Exactly. Is there really speculation that Apple is going to abandon their extremely profitable "Build the same product that's been available previously but make it look prettier, have a nice interface, be fully integrated with existing Apple devices, and sell it for 50-100% more than competitors" model when launching into the console space?
In order for Apple to even consider such a thing, they would have to have some pretty firm numbers on how profitable PSN or Live! and believe that integrated the Apple Store into the living room will make up for their normally huge hardware profit margins.
Exactly. Is there really speculation that Apple is going to abandon their extremely profitable "Build the same product that's been available previously but make it look prettier, have a nice interface, be fully integrated with existing Apple devices, and sell it for 50-100% more than competitors" model when launching into the console space?
No offense but youre talking out your ass, yes that used to be true years ago WRT hardware pricing. Today though they're priced very similar to their competitors. see Ipad, Iphone, Ipod.
The chief reason I could see for apple to do this is (create a console/tv/multimedia device). Apple app store, selling ppl apps/content from the comfort of their living rooms.
If I was Sony/Nintendo/MS I'ld be very worried indeed
The chief reason I could see for apple to do this is (create a console/tv/multimedia device). Apple app store, selling ppl apps/content from the comfort of their living rooms.
If I was Sony/Nintendo/MS I'ld be very worried indeed
I've been saying something similar for quite some time now, and I expect long term for Sony and Nintendo to get pushed out of the console space. I think Microsoft will be fine though because they have the desktop/laptop/tablet/phone/console products already, and they can use Windows dominance to push people where they want, as well as other properties like Skype. Plus they aready have working cloud services, even Apple's iCloud run's on Microsoft's Azure. So Microsoft has all the pieces, something that can't be said for Sony and Nintendo. The only thing in my mind that was stopping Apple from making a play in the console space was Steve Jobs who always seemed reluctant to do so, but now with different leadership at Apple it's become a very real and/or almost inevitable proposition. Now I'm just waiting to see what Google will do.
That quote from Gabe Newell makes me wondering if Apple will be partnering with Valve for this. Steam on PC is already very similar to the console experience. And Valve have been pushing for Mac versions of games in Steam.
Like the X360 it includes system wide voice, friends list, automatic updating of games, etc. Apple can handle the social networking aspect as well as media. It also starts to put into perspective why Valve in the past ~6 months or so has greatly increased their push to have software released that can be used on the PC and Mac.
Basically take Steam + Apple's media services and you have a ready made console with virtually everything the X360 has to offer. Well, except less core games.
Apple never sells a hardware product for low margins. If it doesn't have a large margin, they don't sell it. Hence, it's quite likely the hardware will either be expensive or underpowered compared to the competition. And considering they don't like underpowered (no Atom or Arm based OSX computing platform), it's more likely to be more expensive than it is to be underpowered.
I have a feeling whatever they release is only going to be as popular as the Apple TV was. Hence, absolutely no competition for MS or Sony.
Everyone who expects Apple to release a loss leader, raise your hand. Sony and MS have a tradition of selling launch hardware at a loss to compel adoption and reap rewards on software (with hardware becoming profitable later in the cycle), if Apple wants to get into the industry, they may well need to do something similar, or be limited to competing with Nintendo with somewhat weaker hardware. I don't see apple launching a loss leader, I don't think it's in their DNA.
Everyone who expects Apple to release a loss leader, raise your hand. Sony and MS have a tradition of selling launch hardware at a loss to compel adoption and reap rewards on software (with hardware becoming profitable later in the cycle), if Apple wants to get into the industry, they may well need to do something similar, or be limited to competing with Nintendo with somewhat weaker hardware. I don't see apple launching a loss leader, I don't think it's in their DNA.
I agree, because I don't see how pricing a loss leader could fit into their current pricing setup for the Mac Mini, Apple TV and iPad/iPhone business, BUT maybe they wouldn't feel the need to be #1, like in the PC space, and would be happy to be a profitable 3rd.
I don't see a partnership with Valve. Apple will most definitely want to control content delivery, which is Steam's business. Maybe they could use Steam as the framework for chat, messaging, friends etc, but I don't see what interest Valve would have in doing that if they didn't also profit from digital sales, and Apple should be very capable in delivering online features. I've always thought Sony should partner with Valve, because Sony has not been strong on the software services side.
The only reason the the high margin Wii worked was it had a novel and innovative interface. Without it, it would have failed about as badly as AppleTV did.
The razor blade model is the model which is used in this market.
It's how they fit top notch hardware into affordable boxes.
Straying from this model would result in prohibitively high MSRP, or prohibitively low Spec.
Apple can either evaluate the market they are intending to compete in and understand the dynamics at play, or they can spend money investing in yet another failed Apple attempt at the living-room.
I think Apple is too smart to go into this with such strong competition already in place without giving the console all it needs to succeed. Hardware, and price-wise.
Probably just Apple trying to keep pace with Roku which already lets you buy games like Angry Birds. Opening up AppleTV for app development is long overdue. An AppleTV hardware refresh with a Roku-style, gaming friendly remote and a spec bump to the iPad 3 SoC sounds about right. Will be pretty funny if games is what Steve Jobs meant when is said he had "cracked" the TV problem. The chance they are planning to go for hard core gamers is effectively zero.
Question:
How many people buy an idevice strictly for gaming?
How many buy it mostly for gaming?
I'm willing to bet that percentage is rather low. Even though games are the most downloaded apps, they are there mostly as a time-filler between work, meetings, or in other downtime.
If the intent is to move units into the livingroom, angrybirds isn't it. And as we see from AppleTV sales, AppleTV isn't it either.
What is moving hardware into the living-room? Games. Not Angry Birds, real, console, games.
We see from recent Wii sales falling that gamers are done with this lower end experience which is still superior to most "games" software available on idevices.
If Apple is serious about being successful in the livingroom, there is one proven market that is rather healthy, and that is the "hardcore gamers" market.
In order to get a piece of that pie, they need a big boy system. Especially on the eve of nextgen hardware from Sony/MS.
If we look at the Mac Mini as an example starting price is $500. A comparable PC would be what $300? I could see them release a console for $500 with bi-annual refreshes...
I doubt MS or SONY is brave enough to release new hardware every 2 years....that could be Apple's advantage. At launch the hardware may be equal or inferior but every 2 years it gets more powerful...
If we look at the Mac Mini as an example starting price is $500. A comparable PC would be what $300? I could see them release a console for $500 with bi-annual refreshes...
I doubt MS or SONY is brave enough to release new hardware every 2 years....that could be Apple's advantage. At launch the hardware may be equal or inferior but every 2 years it gets more powerful...
Interesting angle, but if that is their play, I'd say they'd have better luck keeping the price at $300. $400 max.
But to get people interested and excited enough to buy, it would have to either present a hardware advantage to match the higher price, or go low price ($300) and hope to be close enough to sway apple fans that also wouldn't mind having the extra cross platform functionality with other idevices.
As to the idea of MS/Sony not following a Bi-Annual uptick ... Don't forget MS' comments on Forward Compatibility ...
The only reason the the high margin Wii worked was it had a novel and innovative interface. Without it, it would have failed about as badly as AppleTV did.
The razor blade model is the model which is used in this market.
It's how they fit top notch hardware into affordable boxes.
Straying from this model would result in prohibitively high MSRP, or prohibitively low Spec.
Apple can either evaluate the market they are intending to compete in and understand the dynamics at play, or they can spend money investing in yet another failed Apple attempt at the living-room.
I think Apple is too smart to go into this with such strong competition already in place without giving the console all it needs to succeed. Hardware, and price-wise.
I'm not sure I agree with this. I think Microsoft and Sony will both probably go for consoles that turn a profit quicker in the life cycle, and both Sony and Microsoft are out there to win the market. Apple tends to go the route of making a good product that's profitable, and not worrying about market percentages as long as they have growth. Apple is a VERY strong brand, with a near fanatical following. If they decided to push a console the way they pushed the iPhone, there are millions of easy sales waiting for them. I can imagine the huge amount of press they'd get if they decided to launch a game console. It would probably be front page news from every single tech publisher, and probably a lot of news organizations as well.
I'm not sure I agree with this. I think Microsoft and Sony will both probably go for consoles that turn a profit quicker in the life cycle, and both Sony and Microsoft are out there to win the market. Apple tends to go the route of making a good product that's profitable, and not worrying about market percentages as long as they have growth. Apple is a VERY strong brand, with a near fanatical following. If they decided to push a console the way they pushed the iPhone, there are millions of easy sales waiting for them. I can imagine the huge amount of press they'd get if they decided to launch a game console. It would probably be front page news from every single tech publisher, and probably a lot of news organizations as well.
1) MS/Sony Profitability
I agree that Both Sony and MS will have an eye on profitability sooner rather than later. Ways to go about this:
-Make sure the console is reliable. RROD cost MS $1B
-Make sure it isn't reliant on a new cutting edge and expensive optical media ...
-Make sure the board layout and chips are as streamlined and efficient as possible.
Nothing about the rest of the launch of PS3 nor xb360 would have to change for xb720 and ps4 to be profitable sooner... but other methods could be used:
Higher initial MSRP
xb360 core was $300. The existing xb360 MSRP is $300 with Kinect, or $300 with HDD. MS would look like they were giving away the new xb720 if it launched later this year for $400 for the core model as the price relative to existing "ancient" xb360 hardware is so close.
Sony could also enjoy the relative cheapness of launching near $400 with a "core" model.
XBL Style Yearly Fees
Currently Sony isn't charging for online, but Live is bringing in an ever increasing money pile to MS. Significantly more now than when xb360 launched. Funds from this service (or ones like it) could be used to offset the costs of initial BOM losses.
Ad Revenue Deals
MS and Sony could get serious about the advertising space which these consoles are reaching and market them to the appropriate advertising and marketing agencies for the potential they deserve. The revenue generated from such huge userbases could more than offset losses, or they could flip it the other end and offer significantly discounted games and/or services.
None of the above would require cutting back on the actual hardware in the box or on the die.
2) Apple Brand Power
Yes, Apple does have a strong brand. However, this did almost nothing for them in the appleTV venture.
Why?
If you ask me, it's due to the fact that AppleTV didn't take advantage of what makes Apple the strong brand that it is today.
User interface.
The touch experience of iproducts is nowhere to be found. And it isn't a "cool gadget" that apple fanatics can walk around with. Take those away, and it's a far less "magical" experience. What can they do to replicate this in the Home? Kinect would seem to be the closest user experience in a livingroom environment to the slick touchsreen interfaces of the iworld, but MS seemed to do a pretty good job in protecting Kinect with Patents.
Even if Apple can somehow get around Kinect Patents without winding up in court, they then still are only matching an existing (and successful) product on the market.
They would still need to compete on Price, Performance, and Exclusive software (games).
A few words about what Apple need on a hardware pov and as well as price.
Apple sell this for 99$ (more detailed specs here). I don't think they lose money on that, but I don't think either that they make big money out of it either (especially once you take retailers margins).
Overall I would say that Apple sells this thing at more than a fair price, honestly for what it does and what is in it and compare to say a Wii the deal is fair. The product is not successful that's another matter. Lets be fair before jumping on the gun "underpowered, overpriced, etc."
Clearly Apple doesn't seem to want to lose money and that's imho perfectly fine but it looks like Apple is ready to make some dent to their usually comfortable margins if they have a bigger plan. In regard to Apple Tv one could also say it was a cheap attempt.
So say Patcher is not dreaming and Apple tries again using games as a leverage on top of the whole iOS package. It would be fair to assume that they are not the kind to bet the house on this and that they would plan to be in grey if the thing bombs. Say Apple sells the product close its BOM price+retailers margins. What would be the price? @200$ using 28nm I think they can produce something really decent based on embedded products ( SoC Cortex A15 cpu cores + PowerVR rogue GPU+cheap cooling +some flash+2.5" HDD). They could launch something better if they launch at higher price 250$ or 299$ but 199$ sounds nice overall with the iOS the whole package would be tough to beat in "what it does for the price"
That would be way better than what the Wii provide in its time, actually it would have nothing to do with a Wii. Assuming in face of the Wii success that such hardware would not be enough is quiet a statement. If anything the thing could be successful no matter what the competitors hardware are. It's not about selling hardware per self, Apple should have no problem to get all the major third party editors on board,
for some reason I feel like they may even convince Blizzard
. They already have a huge iOS users base they are the ones they need to convince first to get their new product. They need neat interactions (both like the PS3 and PSV and the WiiU and its controller and more in regard to standard apps think multi accounts managements) between the different iOS devices as well as a neat forward thinking controller.
It could have a neat synergy for Apple as more consumers would be made aware of the potential of their phone /tablets as gaming device (along with growing library).
But that's only Apple as I see it Apple doing such a move would create a lot of intensive for the Android camps to follow suit as more and more games and apps are developed for both platforms. Ultimately and to go back to Newell statement I could see the whole Apple+Android matured gaming environment to be some sort of a new PC market. Games could be pretty much platform agnostic from the gamers pov ie one playing on an iOS device the other on Android devices. It would be then be more a matter of performances as in the smartphone/tablet market now it's a matter of consolidating this in everybody living room. It could be really fast, a bit like 'over melting' (that's when a material remains liquid below is solidification points) Apple enter a really volatile market and their bet seems iffy then other actors enters (most likely Android actors, but MS may want too) and the whole stuff all of sudden solidify letting outside those that were not there when it happened.
The reason why Apple TV didn't take off is that it's an incredibly limited device. Without hacking it, it's basically an iTunes player. It hardly seems worth it to people who own ANY computer, game console, iPhone or iPad. Add in console features akin to Xbox, Playstation, and it seems more attractive, but I still think they'd have to find ways to leverage some type of pairing with iPhone and iPad.
A few words about what Apple need on a hardware pov and as well as price.
Apple sell this for 99$ (more detailed specs here). I don't think they lose money on that, but I don't think either that they make big money out of it either (especially once you take retailers margins).
Overall I would say that Apple sells this thing at more than a fair price, honestly for what it does and what is in it and compare to say a Wii the deal is fair. The product is not successful that's another matter. Lets be fair before jumping on the gun "underpowered, overpriced, etc."
Clearly Apple doesn't seem to want to lose money and that's imho perfectly fine but it looks like Apple is ready to make some dent to their usually comfortable margins if they have a bigger plan. In regard to Apple Tv one could also say it was a cheap attempt.
So say Patcher is not dreaming and Apple tries again using games as a leverage on top of the whole iOS package. It would be fair to assume that they are not the kind to bet the house on this and that they would plan to be in grey if the thing bombs. Say Apple sells the product close its BOM price+retailers margins. What would be the price? @200$ using 28nm I think they can produce something really decent based on embedded products ( SoC Cortex A15 cpu cores + PowerVR rogue GPU+cheap cooling +some flash+2.5" HDD). They could launch something better if they launch at higher price 250$ or 299$ but 199$ sounds nice overall with the iOS the whole package would be tough to beat in "what it does for the price"
That would be way better than what the Wii provide in its time, actually it would have nothing to do with a Wii. Assuming in face of the Wii success that such hardware would not be enough is quiet a statement. If anything the thing could be successful no matter what the competitors hardware are. It's not about selling hardware per self, Apple should have no problem to get all the major third party editors on board,
for some reason I feel like they may even convince Blizzard
. They already have a huge iOS users base that the one they need to convince first to get their new product. They need neat interactions (both like the PS3 and PSV and the WiiU and its controller and more in regard to standard apps think multi accounts managements) between the different iOS devices as well as a neat forward thinking controller.
It could have a neat synergy for Apple as more consumers would be made aware of the potential of their phone /tablets as gaming device (along with growing library).
But that's only Apple as I see it Apple doing such a move would create a lot of intensive for the Android camps to follow suit as more and more games and apps are developed for both platforms. Ultimately and to go back to Newell statement I could see the whole Apple+Android matured gaming environment to be some sort of a new PC market. Games could be pretty much platform agnostic from the gamers pov ie one playing on an iOS device the other on Android devices. It would be then be more a matter of performances as in the smartphone/tablet market now it's a matter of consolidating this in everybody living room. It could be really fast, a bit like 'over melting' (that's when a material remains liquid below is solidification points) Apple enter a really volatile market and their bet seems iffy then other actors enters (most likely Android actors, but MS may want too) and the whole stuff all of sudden solidify letting outside those that were not there when it happened.
I agree that this is a plausible route that Apple may go. But the question is, what would be the end result of this business plan?
- $200-300 HW sold at or near BOM
- Does everything an iphone/ipad does (assuming they can rip the Kinect)
- Games which are cross compatible with other idevices.
This is basically describing a beefy Ipad without the screen.
If someone already has an ipad, why buy this?
If someone wants an Ipad, why choose this over the ipad?
If someone has a xb360/ps3 (xb720/ps4), why buy this?
I think the end result of an underpowered Ibox which has generalized portable gaming software compatible with other idevices, would be a commercial failure similar to AppleTV. Even if it get's ports of xb360/ps3 games. What incentive would there be to buy this box in addition to the one already in the home or to choose it instead of the one with a gaming library which dwarfs it?
I don't think Apple can afford to not compete on specs. Especially as a newcomer to the games market. If they go light, they will get similar sales results to AppleTV ... for the third time.
I'd like to think Apple is smarter than this, and will invest appropriately to have success in this market if they've deemed it a corporate goal. Judging from Pachter's words, it is indeed a corporate goal as the machine is in the works. Now it's just a matter of supporting it with enough resources inside and out to be successful.
Not to mention, they still need to come up with a solution to the interface problem.
The reason why Apple TV didn't take off is that it's an incredibly limited device. Without hacking it, it's basically an iTunes player. It hardly seems worth it to people who own ANY computer, game console, iPhone or iPad. Add in console features akin to Xbox, Playstation, and it seems more attractive, but I still think they'd have to find ways to leverage some type of pairing with iPhone and iPad.
I get that, but a lightweight ibox would be just as limited (if not more so) if it can't/won't support AAA games. If all it is is the cross gaming box so users can play angry birds on the big screen, I think it will fail horribly for much the same reasons you sight in AppleTV failure. Basically an ipad/phone that isn't portable, doesn't have touchsreen, and doesn't have the "cool gadget" novelty to show off in public.
The reason for the Box should be "This is the iBox with games that I can't play on my ipad/pod/phone, because those are portable, battery powered, weak machines ... and this is the big daddy on my glorious big screen".
This isn't to say that Apple couldn't/shouldn't use a similar interface to WiiU where the box does the work and can output the display to phone/pad/tv/pod/mac ... that would be rather cool. But a far different proposition than, "Hey it plays everything your pad does ... because its roughly the same guts! All future games on the ibox will be available for ALL iOS devices!" This would mean the lowest common denominator is pegged for development and no matter what is in the box, it won't compete with xb720 or ps4 and would barely compete with xb360/ps3.
I've seen some grumblings around certain parts of such a thing ... but this is the first time I've seen it mentioned as a real product which is definitely in production and an estimated release date...
Chef I don't think you really understand how Michael Pachter speaks. He makes the same kind of definitive pronouncements about all the things he expects based purely on current trends in the market and little else. He was saying a similar thing about the WiiHD coming out at the end of the year for years. He doesn't have any insider info about what Apple is planning, and he probably understands as much about Apple's business strategies as any of us on this forum.
Imho Apple has no need to make a dedicated gaming console. Their business is driven by multipupose convergent CE devices. There's no benefit to them entering the traditional console business, rather if they have any serious aspirations in gaming at all (which i doubt the do) they would simply put more emphasis on it with their existing devices, and grow their gaming business through those areas.
Apple won't make a games console. And unless you're a disciple of the church of St Jobs and Apple Almighty i don't understand why anyone would want an Apple console in the first place :-S
