Apple (AAPL) is aiming to take control of the highly lucrative, but hard-to-crack mobile games market.
Apple Arcade, Apple’s forthcoming game subscription service, will be priced at $4.99 per month according to the blog 9to5Mac, which spotted the pricing details within the interface of an App Store listing of the new service. Apple shares closed 1.86% higher on Monday.
Mobile games are big business: According to research from App Annie, mobile games accounted for 74% of worldwide consumer spend across iOS and Google Play last year, with total spend on iOS outpacing Google Play by 50%. The majority of that spending is on “freemium” games with in-app purchases rather than on paid games, however — and Apple views Arcade as the answer to the lopsided nature of the mobile games market.
“The rumored $4.99 per month price point for Apple Arcade is a very reasonable starting point, especially when taking family sharing functionality into account, and fits in line with expectations,” said Amir Ghodrati, Director of Market Insights at App Annie. “There’s enough revenue potential to be able to entice developers to create content specifically for the service, while the price point is lower than almost all of the gaming subscription services for PC/console.”
Apple is reportedly dropping some serious cash in spinning up Apple Arcade’s library. Apple reportedly spent hundreds of millions to secure titles for Apple Arcade. According to the Financial Times, Apple’s budget exceeded $500 million for about 100 games, a figure that included incentives for developers to distribute their games exclusively on Apple.
The 100 games available at launch will be playable across iPhone, iPad, Mac and Apple TV. Apple is placing a focus on high-quality, immersive adventure or strategy games, rather than the first-person shooters than often dominate console play. Announced titles include Way of the Turtle, Down in Bermuda and Hot Lava.
Many analysts view Apple Arcade as a potential sleeper hit in Apple’s growing slate of subscription services, which includes the Apple Card, Apple News+, and Apple TV+, the latter of which is set to launch this fall. In an April report, HSBC analysts wrote that revenue for Apple Arcade could outpace that of Apple TV+ by 2024, though pricing was unknown at that time.
An Apple Arcade subscription will also include a one-month free trial — which is longer than many gaming subscriptions and will give prospective subscribers ample time to get comfortable with it. It could also mean that understanding the value the service brings will be a bit of a slower burn, according to Ghodrati.
“It can be difficult to get consumers out of the mindset of expecting all games on mobile to be free to download, so it’s going to be a longer cycle to get people to appreciate the value,” he said.
According to 9to5Mac, Apple Arcade is undergoing employee testing that will conclude with the iOS13 launch in September. Apple is also expected to roll out its newest slate of iPhones in September.