Can Apple Be the Netflix for Games?
Apple (NASDAQ: AAPL) is headed in a new direction. It is speculated that the company is slowly building content subscriptions, in addition to working on a gaming subscription. The idea is to be the Netflix of gaming. This would be huge for Apple... if done in a thoughtful way.
A gaming subscription side of business would bring in steady and recurring revenue, which would be a smart decision for Apple since the smartphone market has been slowing down and the desire to upgrade every year has been shrinking.
If Apple goes in this direction and actually launches a game subscription, users will most likely pay a monthly subscription fee to gain access to library of games.
Apple isn’t the only company with this idea. Amazon has also been rumored to be working on its own game streaming service. The company already has a platform for movies and series, so it would make sense to reach out to another audience.
Sony (NYSE: SNE) offers a game streaming service for PlayStation 4 and PC called PlayStation Now. This service allows users to play over 700 games from their PS4, PS3, or PS2 at a low price of $99.99 per year.
Then there’s Microsoft (NASDAQ: MSFT), which offers a game streaming service for its Xbox One called Xbox Game Pass. This subscription offers access to over 100 games for $9.99 per month. Microsoft has been experimenting with streaming Xbox games to mobile devices through its Project xCloud. This could be an interesting approach for Microsoft and the growing idea of a game streaming platform.
Apple isn’t the only tech company that has thought about the opportunity in creating a successful gaming subscription platform. However, it does make sense that Sony and Microsoft would dominate this space, but they are also limited to catering to consumers who own their consoles.
What would be useful is if gamers had access to a variety of games they could play on different consoles, whether it be an Xbox, PlayStation, or even a PC. If you’re a serious gamer and willing to pay for a subscription service for games, then you probably have more than one favorite console or way to play a game.
Of course, everything is still preliminary and rumored for Apple. How it executes a gaming service and what to expect from that service will come clear as this idea becomes more realistic for the company. “Games” is the top category in Apple's App Store. Games generate a lot of downloads, not to mention a lot of revenue.
Apple is looking for ways to earn more revenue and to prove its worth to investors. The company has been signing deals with TV producers to create its own streaming service so it can compete with Netflix (NASDAQ: NFLX), Hulu, and other streaming platforms. It has created a magazine subscription service. Last March, it acquired Texture to help build that idea up.
One subscription platform Apple has excelled at is Apple Music. It has 56 million subscribers! If Apple can apply what it did to Apple Music to make it a successful and growing platform, then there is hope these other services could be successful, too.
Until next time,
Pro Trader Today