Services Strategy at Apple’s iPhone Event
Apple spent an hour and forty minutes presenting a slew of product updates across their lineup of hardware, software, services, and even stores. As the day passed and I let Apple’s keynote hype machine fade into memory, a few strategic moves in Apple’s services announcements stood out to me as particularly interesting.
For those of you who may not know, Apple Arcade is a new “Netflix for gaming” service from Apple, launching September 19. It’s priced at $4.99 a month and provides access to 100+ ad-free games that require no additional purchases to play.
This is a direct response to the incredible popularity of iOS games that use casino-informed designs to cause addiction and get users to spend large amounts of money or watch ridiculous numbers of ads.
As these types of games have taken over the App Store’s top charts, beautiful indie games have become less financially viable and horror stories of people spend huge amounts of money on “coins” have become more common.
Although the details aren’t fully public, Apple is funding the development of Apple Arcade games up front and continuing to pay creators on an ongoing basis. For studios who want to build great games without having to focus on in-app purchase conversion metrics and who are selected by Apple to build Apple Arcade games, this may provide financial viability.
The $4.99 per month price point is reasonable for an individual, but it gets quite interesting for families with kids. That same price gets up to five family members access to all of those games within their own accounts.
In the end it comes down to the quality of the games within Apple Arcade. If the games are good, I think it will be successful.
Apple TV+ is Apple’s new streaming video service coming November 1. Apple isn’t renting a back catalog of content from any of the large content companies. Instead they’re filling the service entirely with original content. They’ve already announced content from big-name stars like Oprah, Reese Witherspoon, Jennifer Aniston, Steve Carell to name a few.
This streaming service was originally teased in the spring, and in the time since then, at least in my circles, the excitement for Apple TV+ dropped precipitously, especially after Disney announced their Disney+, Hulu, ESPN+ bundle for $12.99 a few weeks back.
Two things in today’s Apple TV+ announcements brought back the excitement for me.
Apple TV+ is priced at $4.99 per month for a whole family. This is a competitive price at the low end of the market.
Apple TV+ will be free for 1 year to anyone who buys a new iPhone, iPad, Apple TV, Mac or iPod touch starting September 10.
Apple sold 217 million iPhones in 2018. If we assume Apple will sell a similar amount over the next 12 months and we ignore the tens of millions of people buying iPad, Apple TV, Mac or iPod touch over the next year, that still puts Apple TV+ in the hands of hundreds of millions of people for free.
People like free.
Over the next week or so I’ll be releasing two new podcast episodes that will dive deeper into what Apple has announced.
Accessible: Steven Aquino and I will talk about the accessibility impacts of everything Apple announced as well as what it was like for Steven to be at another Apple event.
UNCO: As a follow up to my pre-event interview with Guilherme Rambo and another episode in my The Future of Apple series, I’ll be sitting down with another 9to5Mac writer, Benjamin Mayo, to discuss what this event’s announcements mean for the future of Apple.