In a observe to shoppers — as famous by Apple 3.0 (a subscription is required to learn the article) — the Oppenheimer funding financial institution says “Apple administration is committing to constructing Apple {hardware} as the very best HD gaming platform.”
From the report: Apple As we speak: Primarily based on our estimates, App Retailer has generated fee of $15B from cell gaming publishers up to now 12 months, making it a high 3 “online game” firm by revenues. Its income accounts for 17% of world cell sport market in 2023. Compared, Apple’s place in HD gaming (AAA and AA video games on PC/console) are negligible, with lower than 2% market share.
HD Enlargement A Necessity: We consider Apple is pivoting its {hardware} and software program designs to seize new gaming income. Notably, the slowdown in cell gaming casts headwinds for Apple’s combine shift towards extra high-margin service income. We see ample alternatives for Apple to seize related excessive margin income elsewhere, notably in HD gaming.
Favorable Business and Know-how Developments: We see plenty of key traits favorable for Apple’s entrance into AAA gaming: 1) higher gaming expertise on ARM {hardware}, catching as much as x86, 2) need for publishers to develop twin SKU (cell and PC/console), 3) need for gamers to entry video games throughout a number of platforms based mostly on the place they’re.
Market Enlargement: We estimate that by 2028, Apple may have an put in base of over 1B HD gaming-ready units throughout iPhone, Mac, and iPad, in comparison with a projected international console put in base of 300M (Xbox/PS/Change). Excessive-end Android and Home windows on ARM units can even present extra put in base for builders and publishers.
Dangers and Challenges: We see the next dangers in Apple’s enlargement in HD gaming: 1) {hardware} and software program compatibility, 2) developer relationship (Apple must construct goodwill), 3) developer inertia and participant royalty to Home windows gaming, 4) competitors from Android and extra PC-like handhelds.