I’m a daily Apple TV user, and that fact apparently puts me in the minority: even when the Apple TV’s price dropped to nearly iPod shuffle levels, it didn’t take off like Apple’s iPads or iPhones. From what I’ve gathered, many people think the little black box can’t do much. And it’s amazing to me that most people can’t describe what the Apple TV can do, even though it’s been available for years.
Adding an App Store to the Apple TV — a place to download games, new channels, and apps — has seemed for years like a no-brainer for everyone… except Apple. Blame the hardware, the software, or protracted negotiations with potential partners, but after years of waiting, it just hasn’t happened. Calling this a missed opportunity would be an understatement: video games alone generate tens of billions of dollars of revenue annually, and well over half of them are now sold digitally. Thankfully, 9to5Mac’s Mark Gurman reports, Apple will finally bring both iOS 9 and an App Store to the Apple TV this year.
The big question on my mind is how Apple plans to monetize the new Apple TV, particularly given its potential as a gaming console. Prior-generation Apple TVs failed to thrive at $99 (or even $69) price points, which is the same range where Amazon Fire TV, Roku, Ouya and others have struggled to match the market share of PlayStations, Wiis, and Xboxes. Moreover, Apple’s customers have shown little interest in paying ridiculous prices for iOS game controllers, so the hardware upside appears to be somewhat limited for Apple. There is, of course, a logical solution: Apple should accept the lessons it has learned about Apple TV and game accessory pricing, compensating for relatively low hardware profits by selling massive quantities of affordable software…
With over 1.5 million apps in the App Store, the vast majority of developers are struggling just to get attention, let alone make enough on games or apps to stay afloat. For years, the average selling price of an iOS app has hovered around $1 — $1.10 for an app, $0.60 for a game — which isn’t enough to entice top-tier developers to release their flagship games first on Apple’s devices. But even so, there are signs that major players aren’t willing to give up on the iOS platform. Apple has hundreds of millions of iOS users around the world, and it’s clear that low initial app prices can be offset with post-download ads, and/or in-app purchases ranging from consumables to subscriptions.
There’s still a huge amount of cash passing through the App Store, but as the Top Grossing lists show, it’s going heavily towards addictive, lightly social games with in-app purchases, subscription music and video services, and dating apps. Today, games selling for $5 or less dominate the App Store’s Paid Apps list, which is currently topped by Microsoft’s perenially popular and atypically $7 priced Minecraft: Pocket Edition. By contrast, other Microsoft apps such as Word, Excel, and PowerPoint are in the top 50 on App Store’s Free Apps list, but have some of their functionality locked behind Office 365 subscriptions.
Other savvy iOS developers have similarly been experimenting with low-cost paid and freemium models for their best-known products. Bandai Namco, one of the world’s largest console game developers, released two separate iOS Pac-Man games in the last month — the awesome PlayStation/Xbox title Pac-Man Championship Edition DX (above), and a new mobile-focused version called Pac-Man 256 (shown at the top of this article). For DX, Bandai opted for an entirely reasonable flat $5 asking price, down from $10 for the previously-released PlayStation and Xbox versions. The considerably simpler Pac-Man 256 is an endless-scrolling freemium game, letting you earn coins for power-ups by playing or watching ads, and offering an optional coin multiplier for $5.
Other developers have continued to defy conventional “$1 to $5” pricing wisdom. Duck Duck Moose, a well-respected developer of educational apps for kids, this week released its most ambitious and impressive title yet — a sandbox full of design, drawing, music, science, and geography tools called WonderBox (above) — for free, with no in-app purchases. On the other hand, major Japanese game developer Square Enix has released old console Final Fantasy games for $15 each, with its best-known sequel (Final Fantasy VII) officially hitting the App Store today for the same price. Console developers that haven’t entered the App Store yet are most likely holding off for one reason: they aren’t confident in the ability of their previously $50-$60 console games to sell at even $15 price points on iOS.
Apple needs to fix that, and if it does, everyone can win. The next-generation Apple TV hardware may not have the ability to launch at a much higher price point — at least, for a basic model with limited storage capacity — but if Apple pushes the device as a way to play console-quality games at $10 to $20 prices, it could make up for the low hardware price with substantial software revenues. Even with average app selling prices in the $1 range, Apple’s 30% cut of App Store sales equaled around $4.5 Billion of the $15 Billion spent on games and apps last year. If it could create a premium software tier for Apple TV games, it could sell those games at prices that both consumers and developers would find a lot more attractive than their current console options. At the same time, Apple’s own App Store revenues would jump.
That assumes, of course, that you’d be willing to pay more for true console-quality games on an Apple TV. So I’d like to ask you: What maximum price would you be willing to pay to get AAA-quality console games on the Apple TV? Vote in the poll here and let us know!
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If EA released an Apple TV verson of NHL or FIFA with the console version’s physics engine but (much) lower graphics and Apple actually made a real gaming controller I would pay 50$/per game without a thought. The console market needs disruption and it only seems natural for Apple to release their version of a console at this time, I want console games but I don’t really want to deal with Microsoft or Sony.
“Console quality”, at least modern console quality, is impossible on any mobile GPU. Unless the new ATV has a desktop class CPU and GPU, and a hard drive, then it will be stuck with low end mobile games.
The PowerVR 7 GPU fastest model in a SoC A9X at a 2.5GHz to 3GHz clock and so higher TDP in the 30Watt to 50Watt range would be a lot faster than the obsolete slow and crappy AMD APU Jaguar in Playstation4 and XBoxOne.
Rumors suggest an A8 chip, and a box that’s thinner and lighter than the current system with no fan, so it’s unlikely to surpass the PS4 and Xbox One.
You are either a troll, or simply lack any technical knowledge. The PS4’s GPU runs at 1.8 terflops and the system has 8GB of RAM and 512gb of storage. Take a recent AAA game like The Witcher 3. It requires 36gb of storage and struggles to run at 1080/30.
The iPad Air 2’s GPU runs at 300 gigaflops. That’s 6 times slower, plus the system has a mere 2gb of ram, and at most 128gb of storage. To get The Witcher 3 running in an iPad Air 2 would require stripping it back to such an extent as to render the exercise pointless. You would of course also struggle to store it on most iOS devices, as the typical storage levels of 16 or 32gb would be inadequate.
Your suggestion to simply over clock the GPU is staggeringly naive. Those chips are not designed to run with those kind of wattages or at the speeds you talk of. If only GPU performance was so easily improved.
Console quality games will not run on any mobile GPU. It’s debatable if last gen console games would run, as the simplified GPUs in mobile devices have very limited fill rate and would struggle with console quality shaders and overdraw.
So please, before you spout such ill informed technically illiterate nonsense again, do some reading first.
The Wii U doesn’t have a desktop-class CPU, GPU, or hard drive. We can debate whether it’s “modern console quality” or not, but it’s a modern console. If Apple puts an A8X or faster chip in the new Apple TV, it’ll be a very capable device, particularly as developers won’t have to worry about the chip running at low speeds due to battery life concerns.
The Wii U is a last gen console when looked at from a specs perspective. It has a very slight edge over the X360 in GPU performance, but it’s CPU is comically dated and underpowered which results in most Wii U games being CPU bound. It’s irrelevant anyway as the Wii U is clearly winding down and will be replaced by the NX next year.
The Wii U does have one gigantic advantage over any Apple gaming device however – storage. Games ship on custom Blu-Rays. It’s rare to find an iOS game which tops 3 or 4gb. It’s rare to find a PS4 game which is under 25gb. Many are 40-50gb.
I don’t disagree with your characterizations, but by the same token, Apple doesn’t need to match the PS4 or XB1 in power this year or even next year to beat them. Write it out of the equation if you want, but the Wii U represents the low end of performance for the current generation. Similarly, the original Wii wasn’t last-generation’s most powerful console, and it was the biggest seller by a wide margin. Specs don’t always win the console race. Price and accessibility go a long way.
If Apple wanted to follow an iPhone/iPad strategy and update the Apple TV hardware annually with the next A-series processor, it could keep making major leaps while PS4/XB1 sit still. Moreover, the app slimming tricks it developed for iOS 9, including as-needed level downloads for games, will radically cut the footprints of even big titles. If Apple wants to compete, it has a number of asymmetrical advantages. At this point, I’d give Apple way better odds as a game console maker than I would give Nintendo with whatever the NX is going to wind up being.
The Wii U does have about a 2011 Desktop class GPU by performance numbers. The A8X isn’t not at that level and many big name developers no longer develop for the Wii U for that reason.
IMO Apple would need to come out with something between the Wii U and One/PS4 otherwise I don’t think many big name developers will take it seriously.
You don’t seem to know much about Apple and you don’t think it straight. Instead of thinking of $40/50 game that requires bluray for 40/50 GB of data, you’ll need to think about a $5 game of only 4GB of data, and with in-app purchase of 9 to 10 additional “mission/levels” for $4-5 and 4/5 GB each. Games could easily be splited in both price and size to fit the Apple eco-system of “in-app purchase”. It also give to the user more feeling of not spending that much on games. And regarding GPU, the iPad Air 2 might be 6 time slower than a PS4, but Apple could easily use a more powerful GPU since they don’t have to be careful about power consumption since the Apple TV will always be connected to sector. Therefor, they could easily include a GPU just as much powerful (or even more) than current PS4 or Xbox One. And no need for hard drive anymore when you can get SSD directly on the motherboard. If my iPhone can have 128GB of storage, why my new Apple TV couldn’t? More than enough to manage Apple “console quality” games that could easily be downloaded directly from iCloud and App Store. There’s place in the future for physical media for data distribution… This is so passé! But again, you’re just not thinking it straight. Think Different…
Well….. Actually! Jeff Kibuule is right to a certain degree. See, it wont come from a current gen Power VR GPU. BUT!! The newest Power VR GPU that Imagination has created is simply a monster. And Apple is expected to use it this year. Its the Power VR GT7900, and it performs at, wait for it!….1.6Tflops (XBOX ONE is 1.2Tflops). If Apple decides to use it for the New Apple TV, and combine that type of power with there METAL API’s, its gonna be no frekin joke when it comes to Apple TV gaming. Hell, where already seeing METAL do some insane stuff with Apples current gen hardware EX: The new mobile game called “AFTERPULSE”. Which was made using Apples METAL API. Now! Just imagine what can be done with this new mobile graphics chip. Now, don’t get me wrong. Storage space will be an issue, but as far as power, and capability is concerned. They may have that figured out.
This is assuming many things, that may not be valid assumptions.
First, what is the price of the Apple TV 4th Gen? Are they going to throw in Console quality graphic processing, memory, a touch screen remote and Siri and keep the $69-99 price point? Call me Mr. Dubious. With this level of capabilities, I’m thinking Apple will be well beyond the $200 price point – which invites Roku and others to undercut them, in a very big way.
What do people actually want? Do they want a PS4/XBOne contender? Nope.
People want an alternative to Cable and Satellite subscriptions – and that’s where I will place my money.
“What do people actually want? Do they want a PS4/XBOne contender? Nope.”
YES. The majority of people just want that from Apple.
And if Apple is not going to deliver that then it is going to be a huge mistake.
The PS4 and XBoxOne are the worst consoles ever released with the crappy obsolete slow AMD APU Jaguar.
>> What do people actually want? Do they want a PS4/XBOne contender? Nope.
> YES. The majority of people just want that from Apple.
I agree with hodar0. I’m not interested in console gaming at all, but I’ve been waiting for an app store on the Apple TV literally since version 1 came out.
After eight years on the market, cumulative all-time sales of the Apple TV are in the 25-30m units range. The PS4, Xbox One, and Wii U have collectively sold around 50m units in the last three years alone, and the prior-generation Wii (released a few months before the original Apple TV) has sold over 100m units. It was the best-selling Nintendo console of all time, and one of the most popular devices ever sold for connection to a TV.
It’s hard to say for certain what the “majority” of people want from Apple, but right now, the Apple TV’s users represent a minority of the market. I think the actual addressable majority of people is at least 3 or 4 times larger than the Apple TV’s current customer base, and console games are definitely something that definitely brings many more customers to the table.
I disagree with your statement, sir. Even if the majority of console (not PC) gamers wanted an alternative to PS4/XB1, which I don’t believe they do (I know I don’t), I don’t think they’d be looking to Apple for a way out. To be honest, I think they’d look to Nintendo for a blitz (which I don’t think is all that common, either), before looking to Apple – even Steam Machine would be higher on a gamer’s list as a hopeful game-changer. Judging by your two replies, thus far, I’d assume you abhor the AMD APU Jaguar – I digress.
You also need to understand that the Apple TV, like all other non-Pro Apple products, is geared toward the general consumer (albeit at a Pro or rabid-fanboy price tag). And as such, they won’t be looking to release a competitor to proper game consoles (just like Mac computers don’t try to compete with gaming PCs). That being said, taking part (majority) of a slice (gamers) of a pie (all consumers) hardly equates to a majority of that pie.
The PS4 is selling even more quickly than the PS2 did, so your technically illiterate babble is clearly an opinion others do not share.
The PS4’s specs are fine for its price point. Look at what is required to run multi platform games to beyond PS4 levels (typically 1080/30) on a PC. You’ll be spending PS4 money on the GPU alone.
The last Apple TV was essentially a cut-down fifth-generation iPod touch with an HDMI port. Half the storage, no screen, no cameras, no metal body, no microphones, flash, or sensors, half the processing cores, and at $99, half the price of the 16GB touch. We’ll have to see whether Apple follows the same hardware strategy this time relative to the sixth-generation iPod touch, and just what comes in the box for the entry-level price.
The lack of followthrough and dependency on gaming generating any serious revenue (compared to iPhone revenues) means there will be years between updates sometimes. The PS4 and Xbox One are better values for the money precisely because they compete fiercely with each other. I can’t see Apple ever getting into that game, there’s no incentive.
I think it’s largely dependent on input method, though. If ATV4 uses the same peripherals as ATV3 and below, even with an upgraded remote (thinking Wii-esque capabilities), then I wouldn’t be willing to pay more than $30 – preferring a $19.99 price point. If ATV4 uses a physical game controller, akin to PS4 or XB1, then I would be willing to pay $50+ for MGS: The Phantom Pain, and the like.
It would be nice if the poll had an “I’m not interested in console games on the Apple TV” option.
Added.
The Apple Music model will work here. Allow users to pay $5/month for unlimited paid iOS app downloads. Apps are what makes iOS great, right? That’s what the latest round of “It’s not an iPhone, if it’s not an iPhone” ad would have us believe. Often, the best apps are the ones you pay for. However, many people are put off by $10 price tags. A subscription model will be beneficial to the developer and to Apple.
Developers will be able to make a good chunk of change from receiving a download kickback, and then additional funds if the user opens the app and uses it. Instagram, Facebook, Twitter and Tumblr could all do away with ads in the timeline on iOS. Many others could remove the ads they are currently running as well.
Now, why paying when an app is used is great for the user: it incentives developers to create great apps. A poor app you’ll open once or twice and then delete. A great app you’ll use almost daily. If not multiple time each day.
I honestly believe that this model could expand to the Mac App Store. Just look at the Adobe Creative Suite.
So, I currently own (IIRC) 4 Apple TVs. 1xGen1, 1xGen2 (jailbroken and running firecore), and 2xGen3. Like you, I’m a regular user: I actually enjoy using it and I’ve successfully cut the cable TV cord: I’m still paying the cable tax, but only for an Internet pipe (and I’d drop that if I could get an independent connection, but I simply can’t where I live.)
I think you’re missing a VERY important piece in your analysis.
An Apple TV which is what we currently have is, well, almost “free” for Apple to create and maintain. It’s using the same hardware as the iphone/ipad/ipod, but with fewer features and a simpler design spec/requirement. Essentially, it costs nothing and does “enough”.
So what would it take for Apple to do more?
Option 1 : An open app store.
Costs: Apple would have to maintain yet another app store, with yet another set of device specs, etc. Manageable, sure, but the user interface is so dramatically different that there’s little to no guarantee that it will actually succeed.
Benefits: 30% cut on apps. Yawn: this has been done. Sure, it works, but it’s not “amazing!” enough to make it a no-brainer….
Option 2 : Provide a streaming TV service
Costs: Licensing with TV providers. This is almost impossible, and I don’t think Apple can do it (I don’t think _anyone_ can do it) in a “here’s everything!” model, so instead we see what we have now: one at a time, piecemeal offerings.
Benefits: The holy grail to bring down big cable. Massive re-thinking of the entire video distribution model. Seriously big things go on here, and the upside is, well, MASSIVE: Whomever gets this done in a “universal” way will succeed in ways that NOBODY has been able to succeed in the past.
Clearly, I think this is what Apple wants. And cannot do.
So the next part of your analysis that’s missing is:
If Apple _did_ option 1, would they be ABLE to do option 2… ever?
I don’t think so. If they do option 1, then company X comes along and presents their own app that does the same thing and Apple’s now in competition. Apple doesn’t get credit for Steve’s big idea of “fixing” tv, and the massive profits which could come with it disappear.
Whereas if they do nothing (i.e. what they’ve done so far) or if they go incrementally (HBO Now, etc) then the “super awesome big picture” is still alive.
Even if it can’t happen (no way in hell that anyone could get Fox (hulu) and NBC (comcast) to agree on a mechanism to provide streaming over the internet for cord cutters in a way that APPLE [or anyone else for that matter] gets the credit and the profit!)
They did option 1 already on iOS devices, which can stream to the Apple TV. It doesn’t preclude them from doing option 2, which at this point sounds like ‘replacing old cable provider channel bundles with new Apple-selected channel bundles.’ In fact, if they hadn’t done option 1, they would not be any closer to number 2 than they are right now — they’d be far further off. And in all honesty, I don’t know that an Apple-selected channel bundle is really a good thing. I personally have no interest in buying a bundle of channels. If I did, I’d still be a cable subscriber. Which I’m not.
The presence of the App Store and buy-in of the entire galaxy of programmers into the reality of alternate streaming options for their content have made a transition of this type (from unwanted bundles to a la carte channels) foreseeable if not inevitable. Those channels in many cases exist right now as apps because iOS customers were willing to download and in some cases pay for them. Multiple articles about negotiating failures and delays of updated Apple TV hardware based on waiting for some big silver bullet solution strongly suggest that Apple hasn’t been able to make the bigger thing happen. So it’s time to do what Jobs would have done and launch anyway.
The results show why this won’t work. Most popular? No more than $20, followed by no more than $10 and $30. AAA games on PC/PS4/XBOXOne are in t he $50-$60 range. If people who own or are likely to buy an ATV4 won’t pay that much… why develop for the platform?
Because a lot of the cost of console games is due to physical goods manufacturing, distribution, retailer overhead, and the ability to resell – all eliminated via digital. Same game doesn’t need to be $50 or $60 if middlemen are cut out and there is no reselling of the game after purchase.
Just to let you know, you can purchase digitally, all PS4 games now. Guess what they cost? The exact same $60. They give you no break at all. The only thing you get out of it is that you can immediately play the game at 12:00AM the day it is released as opposed to having to wait in a line at GameStop or the like, or getting it the following morning.
They can’t and won’t develop for the new Apple TV IF there is no Apple designed controller, or the ability to use the PS4 controller. The garbage third party (and I don’t count Sony as third party here because it is the best controller ever designed) MFi controllers which no one owns and wouldn’t buy because they are awfully designed and MORE EXPENSIVE than a PS4 controller which is the best designed on the planet, will NEVER be popular or drive AAA developers to put their apps on it. The most important part of gaming is the controller and if you neglect that (like Apple has and will) you are too incompetent to deserve to make money from gaming. The fact is, you’re not going to see Call of Duty Black Ops 3 on an Apple TV (yes it would be far worse graphically), because there is no controller that any consumers have, that would enable them to play that game, and thus, the developer would never dream of releasing it on the Apple TV App Store. It doesn’t matter if you charge $60 on the App Store, people would buy it if Apple designed a controller you could purchase separately for it.
Not interested in gaming on an Apple TV. I use Apple TV for watching Netflix, movies, videos and music. I use my PS3 and PC for gaming. (Soon to get the PS4 Star Wars Battlefront Bundle :D) I have no desire to play on an Apple TV mainly because it’s most likely going to lack the social part of gaming. Playing with friends is the best!
Apple should add an App Store and get developers to optimize/develop their apps/games for Apple TV. But Apple shouldn’t try to make the ATV into a console at all.
I love gaming, but with a wife and two kids there is no room or time for a PS4 or Xbox. If apple would give me a serious controller and decent games available on the ATV, I would definitely pay $20-40 a game just to get some late night gaming in. I own an ATV anyway for watching TV, so games would be a bonus feature without the need to explain why I want a gaming console. Don’t underestimate the casual gamer market.
It will never happen unless one of two things happens: Apple releases their own Apple designed gaming controller, or Apple allows the PS4 controller to be used on the Apple TV. End of story. The tactile, ergonomic, well known, designed, respected, and cheap (in price compared to every abysmal expensive MFi piece of trash) controller is the MOST important part of video gaming.
I think the pool hints a little as to why Apple may not have pull the trigger yet.
Believe it or not many game developers and publishers don’t make that much charging $60 a game. Many games loss money unless they sell a million copies or more. Sure your big houses like EA and Take 2 do just fine because they have many big name franchise to re-tap to bring in cash but mid and small tier houses can’t make console level games for less than what it takes to make a movie these days. At $20 a game minus Apple’s 30% cut I don’t think most big name games would be viable.
Add the fact that peoples expectations of a game on their TV is very different than their expectations on a mobile device (I know mine are) and I think you have to answer to why it may not have been tried yet. Even Nintendo who many consider to be like Apple can’t sell games for less than $50 and still be profitable.
Indie developers will get in and thrive for sure but without big named quality titles I’m not sure the AppleTV game market or use as a serious console would take off (this isn’t even taking into account the hardware limitations that exist in the current models).
All that being said I would welcome an App Store on the AppleTV, I just think they may not have done it yet because they may not think it is a viable revenue stream or able to seriously compete yet.