Pachter: Apple 2013 Console

[patsu]

Some more news if you're interested in Apple's TV effort:
http://www.appleinsider.com/article...isplay_components_from_major_tv_supplier.html

Piper Jaffray's Gene Munster told investors on Tuesday that he had recently spoken to a "major TV component supplier" about Apple's rumored plans to release a connected HDTV. Sources within the supplier reportedly told him that Apple had contacted "regarding various capabilities of their television display components."

...

Munster concluded his note by pointing out that Apple only enters mature markets in order to reinvent them. As such, he does not see Apple entering the TV market without a "revamped TV content solution."

...

A number of patent applications discovered by AppleInsider for technologies such as advanced backlighting and a simplified universal remote also indicate that Apple is, at the least, investigating the possibility of a full-fledged television set.

Amazon Kindle is another potential tablet gaming platform...
http://www.appleinsider.com/article...eet_estimates_kindle_sales_nearly_triple.html

The Kindle Fire maker did not disclose how many e-reader and tablet units it sold during the last quarter, though it did note that the Kindle line of products was up 177 percent from the same period a year ago. Today's results are in line with Amazon's December press release that claimed the company's new Kindle Fire tablet had sold "millions of units."

...

While the online retail monolith hasn't come close to matching Apple's success with the iPad, at least one analyst notes that Amazon is dominating the low-end tablet market with an estimated 6 million Kindle Fire sales.

 

[Shifty Geezer]

Yes, but your previous statement of "Not only do you get away from licensing/royalty costs to the platform holders" is false.

They don't get away from licensing/royalty costs. In fact, the platform licensing/royalty percentage of the retail cost of software is even bigger on IOS than it is for Sony/MS.

I'm not sure that those cuts count as licensing so much as middleman percentage. The difference is licensing is money lost regardless of sales. Pubilshers pay MS/Sony per disc printed, whether they sell or not, and licensing is permission to print games that work. Digital distribution means a channel to sell where the store-front takes a cut for providing the service.

That may be nitpcking semantics a bit, but it's still important. There are no up-front costs to release an iOS game where there are a console disc game. Of course, the same format works for all DD, and there's no game on iOS that can't be released on a consoles downlaod service for the same price reductions versus retail.

 

[patsu]

I took a stroll past the AppleStore in Valley Fair over lunch time. Noticed that they added game accessories since the last time I visited them.

They now sell Karaoke mics, Atari arcade controller (a la coin-op console), set of 4 one-button controllers (like Buzz !), interactive game board (iPad acting as game board with toys and set pieces moving on the screen as touch input), and doodling pen.

The most interesting is probably the game board idea. I can see WiiU extending it with NFC so toys moving outside the screen can also affect gameplay.

 

[TheChefO]

Epic's perspective:

So 1.6million copies of the "AAA" Infinity Blade were sold on OS' userbase of how many million?

So over 200 million userbase and the best they can muster for a real experience (not a free/$1 time-waster) is 1.6million for an "expensive" $6 game.

Don't get me wrong, profit is profit. The fact that it cost less than $10million to produce is good, but I'm not seeing how IOS (as it exists on the platform types that it exists on) is supposed to be a threat to traditional consoles.

How many units did COD move again?

At what price?

 

[TheChefO]

I'm not sure that those cuts count as licensing so much as middleman percentage. The difference is licensing is money lost regardless of sales. Pubilshers pay MS/Sony per disc printed, whether they sell or not, and licensing is permission to print games that work. Digital distribution means a channel to sell where the store-front takes a cut for providing the service.

That may be nitpcking semantics a bit, but it's still important. There are no up-front costs to release an iOS game where there are a console disc game. Of course, the same format works for all DD, and there's no game on iOS that can't be released on a consoles downlaod service for the same price reductions versus retail.

Good point on upfront costs for retail Discs.

Now how does that work for the games-on-demand titles where no box is involved, yet the cost and product are identical to retail?

 

[patsu]

So 1.6million copies of the "AAA" Infinity Blade were sold on OS' userbase of how many million?

So over 200 million userbase and the best they can muster for a real experience (not a free/$1 time-waster) is 1.6million for an "expensive" $6 game.

Don't get me wrong, profit is profit. The fact that it cost less than $10million to produce is good, but I'm not seeing how IOS (as it exists on the platform types that it exists on) is supposed to be a threat to traditional consoles.

How many units did COD move again?

At what price?

Not every game is COD though.

That 200 million user base will take their own sweet time to get acquaintance with Infinite Blade. Plus the base is increasing rapidly as well. My family for one haven't tried Infinite Blade.

That's partly why I don't think iOS diminishes gaming market. It may actually expand the industry by leaps and bounds. Since cost is low, developers should be more free to explore new things. That should mean failure rate may also be high.

Now if the content resonates with the iOS/Android mob, then the numbers can be impressive. Angry Birds is probably one of the most successful iOS/Android games:
http://www.industrygamers.com/news/angry-birds-one-of-the-most-profitable-games-in-history/

The free version on Android is said to take in $1 million ad dollars per month. These are all old numbers.

Besides all sorts of big and small stuffed toy birds and pigs, I also saw photos of Angry Birds decor in major shopping mall Christmas decoration worldwide. That kind of mindshare is priceless for a game company, or rather any company.

I don't know how many copies CoD 1 sold, but as a first game, Angry Birds did pretty well by any standard. If Rovio executes well, there are more interesting and premium follow-ups.

EDIT:
'Angry Birds' movie coming to the big screen
http://www.mnn.com/lifestyle/arts-culture/blogs/angry-birds-movie-coming-to-the-big-screen

 

[Shifty Geezer]

So 1.6million copies of the "AAA" Infinity Blade were sold on OS' userbase of how many million?

Don't get me wrong, profit is profit. The fact that it cost less than $10million to produce is good, but I'm not seeing how IOS (as it exists on the platform types that it exists on) is supposed to be a threat to traditional consoles.

You don't think that from 0 rivals to 1.6 million on a device not made for gaming doesn't represent a threat to consoles? Clearly the mobile iOS devices are showing that people are willing to game on tablets. Make a beefier tablet or home box that let's you play the game on your TV in better res, and then carry it around with you also...and you don't think any gamers would value that? It's a clear and compelling value proposition that'll only eat into the standard console budgets, whether that remains a few percent or tens of percent. Those sorts of figures cannot be predicted but the console industry is going to have to watch it and can't ignore it as you seem to feel its safe to do so.

Good point on upfront costs for retail Discs.

Now how does that work for the games-on-demand titles where no box is involved, yet the cost and product are identical to retail?

I've no idea, but given that the overheads and licensing fees on DD are reduced (no licensing fees), I'd say these full price games are just massive profit margins to keep the BnM stores happy.

 

[zed]

So 1.6million copies of the "AAA" Infinity Blade were sold on OS' userbase of how many million?

So over 200 million userbase and the best they can muster for a real experience (not a free/$1 time-waster) is 1.6million for an "expensive" $6 game.

well those were early figures, the latest from what I can see is 3.8 million copies.
Which aint too bad but the thing is the 'AAA' aint the big sellers on IOS
its the smurf village, angry birds, cut the rope etc 'non AAA' games

 

[AlphaWolf]

Could we stop suggesting that Infinity Blade is a AAA title? It might be a graphics showcase for ios, but it hardly compares to games like Gears or Halo or Uncharted.

 

[zed]

Just saw on gamasutra, which emphatically defeats the idea that launch price = how much the app will bring in.
Its a completely different model with IOS games to console games, so you cant compare $0.99 vs $60 as in reality its $0.99+lots of extras vs $60.
I wonder if console games will follow this model in future?, Im guessing not but you never know

This week's top-grossing iPhone titles are:

1. DragonVale (Free)
2. Poker by Zynga (Free)
3. Temple Run (Free)
4. Where's My Water? ($0.99)
5. World War (Free)
6. Scramble With Friends ($0.99)
7. Card Ace Casino (Free)
8. Slotomania (Free)
9. Stardom: The A-List (Free)
10. Kingdom Conquest (Free)

Here are this week’s top-grossing iPad applications:

1. DragonVale (Free)
2. Modern War (Free)
3. Battle Nations (Free)
4. Slotomania HD (Free)
5. Smurfs' Village (Free)
6. Slotomania (Free)
7. Card Ace Casino HD (Free)
8. Poker by Zynga (Free)
9. Mystery Manor: Hidden Adventure (Free)
10. Tiny Zoo Friends (Free)

 

[TheChefO]

Not every game is COD though.

True, but I was simply comparing the most successful AAA game on HD consoles VS the best AAA game on IOS.

Apples to apples so to speak.

That 200 million user base will take their own sweet time to get acquaintance with Infinite Blade. Plus the base is increasing rapidly as well. My family for one haven't tried Infinite Blade.

That's probably because it costs $6. And your family's quality gaming needs are being met by other devices. If they don't game on MS/Sony/Nintendo, they're probably just using the cheap/free games on IOS as time-killers in downtime.

As I said, IOS has tons of users and tons of games and tons of users who download games, but that doesn't make it a gaming platform.

Just like Windows has billions of copies of solitaire shipped worldwide since the early 90's, but I don't think anyone would confuse every PC sale as a gaming box.

Same goes for Facebook. Is Facebook also the death of consoles? Zynga the new EA?

Different markets.

Apple will have to do a lot of work to actually convince people to buy a device for the purpose of gaming.

Some here have mentioned the concept of Apple using something else as a method to lure in buyers to get the ibox into the livingroom, but much like Nintendo's effort to repeat the magic of Wii in Wiiu, I'm not seeing it.

There are plenty of other boxes and devices which do the media stream to the TV deal. There's Google and AppleTV also. None of them compare to consoles when it comes to moving units into livingrooms.

Perhaps Apple will defy all logic and not have AppleTV3.0 type failure, but I'll believe it when I see it.

Apple will need to compete toe to toe with consoles to succeed in getting ibox to the livingroom in any meaningful way.

That's partly why I don't think iOS diminishes gaming market. It may actually expand the industry by leaps and bounds. Since cost is low, developers should be more free to explore new things. That should mean failure rate may also be high.

Agreed.

As I said, there are a ton of great time-filler apps on IOS which can be downloaded for free and fill the gap between meetings, in transport, or any other time between events.

But that's all.

Anything above and beyond involving real money especially at home, will require greater effort and the IOS model will be difficult to stretch to livingroom purchases as a means to the center of entertainment.

Now if the content resonates with the iOS/Android mob, then the numbers can be impressive. Angry Birds is probably one of the most successful iOS/Android games:

Anyone would be a fool to argue angry birds didn't make a killing, but it was also hyped and marketed and advertised for, like mad. That costs money to do. They bought themselves a very successful franchise, congrats to them. But again, we are talking about cheap/free software on devices which are not luring consumers in based on their gaming prowess and ability.


Free will always be easy to "sell".

 

[TheChefO]

Could we stop suggesting that Infinity Blade is a AAA title? It might be a graphics showcase for ios, but it hardly compares to games like Gears or Halo or Uncharted.

That's kinda my point.

But, that's as good as it gets on IOS, so Apples to Apples...

 

[TheChefO]

... the thing is the 'AAA' aint the big sellers on IOS
its the smurf village, angry birds, cut the rope etc 'non AAA' games

Of course!

People don't buy IOS for games ... they download something free/cheap, fill the downtime with it, and move on with their day ... and then head home and watch movies/tivo, or game on a console.

 

[TheChefO]

You don't think that from 0 rivals to 1.6 million on a device not made for gaming doesn't represent a threat to consoles?

No.

Just as I didn't consider phones with "gaming apps" in the late 90's early 00's or zune-type devices to be threats to consoles.

To portable gaming devices? Absolutely! Nobody wants to carry around a half dozen devices especially when the one in your pocket (or ipad in a bag?) can suffice for a quick & cheap/free way to pass the time on the go.

At home is a different story.

If people were really enthralled with the notion of cheap gaming at home, we'd see sales of indie games (which nearly match the IOS model of cheap) flying through the roof.

Fact is, at home people want deeper/richer experiences.

And yes, even the Wii fits this description for the young ones (and their moms) I suppose.

 

[patsu]

Fact is, at home people want deeper/richer experiences.

And yes, even the Wii fits this description for the young ones (and their moms) I suppose.

I see people play iOS or Android games at home too. Some of them do it in the toilet. Some lie on the bed or couch. Some in the living room even if the home consoles are there. They will game everywhere/anywhere. It's just a matter of what's hot right now (e.g., brag to friends in school about scores/levels completed tomorrow). They simply toggle between the consoles following the game and trend.

And yes, iOS games can be addictive too. There is an overlap but developers will differentiate the games better along the way. Or some will have games on both sides.

 

[Shifty Geezer]

No.

Just as I didn't consider phones with "gaming apps" in the late 90's early 00's or zune-type devices to be threats to consoles.

Well I consider you short sighted. The PC that is the epicentre for the development of all gaming hardware started out a business computer. 3D gaming beginning with Wolfenstein 3D and DOOM was on work computers; it started with people buying a machine to do work and used it to play some of these new fangled game programs when they had a spare moment and these games started to appear. If you want to believe iOS will never support more impressive games than Infinity Blade and sales will never get more than 2 million for a major title, that's your pregrogative, but where I very rarely will get called on a prediction, I for one can see iOS definitely being an option for 'proper' games and expect this market to grow notably over the coming years. The main limiting factor is control. As I say, if some game came bundled with a dual-stick controller, I'm sure people will start chosing to buy £400 iPads and gaming FIFA/Madden etc. on that, rather than buy a £200 console. I'll bundle Android in with that as well, as iOS and Android are two flavours of the same changing market and I won't be held as wrong if iOS crumbles and Android tablets become the gaming platform for many.

 

[AlphaWolf]

ah yes all those people lining up to pay $60 to play madden online with a touch interface.

 

[wco81]

Fact is, at home people want deeper/richer experiences.

How much longer is this going to be true, if gamers also buy mobile devices? If nothing else, the money they spent elsewhere may reduce the money they would spend on core gaming.

In a lot of ways, digital convergence has made the "good enough" principle true. Lossy compression for music is "good enough" for music playback as it allows people to carry a lot of music on tiny devices.

Cell phone cameras are "good enough" for a lot of people, especially those who share photos on Flickr and Facebook.

Can mobile gaming be "good enough" even for a lot of core gamers? If core gamers get into these little quirky games during the day, will they still have as much need for core games after work?

 

[patsu]

True, but I was simply comparing the most successful AAA game on HD consoles VS the best AAA game on IOS.

Apples to apples so to speak.

I don't know if Infinite Blade is the best AAA game on iOS. It may be best technically, but for most iOS/Andrioid owners, they may play Angry Birds, Plants vs Zombie more. And if these people spend too much time playing these games, they will have less time for other activities. Developers will also invest resources to learn and tackle the new, fast growing market. In those aspects, existing platform holders may see the iOS/Android market as an unwanted "distraction". But truth to be told, you can also see them as additional opportunities.

Comparing COD with Infinite Blade is fine and all, but it won't present the right opportunities. Plants vs Zombie HD is already more expensive than Infinite Blade on iOS. And it is very popular (Broke previous sales record, #1 hit for PopCap, yada yada). Even on home consoles, different genre may appeal to different Xbox 360, PS3 and Wii crowds.

That's probably because it costs $6. And your family's quality gaming needs are being met by other devices. If they don't game on MS/Sony/Nintendo, they're probably just using the cheap/free games on IOS as time-killers in downtime.

No, we play Plants vs Zombie HD instead. I joined in because my wife and son challenged me. It's more expensive than Infinite Blade but who cares ? Only the top PS3 games can compete with the amount of time we spent on Plants vs Zombies. ^_^

As I said, IOS has tons of users and tons of games and tons of users who download games, but that doesn't make it a gaming platform.

Just like Windows has billions of copies of solitaire shipped worldwide since the early 90's, but I don't think anyone would confuse every PC sale as a gaming box.

Same goes for Facebook. Is Facebook also the death of consoles? Zynga the new EA?

Different markets.

Apple will have to do a lot of work to actually convince people to buy a device for the purpose of gaming.

They don't have to. People buy iPad for a number of reasons but gaming is the #1 use for iPad. I remember seeing a few studies but this is one of them:
http://www.mobilemarketingwatch.com...il-top-uses-for-ipad-not-entertainment-14441/

Facebook gaming is fine too, and yes it does take away people's time. Will it kill home consoles today ? Not really. Will all these new trends kill home consoles ? Unlikely, not because iOS is not a threat (or opportunity), but because the home console vendors will evolve.

Some here have mentioned the concept of Apple using something else as a method to lure in buyers to get the ibox into the livingroom, but much like Nintendo's effort to repeat the magic of Wii in Wiiu, I'm not seeing it.

There are plenty of other boxes and devices which do the media stream to the TV deal. There's Google and AppleTV also. None of them compare to consoles when it comes to moving units into livingrooms.

Perhaps Apple will defy all logic and not have AppleTV3.0 type failure, but I'll believe it when I see it.

Apple will need to compete toe to toe with consoles to succeed in getting ibox to the livingroom in any meaningful way.

iPhone/iPad's halo effect already brought more Macs into enterprises and homes. They also raised the sales of AppleTV. It's not a question of whether iOS can convince people to buy more Apple products in the living room or elsewhere. It's a matter of when, what and how many units -- as long as the product itself makes sense.

EDIT: I think the concept of core gaming will shift too because I see more and more kids playing iOS/Android games. Plus I finally conceded to my wife in Plants vs Zombie after countless challenges. I couldn't and don't have time to beat her record. She played it all day long (plus other games).

 

[patsu]

ah yes all those people lining up to pay $60 to play madden online with a touch interface.

Actually, sports games is one of the genra I think will benefit from motion or touch gaming. I don't play a lot of sports games today, but I can see myself buying FIFA because of Vita's touch UI.

As for $60, I think it's a matter of packaging. If someone offers some sort of combo sports premium video + gaming package, I can see consumers going after these high end packages (even more than $60).