Apple has reportedly spent $500 million on Apple Arcade
After iPhone shipments peaked in 2015 at 231.22 million units, the company decided to focus on its services unit. This was a smart move because many of the businesses under the services umbrella, like Apple Music and Apple News+, require recurring payments from subscribers. And these businesses are less reliant on new iPhone sales, depending instead on the large number of active iPhone users which at last count totaled 900 million people. The company has targeted $50 billion in services revenue by 2020 which would be twice the $25 billion that the division grossed in 2016. For the recently announced fiscal third quarter, covering April through June, the services unit took in a record $11.5 billion in revenue. That is a 12.7% year-over-year gain from the $10.2 billion that the division took in during the same quarter in 2018. Overall, the services unit is Apple’s second-largest business unit and is it’s most profitable. The success or failure of Apple Arcade will go a long way toward determining whether Apple meets its $50 billion revenue goal next year.
Besides paying the monthly subscription price, Arcade members are expected to shell out the cash required for them to pick up accessories for their Apple devices such as controllers. While subscribers will be able to navigate through Arcade games using the buttons on their iPhone, iPad or Mac, picking up an MFi (Made for iPhone, iPad) controller could make gameplay a little easier for some.
It seems a little strange that Apple is asking employees to pay 49 cents a month so that the company can collect feedback from them; after all, the point of the early access program is to find out where Apple and the game developers can make changes to improve the user experience. While we have no data revealing how many have signed up for the short-lived program, we’d bet that it was more than enough for Apple and its developer partners to get a good idea of the work that still needs to be done on Arcade before its launch.