Apple could invest $500 million in Apple Arcade

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Apple Arcade is something of a loot box for Apple.
Apple Arcade is something of an expensive loot box for Apple.
Photo: Apple

Apple’s upcoming game service could be getting some major seed money. A new report indicates the iPhone maker might be spending over $500 million to build its stable of games.

And analysts from HSBC predict Apple Arcade will bring in more revenue than Apple TV+, this company’s streaming video service.

Arcade will allow iOS and Mac gamers to access a plethora of games in an “all-you-can-eat” subscription service. It was unveiled last month, but won‘t debut until this fall.

It’s a bet that consumers would rather pay a monthly fee to play as much as they want, rather than hassle with “free” games that endlessly nag players for in-game purchases.

At launch, Apple Arcade will boast more than 100 new and exclusive games. Companies on board include Lego, Sega, ustwo games, Snowman, and many more.

Apple Arcade a big play in gaming

Apple is paying developers several million dollars for exclusive rights to each game joining its service, according to Financial Times. This information comes from “people involved in the project’s development,” not official sources.

These same unnamed insiders say games don’t have to stay exclusive to Apple Arcade for more than a few months. After that, titles can appear on Android, Xbox, etc. This implies Apple intends to frequently add new offerings to its service.

Arcade is a big loot box for Apple

Apple is gambling that enough people will join Arcade for its initial $500 million investment to pay off. Analysts with HSBC think they will.

They predict revenue from this gaming service will total $370 million in 2020, and will expand to $4.5 billion by 2024. That will require 29 million subscribers.

These same analysts predict Apple TV+ will generate $4.1 billion in 2024.

At the official announcement last month, the monthly subscription fee for Apple Arcade was kept secret. HSBC analysts predict it will be $12.99.