The tech world is obsessed with subscriptions, but many of us are tapped out on monthly fees. Apple thinks games will buck the trend.
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 $4.99 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 is changing video games for $5 a monthby Dan Ackerman06:02Large play-pause toggleAUTOPLAYONOFF00:0006:02
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 $9.99 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.
You get a subscription! And you get a subscription!
Apple says its game subscription service is the first of its kind because it offers App Store games across the iPhone, iPad and Macs. It also gets to tap into the more than 1.4 billion devices — and their loyal owners — as potential customers.
Meanwhile, longtime frenemy Microsoft has been steadily growing its $9.99 a month Xbox Game Pass subscription service, which launched two years ago. The service first offered a back catalog of games, including its space epic Halo 5: Guardians, Take-Two’s NBA 2K series and an upgraded version of Bandai Namco’s popular fighting game SoulCalibur 2.
This year, after polling players about how they wanted it to change, Microsoft announced a version of Xbox Game Pass that lets you play PC games too. That means access to more than 100 popular games including its well-regarded new Gears 5 space shooting epic. The company also launched an Xbox Game Pass Ultimate service for $14.99 a month that combines its Xbox Game Pass for console and PC with its Xbox Live Gold social network so you can compete and play with friends as well.
And then there’s game maker Ubisoft, which also announced a subscription service in June called UPlay Plus. Yves Guillemot, CEO of Ubisoft, believes the $15 a month service will attract people who buy a lot of his company’s games such as the action adventure series Assassin’s Creed, the dystopian hacking series Watch Dogs and the post-apocalyptic survival game The Division 2.
There are others as well, including Origin Access from Electronic Arts. That service, which starts at $4.99 a month, offers games like its World War II-inspired shooter Battlefield V, FIFA soccer series, Madden NFL football titles and The Sims role-playing games. It launched in 2014.
For game players who aren’t keen on spending as much as $200 a year for a game service, Nintendo offers the cheapest option with its $3.99 a month Nintendo Switch Online service. That gets you access to some older Nintendo games, as well as the ability to compete over the internet and to save game progress in the cloud.
Nevermind that while you’re debating all these game services, there are many others vying for your wallet so you can watch their TV or movie offerings. That includes Netflix at $9 a month, HBO Now for $15, Hulu for $6 and Sling TV’s live television at $25.
Oh, and don’t forget the $7 a month Disney Plus service set to go live in November, promising access to more than a dozen new shows from Disney, Marvel and Star Wars, as well as films like The Lion King, Avengers: Endgame and the upcoming Star Wars: The Rise of Skywalker.
And we haven’t even started talking about your internet, wireless and power bills.
All that is going to add up.
Nostalgia vs. new
Apple Arcade’s success — or failure — may signal how willing we all are to keep paying for all these different subscription services. And how these business models will need to change to win us over.
Some analysts and media executives say that any successful service needs a back catalog of guaranteed hits to reel people in. For Netflix, that means a lineup of old shows like Warner Bros.’ Friends, whose more than 230 episodes originally aired between 1994 and 2004, and NBC’s The Office, with over 200 episodes that ran between 2005 and 2013.
Netflix clearly agrees that shows like Friends are must-sees. The company reportedly paid nearly $80 million to rights owner Warner Bros. to continue streaming the sitcom through the end of this year.
The bottom line is whether unlimited access to nostalgia is more important than something new.
For gaming services, that catalog of beloved classic games has been a main selling point. Ubisoft’s Assassin’s Creed games, which made their debut in 2007, let players lose days roaming ancient Egypt, renaissance-era Italy and colonial America. Microsoft has old hits like Rocksteady’s Batman action games and indie darlings like the shooting game Super Hot.
Apple’s bet is on the new. Both Apple TV Plus and Apple Arcade are counting on original shows and games to make a splash.
Some of those games include Where Cards Fall, The Enchanted World, and Shinsekai: Into the Depths — each of which CNET got an exclusive first look at, with gameplay demos and behind-the-scenes stories about the developers.
Other games generating excitement are the fighting game Lego Brawls, the puzzler Frogger in Toy Town, the adventure game Sayonara Wild Hearts and the skateboarding game Skate City. Apple’s publicly discussed about half the 100 games it plans to offer.
But Apple’s kept its plans close to the vest. Last week, the company invited CNET editors and other publications to its campus to try out about a dozen of the launch titles and chatting with some of their developers and designers. But aside from those couple experiences, few people outside of Apple have add as much hands-on time with Arcade as we have.
Competing with free
Investing in new, original titles is a big, ambitious move. But when it comes to gaming, well-known brands tend to dominate. In the world of mobile games, Activision‘s Candy Crush Saga puzzler and Supercell’s Clash of Clans strategy game are some of the big dogs. And, of course, there’s Fortnite.
They also happen to be free.
“Competing with free is hard,” Apple’s Thai said.
These games, often referred to as “freemium” titles, make their money by charging for upgrades or other optional items to enhance play, whether it’s extra levels or new shoes for your avatar. They’ve taken off in the App Store and Google Play because there’s little risk to downloading and trying them at first.
Meanwhile, paid titles like Ustwo’s Monument Valley epic and Alto’s Adventure snowboarding game are critically acclaimed but hard to find in a crowded app store. Apple Arcade, by comparison, will have its own button in the App Store filled with personalized recommendations of games Apple thinks you’ll like based on the games you’ve already played.
With Apple’s focus on storytelling and artistry, in addition to its emphasis on games that are self-contained and playable offline, could set the service apart. It’ll give developers “the freedom to do the best work of their lives,” Thai said.
Apple’s hoping the promise of a vetted catalog of games for a wide range of players will be enough to convince at least some to hand over their money ahead of time.
If anyone can break in with new, never-before played games, Wedbush analyst Michael Pachter thinks it’s going to be Apple. Like Zelnick, Patcher is a critic of subscription services. But he thinks Apple will be able to sign up talented developers who want to create high-quality games without having to give them away for free in hopes people will buy extra items later. And given all that cash it has lying around, Apple can afford to pay for the games it needs to woo subscribers.
“Apple’s saying ‘All right, conventional game makers, put some stuff on the phone, and we’ll throw it into our subscription,'” Pachter said. “There are a lot of really high-quality game makers out there that could actually make some pretty fun stuff.”