Might Apple's Gaming Ambitions Have a Hidden Quest?
Apple is currently under assault on a number of fronts. The three biggest at the moment: Tariffs. AI. The App Store. The first two are going to require quite a bit of time to fix, in so far as they can be fixed. But with the latter one, Apple could fix that themselves any time they wanted to. Granted, Wall Street might not like the fixes too much as they would endanger the now all-important Services revenue.1 Still, there's a path here and actually a new way forward may have just opened up.
As Mark Gurman reported yesterday for Bloomberg:
Apple Inc. is planning a dedicated app for video games on its devices, seeking to sell gamers and developers on the idea that it’s a leader in the market.
The company will preinstall the app on the iPhone, iPad, Mac and Apple TV set-top box later this year, according to people with knowledge of the matter. The software will serve as a launcher for titles and centralize in-game achievements, leaderboards, communications and other activity, said the people, who asked not to be identified because the plans haven’t been announced.
Gurman's report downplays the news and oddly frames it in relation to Nintendo's forthcoming Switch 2 launch, which will happen just a few days before WWDC, where Apple's new app will undoubtedly be unveiled. Perhaps it makes sense to downplay it since Apple has a long history of over-promising and under-delivering when it comes to gaming across all of their platforms. And yet, Apple, and the iPhone in particular, remains one of the largest gaming platforms in the world. It may even be technically the largest based solely on the iPhone's install base.
Add in the iPad, Apple TV, and Mac and you have a gaming behemoth. But it's a quiet behemoth, because none of those devices are specifically focused on gaming. And so the Playstation, Xbox, and Switch – and gaming PCs and their tangential offshoots like Steam – get most of the attention in the sector. It long ago seemed like Apple had all the pieces in place to change that narrative – I wrote about this notion 12 years ago, for example – but it has never really clicked. So is this time going to be any different?
Again, based off of just what is being reported here, probably not. At least not at first. While a new gaming-focused app being pre-installed may seem like a big deal, Game Center, which this new app would be replacing, has long been a stand-alone, pre-installed app. Relatively few people use it, it seems. But that's in part because it's clunky and awkwardly built around social elements – something which Apple has always been awful at executing. Ping! If this new gaming app inverts the dynamic, to make the focus on the actual games, we could start moving in the right direction.
Of course, Apple has also had such a service for several years now in the form of Apple Arcade. As far as Apple's services go, it's actually pretty solid, and certainly a good value. But it has also reportedly been a pain to work with Apple on the initiative, as shifting priorities often hamper such efforts (see also: Xbox's myriad business model attempts and Netflix's own gaming ambitions). Perhaps the latest news that they're buying an actual game studio – a first for Apple – is a signal of the intent to take this all much more seriously. We'll see.
First things, first: one issue with Apple Arcade is that it has never been a stand-alone app and instead resides as a tab within the App Store. I've always found that to be a bit buried, but it also makes some sense as Apple Arcade requires you to download apps (games) to work, and where do you go to download apps? The App Store.
But what if that's the key to all of this? What if this app isn't just a new, more gameplay-focused Game Center, what if it's a new gaming-focused App Store?
Gurman's report only tangentially hints at this possibility. But actually, the original report on the matter, from Filipe Espósito at 9to5Mac way back in October of last year, perhaps gave us a more direct glimpse of this potential:
9to5Mac has learned details about the new project from reliable sources familiar with the matter. The new app combines functionality from the App Store and Game Center in one place. The gaming app is not expected to replace Game Center. In fact, it will integrate with the user’s Game Center profile.
According to our sources, the app will have multiple tabs, including a “Play Now” tab, a tab for the user’s games, friends, and more. In Play Now, users will find editorial content and game suggestions. The app will also show things like challenges, leaderboards, and achievements. Games from both the App Store and Apple Arcade will be featured in the new store.
Granted, either the information was wrong about the app not replacing Game Center, or the details have changed, but regardless, a fully gaming-focused App Store makes a lot of sense. And it's probably overdue. Which brings me back to my initial point and thought. What if this new gaming-focused app – let's just call it 'Game Store' – is not only meant to unify Apple's gaming-focused efforts, but also to separate them from the App Store itself?
Why might Apple do this? Because this would allow them to more easily differentiate between the two and, importantly, give the two independent policies.
That means that Apple could, say, drop the rate developers have to pay when it comes to revenue share in the App Store, while keeping it the same as it is now in the 'Game Store'. And that matters because actually, gaming makes up some two-thirds of Apple's App Store revenue at the moment (between paid downloads and in-app purchases – but it's predominantly the latter). It's the actual key to Apple's model for this segment of the Services business.
And guess what else is true? In gaming, a 70/30 split is a well-established norm. In fact, it's where Apple's own App Store split originates from (by way of iTunes, which also copied the model back in the day)!2 Yes, there are others who have tried to disrupt this split, notably Epic, but Apple has a much stronger case for a 70/30 split when it comes to gaming than it now does for the overall app ecosystem.
So hear me out: the 'Game Store' keeps the 70/30 model and the 'App Store' moves to something more like 85/15 as the standard (matching Apple's currently convoluted system for small developers with various arbitrary thresholds). Perhaps for smaller developers, Apple even drops it to 90/10.
I'm not saying this is going to happen at WWDC in a couple weeks. And, in fact, whatever Apple showcases here might indeed be underwhelming. But it could also be laying the groundwork for the above. And it could potentially be a win/win for multiple sides, including, perhaps Apple. At the very least, it would be a lesser loss to Apple than losing, say, most of the App Store revenue if certain changes are forced upon them legally.
One more thing: what if Apple also formalizes the ability to link out to the web for companies to handle payments on their own, with Apple taking a 0% cut? But as a part of that, as is now the case, those developers would need to offer an in-app purchase option, where Apple could compete for the business on their own platform (with their own built-in advantages). And if the cut is 85/15, I think that would be a much more acceptable trade off to most developers. But this would be App Store-only. 'Game Store' would again have different rules. Microsoft presumably wouldn't like that, but I'm sure all the sides could figure something out. And anyway, it's a start. Of real change.3
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 Though not nearly as much as the loss of say, the Google Search deal, were that to go away. In fact, I think the threat of that going away is causing Apple to hold on to their App Store cut all the more tightly...
2 And to tie all the pieces and world's together, the 70/30 split actually comes from Nintendo back in the day. Hudson Soft couldn't make their own physical game cartridges and so they paid Nintendo to do so well above their "normal" 10% revenue share. All the way up to 30%. If Apple executes the changes above, now we get to debate whether or not creating physical game cartridges in the 1980s is a good comp for a revenue split in 2025 :)
3 An even bigger deal would be allowing apps to be downloaded over the web, outside of the App Store. But I suspect that's still a bridge too far for Apple at the moment, even if the EU is mandating it. Baby steps...