Apple Arcade bets family gaming can blast away subscription fatigue

Originally published September 16, 2019

By Ian Sherr

If you’re a hardcore Apple fan, you may start feeling a pull on your wallet, and I’m not just talking about the new iPhone 11 Pro Max introduced last week. In addition to its iCloud storage service and Apple Music, the company is now pitching a new Apple TV Plus video streaming service, the Apple News Plus service and its family-focused Apple Arcade gaming service — and suggesting that you sign up for the shiny Apple Card to pay all those subscription fees, of course.

Welcome to the world of monthly subscriptions, which has been going into overdrive over the past year. Google asks you to pay $20 or more a year for extra storage for your photos, videos and emails. Amazon charges $119 a year for its Prime shipping, video and music service. Hulu, Disney, HBO and even World Wrestling Entertainment are pushing streaming TV services that start as low as $6 a month. And don’t forget Sony, Microsoft and Nintendo, which offer monthly subscription gaming services too.

Even so, Apple says that when it comes to its new $5 a month gaming service, to go live by Thursday, it’s thinking different.

It’s also giving away the first month free.

“We’ve joined forces with the world’s most innovative game developers to push the boundaries of what’s possible,” said Tim Cook, Apple’s CEO, during a presentation at the company’s headquarters last week.

Apple Arcade, the company said, will offer more than 100 games ranging from kid-friendly to better-for-adults, and they won’t charge for extras after you download them. The games will also work with Apple’s Mac computers, iPads and iPhones

“These games cover so many genres and play styles, so everyone can count on finding games they love,” said Ann Thai, a product lead for Apple’s App Store.

Apple getting in on the subscription business isn’t a surprise. Apple gets only about 20% of its sales from services today. And Cook said last year that even though Apple made its name selling gadgets — the iPhone, the iPad, the Mac and all those AirPods — these new services will be its next big thing.  

Cook got no less than Oprah to deliver the reason why. “They’re in billions of pockets y’all,” Winfrey said in March when Apple announced Apple TV Plus. It will feature Steven Spielberg’s Amazing Stories, new documentaries from Oprah and other original programming from a cavalcade of stars including Reese Witherspoon and Steve Carell.

Alongside Apple TV Plus is Apple Music, the company’s popular $10 music service offering more than 50 million songs that counted 60 million paying subscribers in June. (Spotify, by comparison, has 100 million subscribers.)

By getting into the gaming world, Apple says it plans to offer something different. Rival services already tout a catalog of classic games to win your money. But Apple is taking the unusual step of paying developers to create over 100 exclusive titles for Arcade. Using some of the over $200 billion in cash and equivalents in its piggybank to fund these games shows Apple’s willingness to go all in on the subscription model.

That’s enough to draw David Barnard, a developer advocate at app tool maker RevenueCat and an app developer whose company Contrast makes Weather Up and the productivity app Launch Center Pro for Apple’s App Store. Both of his apps are free but have subscription options for extra features. Apple Arcade appeals to Barnard as a way to give his young children games to play that won’t try to nickel-and-dime him with different looks for characters, or charging for extra turns.

“Apple’s going to the high end,” Barnard said. “They’re not trying to get 100 low-quality games, they’re trying to get some AAA-level experiences that people are going to be talking about, and that’s exciting to me.”

But while Apple Arcade is playing to win, there’s no guarantee that it will be an instant — and money-making — hit.

Between Apple Arcade and just about every other service out there, a reckoning is coming, say analysts. With so many big-name companies vying for monthly fees, at some point we may need to get even choosier about which services we’re willing to sign up for. 

“It’s a real problem,” said Strauss Zelnick, the interim chairman of CNET parent CBS, which also has a subscription service, called CBS All Access. For his day job, he’s head of Take-Two Interactive, which makes hits like Grand Theft Auto and the western epic Red Dead Redemption, the latter of which is available on Sony’s PlayStation Now subscription service.

Ultimately, this rush to subscriptions throughout the entertainment world will turn sour, he added. “Most Americans want two, three or four subscriptions — they certainly don’t want 40 of them, and they aren’t going to pay for them.”

So will Apple be one of the winners? You’ll decide.

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