Starting next week, gamers can pay a fee to subscribe for access
to 100 titles
By Sarah E. Needleman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 11, 2019).
Apple Inc. is launching its new Arcade videogame subscription
service next week with a $4.99 monthly price that grants access to
about 100 titles, an offering that analysts expect to be a tough
sell since consumers are used to downloading mobile games free.
The technology company said Tuesday the new service will be
available Sept. 19 in more than 150 countries through its App
Store. Apple Arcade will feature new and exclusive games, and
subscriptions can be shared with up to six family members across
its devices, such as the iPhone, according to Apple. Unlike most of
the hundreds of thousands of free games currently available on
Apple devices, those in Apple Arcade won't have ads or offer in-app
Launching a subscription game service represents a major shift
for Apple. Since opening the App Store in 2008, the company has
offered users the option of buying games outright or downloading
them free, with the latter often meaning players would see ads or
offers to make in-game purchases.
A handful of other game-subscription services are already on the
market, though these focus mainly on console and computer games.
Microsoft Corp.'s Xbox Game Pass and Electronic Arts Inc.'s Origin
and EA Access cost between $5 and $15 a month. Alphabet Inc.'s
Google is planning to launch a cloud-gaming platform in November
with a $10-a-month subscription option.
Apple revealed Arcade's price and launch date at the start of an
event showcasing its latest hardware and service offerings at its
Cupertino, Calif., headquarters. The company, which initially
unveiled Apple Arcade in March, demonstrated live gameplay from
three games, including a remake of the classic hit "Frogger."
"It will be a challenge to monetize this," Wedbush analyst Dan
Ives said. "But if Apple didn't think it was possible, they never
would've gone down this path."
Digital subscription services have exploded in popularity in
recent years, spanning everything from movies and music to books
and news. In the videogame industry, subscription-by-mail service
GameFly has been around since the early 2000s, but other companies
have been cautious about moving deeper into subscription
"We're transitioning from a world of ownership to what we call a
world of access," said Mike Blank, general manager of EA's
subscription services, which had roughly 3.5 million subscribers as
of July. EA Access, for console games, launched in 2014, followed
by EA Origin, for PC games, in 2016.
Subscriptions are ideal because they provide an opportunity to
try a large number of games for less than what it would cost to buy
them, said Matt Percy, senior director of business planning for
Xbox Game Pass, which launched in 2017. The company hasn't
disclosed subscriber numbers but says subscribers play 40% more
games than nonsubscribers on average.
"The great thing about a subscription is that it is like a
breakfast buffet," Mr. Percy said. "You're going to try stuff
you've never tried."
With Apple Arcade, Apple is going after a market that makes up
the largest slice of the overall $150 billion game-software
industry -- mobile. This year, mobile games are expected to
generate $68.5 billion in global revenue, up 10% from 2018,
according to Newzoo BV. That compares with $47.9 billion for
console games and $35.7 billion for computer games, the research
Still, Apple's move comes at a time when the most downloaded and
highest-grossing games are free and have been for many years.
Console and PC games, by contrast, cost around $60.
"I have a hard time seeing this work," Cowen analyst Doug Creutz
said of Apple Arcade. "There are a tremendous number of free games
on the [App Store], many of which are quite good."
Other analysts argue that if any company can change mobile
gamers' spending habits, it is Apple. "For the most part, the
services they've rolled out have exceeded expectations," Angelo
Zino, an analyst at CFRA said, pointing to Apple Music as an
example. "People underestimate how big Apple's install base is and
who it caters to."
Though CFRA doesn't expect Apple Arcade to have a significant
impact on Apple's bottom line, "we do think it could move the
needle in terms of services business overall," Mr. Zino added.
One mobile-game developer contributing to Apple Arcade,
Paris-based Gameloft, says consumers are ready to embrace a
subscription service for mobile games.
"We see a craving for curated, high-quality content available at
a limited price via a subscription," said Alexandre de Rochefort,
finance chief of Gameloft, a unit of Vivendi SA. "It's good for the
industry to have an alternative."
Other participating developers include Capcom Co., Square Enix
Holdings Co., Konami Holdings Corp. and Bandai Namco Entertainment
Write to Sarah E. Needleman at firstname.lastname@example.org
(END) Dow Jones Newswires
September 11, 2019 02:47 ET (06:47 GMT)
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