When I say “Game Company”, you think of
Nintendo, Sony, Microsoft, those who shall not be named Unless you have a really good memory, or really
love Chess , you don’t think of Apple. And for pretty good reason. You can drop $13,000 on a brand new iMac Pro
and only have a decent gaming machine, and because it’s not upgradable, not for very
long. But, hey, it is space grey. (fading out) Macs can play games the same way a Smart Car
can drive cross-country. Sure, it’s possible, but kinda by accident. Apple may have far more resources than Microsoft
or Sony, but to make a gaming platform, they’d really have to want one, and right now, they
just don’t. At least, that’s how it looks. For many people, computers are just Facebook
or YouTube or Email machines, For them, a phone or tablet, is, increasingly,
good enough. The trend is portability over performance,
which isn’t so good for the PC market. But there’s one big exception: PC Gaming. It has all the characteristics of a tiny,
niche market, but it isn’t. It’s actually growing. Many gamers buy parts to build their own computers,
and regularly upgrade them to keep up with new games. This saves a lot of money, and, for companies,
margins are pretty low. So as much as Jony Ive would love to fix this
and this, Seriously, these look ridiculous, it just doesn’t fit Apple’s strategy. Big, upgradable, machines, sold for low margins
are pretty much their nightmare. Apple will pass on billion dollar industries
without blinking an eye if they don’t have something significant to add. So a chart like this one looks terrible for
Apple, Android phones dominate the globe, but Apple doesn’t really care because of
this: They’re happy selling fewer phones, because
it fits their strategy, they’re just so good at making profit. But that’s actually precisely why they already
are in the business of gaming, they just have a very different approach. For you, gaming may look like this, or this,
but the truth is, for even more people, it looks like this Mobile gaming is a 46 billion dollar market,
more profitable than PC games, console games, even global box office sales. On any given day, Candy Crush alone makes
2 million dollars, Fornite is expected to make half a billion dollars this year. Not bad at all. And Apple takes a 30% cut of all App Store
revenue. Obviously they aren’t only or mostly a game
company, but at this point, it’s hard to deny they aren’t a game company. You might be thinking, Apple just stumbled
into this, they’re no more a game company than your internet service provider is a YouTube
company. But the App Store isn’t just another app
store, it’s really the game store. THE game store. The App Store is 25% games, far more than
any other category. Last year they redesigned the entire store
to emphasize them. And game developers love the Store just as
much as the store loves them. Good games are expensive to make, Even what
seems like a simple game may require a team of programmers, another for art, and music,
and writing, and marketing. Like movies, it’s a huge up-front investment
with a lot of risk. But the promise of digital goods is that once
they’re made, they’re made. No manufacturing, or transportation, or stocking
costs. One game, one click of a button, now millions
of people can download it. But because Google says Here’s some software,
now go make phones and manufacturers are desperate to stand out, Android is a nightmare for game
developers. There are two inch Android phones, probably
two meter Android phones, and everything in between. Do you want a phone that can tell you how
fat you are? How ‘bout one engraved with Colonel Sander’s
face? If you can think of it, Android has it. And they’re all sprinkled between a million
different versions of android. When you’re making a game, this means accommodating
tens of thousands of different phones. Not so fun. Compare that to iOS, and you can see its appeal. 76% run the latest iOS version. On Android, it’s only 5%. This is why Apple is so pesky about updating
your phone - it adds a ton of value to their company. And, sorry, Microsoft Store, it might be really
easy to develop for you, but nobody has a Windows Phone. Apple also has the advantage of designing
its own processors. Which means developers can make better, crispier
games on iPhone. They’re kinda embarrasingly faster than
some of Apple’s own laptops. But the biggest reason companies choose the
App Store is simple: iOS users pay twice as much for apps. Games like Super Mario Run and Fortnite came
to iOS first because that’s where the money is. And Apple is very aware. They’ve partnered with Nintendo, Epic Games,
EA, thatgamecompany, even scarf guy. The iPhone, iPad, and still a product in our
lineup, iPod Touch are maybe the most popular gaming devices. But there’s still a lot more Apple could
do. In 2015, Apple announced a new generation
Apple TV. Not just an expensive way to watch Netflix,
more a computer. It still plays Netflix, and Hulu, and eventually
Amazon, but it’s a general purpose entertainment device. It has its own app store, with games, even
third party game controllers. It’s no Xbox or Wii, but it has the potential
to become the console for casual gamers. But they made one major mistake: Games had
to be compatible with the built-in remote. But the remote… well, it sucks for gaming. And because of that rule, games could only
be as good as the remote. (not very good) Apple has now reversed that decision, but
now they’re having a chicken-or-egg problem. For many people, there aren’t enough good
games to buy an Apple TV, but developers won’t make games until there
are more people to buy them. Sooo, which comes first? And a lot of games now require a controller,
but nobody has one. So, here’s an idea: what if instead of selling
two sizes of the Apple TV, they sold two versions: For gamers, a more expensive, higher performance,
higher storage model that comes with a controller, And a slightly cheaper, lower performance,
lower storage version for everyone else. More people would have controllers, which
would bring more and better games, which brings even more people, and so on. It might still be tough getting developers
to make games for the Apple TV, but there’s good reason to think Apple’s working on
that, There’s a rumor they’ll allow developers
to make one app for several platforms. So instead of having to make one version of
their app for Mac, and one for iOS, or more likely, just doing the latter, they could
kill two birds with one stone. If this also worked for Apple TV, it could
bring a ton of new games to the platform. Apple is in a great position to create a very
profitable new gaming platform, especially with how ruthless game companies can be. The new YouTube channel Cheddar has a video
about this very topic - how games use microtransactions and pay to win purchases to maximize profits. It also makes an interesting counter-argument
I hadn’t really thought about - that one benefit of these “free to play” games
is that they’re accessible to everyone, even if you don’t have disposable income. But, as they mention, it’s reached crazy
levels with games like BattleFront II. Cheddar has very generously sponsored this
video because if you like my videos, you might also like theirs. There’s a link in the description to watch
their video on Pay-to-Win gaming, or you can check out some of their other videos, like
Cheddar Explains the Dot Com Bubble, a topic I’ve always heard about, but having been
born right in the middle of it, didn’t know much about. Or, Cheddar Explains the Future of Cable TV
- how younger generations are forever changing the industry. All of those will be in the description! And thanks again to Cheddar for supporting
the channel.
