Could Apple Gaming ever be a thing?
This is definitely the moment to find out
I think Apple has a problem. First off though, it’s worth underlying that we are talking about the biggest company in the world which is now worth a mind boggling 2 trillion dollars by market cap. Last quarter Cupertino reported an all time high revenue of $111.4 billion, up 21 percent year over year, and that was during a pandemic. So when I say a problem, dont get me wrong I mean more like, a speed bump.
All that growth can be attributed more or less to one product. The iPhone!
Here lies the speed bump. Smartphone sale growth is slowing down. There are plenty of reasons for this, but it can largly be attributed to the fact that improvements over the last few years have been incremental compared to the improvements year over year of the first generations. From now on every new generation of smartphone whether it is Apple, Samsung or anyone else, there will be less and less of a reason to buy the next one. Screens are bigger, cameras are better but the reality is, my old phone really works just fine. The changes aren’t big enough to convince consumers to throw away a perfectly good phone for a shiny new one. Investors seem to think that things will change with 5G, but the way I see it no one really complained about how slow 4G was and 5G infrastructure roll-out is still a mess.
Adding to this is the fact that initiatives such as the right to repair, and concepts like the circular economy are gaining traction in both the US and the EU. A lot of people are just going to be getting that battery changed instead of buying a new phone and if you ask me that’s the way things should be. A company like Apple that makes premium phones that are built with superior quality and built to last, will most definitely be more susceptible to these kinds of changes.
So what does a tech giant do when their main source of growth is starting to show signs of slowing down? They move on!
The next big thing.
The rumour mill has been working overtime over the last few months with a number of possibilities. The biggest one is that Apple is heading into the auto market. Hyundai has confirmed and denied the fact that they are in talks with Apple two times now, and there are more and more rumours that Apple is in talks with a number of other auto makers. What aspects of those news are true, remains to be seen, but what is for sure is that Apple is making the rounds. Knowing Cupertino nothing is going to be confirmed until they have a working prototype, and that might be a while, at least half a decade.
The second thing is that they will be moving into VR. Apple is rumored to be coming out with a VR headset sometime next year. This first headset supposedly will be only a precursor to Apple’s ultimate goal of its own AR glasses but this is also something that is a long way away from being a big part of Apple’s portfolio.
It’s already here.
The company needs something to drive growth from now until then and I think it’s already here. Their new Apple silicon.
Am sure you have read how fantastic the new Macs are. Now you might think that the Mac can never really match the iPhone’s sales numbers, and you would be right. But there definitely is a way for it to become a lot more profitable.
Gaming! Gaming is now a 180 billion dollar industry growing more and more every year. It’s now bigger than Hollywood and sports combined and it is one of the biggest gaps in Apple’s portfolio. This new silicon chips could change that, drastically!
I own an M1 Macbook Pro and during the pandemic it has offered a really solid gaming experience. Let me highlight though that am not talking about this year’s AAA titles but I have been able to play titles that were never possible on a laptop of this formfactor and at this price point.
Other than Apple Arcade there aren’t any indications that Apple will make a big push in this direction but I see no reason not to. The next and more powerful generation of M1 processors should come with higher GPU performance, maybe even as high as a mid-tier gaming card. If that’s true all Apple has to do is try to incentivise developers to design games specifically for MacOS. If that happens then the age old excuse that “I needed to buy a PC because it is the only way I can game” would no longer hold water, which should exponentially increase Macbook buyers. Apple is right now making vast amounts of money from their 30% cut on apps and games sold on the iOS app store, and this would just allow them to grow that revenue, by just basically offering a direct Steam competitor.
Lastly and this might be going one step too far, what if Apple put one of these chips on an Apple TV. They would have a cheap alternative to the current consoles and they would also be cutting them selves in on a gigantic pie.
Bottom line.
The fact that Apple has not been a serious contender in the gaming space has left a wide gap in there portfolio, that with the right moves these new chips could fill. It might not win over the hardcore gamers, but I think there is enough casual gamers outthere after this pandemic for it to provide adequate growth until some other projects such as the Apple Car and AR glasses can enter the market and pick up the slack.
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