andy's coverage includes technology and entertainment, and he has a particular interest in all things streaming.

Over the years, he’s interviewed legendary figures in entertainment and tech that range from Stan Lee to John McAfee, Peter Thiel, and Reed Hastings.