21 Aug

Apple Arcade Could Win Customers with Attractive Pricing

WRITTEN BY Sharon Bailey

Apple’s (AAPL) is rumored to be offering its upcoming gaming subscription service, Apple Arcade, for $4.99 per month. Guilherme Rambo from 9to5Mac revealed the expected price of Apple Arcade based on a promotional message in one of the application programming interfaces used by the Apple Store app. 9to5Mac gained access to a special early access program of Apple Arcade. This early access was offered to Apple employees for $0.49 per month and included a one-month free trial.

Apple introduced its Apple Arcade subscription service back in March. The gaming service will offer over 100 new and exclusive titles. It works across Apple’s platforms, including the iPhone, iPad, Apple TV, and Mac. Apple Arcade will offer exclusive games, including originals from popular creators Hironobu Sakaguchi, Ken Wong, and Will Wright.

The gaming service will have no ads, will require no additional purchases, and will respect user privacy. It will also provide access to multiple family members via a Family Sharing account. Apple’s upcoming September 10th event could shed more light on the pricing of the gaming service.

According to Bloomberg, Apple is also gearing up to launch Apple TV+, its movie and TV subscription service, by November. Apple TV+ could be around $9.99 per month. It will compete with the likes of Netflix and Amazon in this space.

Apple Arcade to boost Services business

Apple Arcade is another strategic initiative Apple is undertaking to boost its Services segment. The tech giant’s Services segment and wearables category are generating strong revenue growth. These businesses are helping the company mitigate the impact of the continued decline in its iPhone revenue.

This year, Apple has already launched Apple Card and Apple News+. In March, Apple launched Apple News+, a subscription service that gives access to more than 300 popular magazines, newspapers, and digital publishers. The company is offering Apple News+ for $9.99 per month in the US and $12.99 per month in Canada.

The Apple Card is currently available to all US customers. Apple partnered with Goldman Sachs to issue it. The credit card offers a 2% cashback bonus when purchases are made using Apple Pay.

Each of these services will help Apple achieve its goal to generate Services revenue of $50 billion by 2020. In the third quarter of fiscal 2019, Apple’s Services segment generated revenue of $11.5 billion, reflecting 12.6% year-over-year growth. The segment accounted for 21.3% of Apple’s overall revenue in the third quarter of fiscal 2019 compared to 19.1% in the third quarter of fiscal 2018. In comparison, the company’s iPhone revenue fell 11.8% to $26 billion and accounted for 48.3% of its overall revenue in the third quarter. iPhone revenue contributed 55.3% of Apple’s revenue in the third quarter of fiscal 2018.

Apple Arcade will have a tough rival in Alphabet subsidiary Google’s (GOOG) cloud gaming service, Stadia. Customers are looking forward to Stadia’s expected launch in November. A Stadia subscription is available for $9.99 per month. The price of an Xbox Game Pass for PC is $9.99 per month.

With Apple Arcade, Apple is looking to capture growth in the $180 billion gaming industry.

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