Apple reportedly spending $500 million to fund development of 100+ games for its Apple Arcade subscription service

Who knew, Apple has deep pockets? The company is reportedly spending billions of dollars a year on Apple TV+ original content, will pay about $480 million for the Texture acquisition which ultimately became News+, and is reportedly also spending several million dollars per game in Apple Arcade.

The Financial Times says the company is spending ‘several million dollars each’ on more than 100 games, putting Apple Arcade’s budget in excess of $500 million dollars. At its March event, Apple announced that Arcade would launch in the fall but did not announce pricing.

The report also says that Apple is offering an ‘extra incentive’ to a developer if their game remains exclusive to Apple Arcade.

Our sources indicate that all Apple Arcade games will not be offered on Google Play Store. The deal is essentially ‘mobile exclusive’, so developers will be allowed to launch on games consoles like PlayStation, Xbox and Nintendo Switch — just no Android. Arcade games will not be sold in the App Store as normal downloads.

The customer pitch for Apple Arcade is an alternative offering to the countless freemium games that dominate the App Store charts. For one monthly fee, users can play any game in the Arcade catalog. An Apple Arcade game will have no additional purchases or upsell, no limited levels, and no ads. Arcade games will also not be able to share any data with publishers unless the customer provides explicit consent.

These games will be available across iPad, iPhone, Apple TV and the Mac, with iCloud cross-platform sync to save progress. Games are downloaded to the device, not streamed, so they can be played offline.

Apple announced Arcade with some big names like Sonic and Lego partnerships, but mostly concentrated on promoting indie titles. In addition to funding advances, Apple is also believed to be assisting with engineering and helping developers deploy their game engines across Apple’s operating systems.

With $1-3 million dollar advances paid upfront, developers can take their time to invest in high-quality games without having to worry about how they are going to pay for the development resources if the title does not sell well when it is released.

Once Arcade launches, it is believed that game developers will receive ongoing revenue based on how much time users spend playing their games. For News+, Apple keeps 50% of the $9.99/month subscription fee and shares out the remaining 50% to publishers based on engagement with their respective content. However, exact terms for Arcade remain unclear.

Apple Arcade launches in the fall, likely as part of iOS 13. Pricing is yet to be announced — most analysts expect it to cost around $9.99 per month.