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Apple to spend over US$500m for its games subscription service

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Ann Thai, Apple senior product marketing manager for the App Store, introducing Apple Arcade during a launch at Apple's HQ on March 25 in Cupertino, California.

Hong Kong

APPLE Inc is spending "hundreds of millions of dollars" to obtain new video games for its upcoming Apple Arcade subscription service, the Financial Times reported, citing unidentified people familiar with the deals.

The move shows Apple is serious about taking games as a new source of subscription revenues, and highlights its battle to obtain exclusive rights for content against game platforms from Google and Tencent Holdings Ltd, and console makers Nintendo Co Ltd, Sony Corp and Microsoft Corp, according to the report.

The iPhone maker is spending several million dollars each on most of the more than 100 video games that have been selected to launch on Apple Arcade, with the total budget likely to be more than US$500 million, the report said.

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Apple is also offering game developers an extra incentive if they agree for their game to be exclusively available on its service and withhold release on Google's Play app store for Android smartphones or other subscription gaming bundles such as Microsoft's Xbox game pass, the Financial Times said, citing several people involved in the project's development.

After a few months, developers would be able to release their games on computers or other games consoles such as Nintendo's Switch or Sony's PlayStation, the report said.

Apple declined to comment, the Financial Times said.

Titles already announced for Apple Arcade include Sega Sammy Holdings' Sonic the Hedgehog, Cartoon Network and Lego, as well as new games from independent developers such as ustwo, Annapurna Interactive and Boosa Studios Ltd, it said.

Apple announced last month that Apple Arcade will be integrated into the App Store and will include more than 100 games exclusive to the service and Apple's platform.

The games will synchronise across iPhones, iPads, Mac computers and Apple TVs, and will work offline, the company said. The service won't launch until the fall and the company said it will disclose pricing at a later date. BLOOMBERG