If Apple was hoping to level up its standing in the video game world at its Sept. 9 event, it’s going to need to try again.
The announcement that the revised Apple TV will have a notable focus on games was widely anticipated , and many in the gaming world thought this might be the time Apple (AAPL) would launch an assault on Microsoft, Sony, and Nintendo on their home turf—the living room. But as the presentation unfolded, it became clear that the threat to modern consoles was no different than it had been the day before.
“I see it more as an extension of where they are,” says Billy Pidgeon, an independent analyst who focuses on the video game sector. “I see no indication that they’ve changed their business approach to games. They’re still putting out the standard stuff that’s available on an iPad or iPhone. They continue to embrace a free to play model.”
That’s not to say that Apple didn’t have the support of some major publishers. While the on-stage demonstrations were a game that seemed a direct clone of the ’80s arcade hit Frogger and a motion game from Rock Band developer Harmonix that was reminiscent of an old Wii title, there were some notable announcements.
Activision (ATVI) will bring Guitar Hero Live and Skylanders SuperChargers to Apple TV and other iOS devices this fall (as well as the less well-known title Geometry Wars 3: Dimensions Evolved). Launching two of its larger holiday titles on the system is noteworthy, as both appeal to the mainstream audience Apple is courting.
And Disney (DIS) will bring the recently launched Disney Infinity 3.0 to the system as well. The company says it plans to sell a specific starter pack for Apple TV, which will include figurines, a bluetooth base, and a special controller with which to play the game.
“We are honored to have worked closely with Apple over the past few months to deliver a console-quality experience for this exciting new device,” said John Vignocchi, vice president of production for Disney Interactive in a statement. “We can’t wait for fans — old and new — to give it a try when it releases later this year.”
When you’re Apple, it’s not hard to bring aboard big name partners like Activision or Disney (especially Disney!) At launch. The real test will come in six months or a year, when the initial install numbers for the system are in — and that’s when analysts say things could get tricky.
An iPhone or iPad launch ramps to 10 million fairly quickly — but Apple TV has historically been less of a high-demand item. And Apple has priced the new device at $149 and $199, significantly higher than similar devices from Roku, Amazon, and Google.
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Without a sizable installed base, publisher support for Apple TV-specific games will shrivel. Instead, players will get the same versions they can play on their other iOS devices.
“The app platform and enhanced gaming capabilities are tangible updates, but at this time they are debatable as features that significantly change the dialogue on what a streaming box is supposed to do,” said Paul Erickson, senior analyst at IHS.
Then there’s the matter of the remote that will come with the new Apple TV. For searching TV, it’s terrific. For gaming? Well… here’s Pidgeon’s take.
“That controller is a joke,” he says.
Fortunately, the system will work with bluetooth-equipped third party controllers, so if it does start to take off, Apple TV could be a windfall for accessory manufacturing companies like Mad Catz. As it stands, though, the gyroscope inside the Apple TV remote makes it a slightly different take on the Wii controller, which could be intriguing to some independent developers, but isn’t likely to lure established developers.
Ultimately, though, the Apple TV doesn’t have to be a console killer. And that’s something many gamers overlook. Last year, Apple’s app store saw an estimated 500 games launched per day. And in 2014, app developers’ revenue from Apple topped $10 billion. (Apple did not update any numbers at the event Sept. 9.)
Not all of that revenue went to game developers, of course, but games are by far the biggest category in the app store. A 2014 study found 85% of the top grossing apps were games. So, assuming that number hasn’t changed, that’s potentially $8.5 billion to developers.
In 2014, total brick and mortar retail sales in the game software industry came in far lower — at $5.47 billion — according to The NPD Group. (Numbers from digital sales certainly push that figure higher, but they’re fuzzy and there’s no reliable source for them.)
Despite this, the console market is still thriving — proving that it can coexist with the mobile game market. And adding games to Apple TV isn’t likely to change that.
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For a two-minute summary of Apple’s Sept. 9 event, watch this Coins2Day video: