Apple to spend over $500 million on its Arcade gaming service

FT report indicates that Apple will bet big on Arcade, with the games subscription service rolling out from October this year

Apple's Arcade gaming subscription service, announced last month, could cost the company more than $500 million.

That's according to a report in the Financial Times, which claims that the iPhone maker is currently spending huge money to obtain over 100 games that will become part of Arcade gaming service.

The company is expected to roll out gaming subscription service around October this year.

While announcing the Arcade gaming service last month, Apple revealed that it will be integrated into the App Store and won't feature any advertisements or additional purchases. Moreover, it will be available on iPhone, iPad, Mac, and Apple TV.

The company also announced some titles for the service, including Beneath a Steel Sky, 1994 adeventure game that went freeware in 2003; Sonic the Hedgehog; games from Giant Squid, Cartoon Network, Snowman, Konami, Lego; and, several games from independent developers, such as Boosa Studios Ltd, Annapurna Interactive and ustwo.

But sources told the FT that many high-profile games selected by Apple have budgets in the millions, and their developers are unlikely to let them go for pennies a month.

Apple is also reportedly offering extra incentives for game developers to grant Apple temporary exclusive rights to their games. That means developers will have to hold back from releasing their games on Google's Play Store or other gaming services.

But, games would be exclusive to Apple Arcade for just a few months, and then developers would be able to release them on PCs or games consoles.

According to analysts at HSBC, Apple Arcade subscription could bring in more revenue for the company than Apple TV+ streaming video service. They estimate that Apple could earn revenues of around $370 million from the Arcade service in 2020, increasing to $4.5 billion by 2024.

In comparison, revenues from Apple TV+ in 2024 will be around $4.1 billion, according to analysts.

The AI and Machine Learning Awards are coming! In July this year, Computing will be recognising the best work in AI and machine learning across the UK. Do you have research or a project that you think deserves wider recognition? Enter the awards today - entry is free.