Apple is actually winning gaming
The Future. Turns out, Apple is the biggest player in the gaming industry. Thanks to fees that the company collects from the App Store, Apple’s services division is continuing to grow and becoming increasingly important to the tech giant. With so much gaming revenue stemming from relatively few players, the company may start to retrofit its hardware to cater to them.
No console, no problem
What if we told you that Apple makes more from games than Microsoft, Nintendo, Activision, and Sony combined? That’s what WSJ found when looking at Apple’s financials from 2019.
- According to Sensor Tower, Apple’s operating profits related to games in 2019 was $8.5 billion — about 69% of overall App Store revenue.
- The tech giant hit those numbers on an operating margin (money made after costs) of around 75%.
- How does Apple make this money? It takes 30% of in-app sales on the App Store.
- The biggest revenue-driver titles include Tencent’s Honor of Kings, Nvidia’s Pokémon Go, and King’s Candy Crush Saga.
Most surprisingly, Apple makes most of its gaming revenue off of a small percentage of players. In 2017, only 6% of gamers accounted for 88% of all in-app purchases — spending roughly $750 per year.
Apple’s gaming dominance has surely increased since 2019, but the company is starting to contend with several factors that could see its growth plateau.
- Ongoing lawsuits and anti-Apple PR campaigns from developers like Epic Games.
- Anti-trust action from the U.S., the EU, and South Korea.
- The rise of VR-gaming in which Apple has yet to make inroads, falling behind Facebook, Microsoft, and Sony.
- Gaming-time crackdown in China, where Honor of Kings is immensely popular and where a third of gaming-related App Store revenue comes from.
Nonetheless, the mobile gaming market is only trending upward. Technology consulting firm Activate Inc. predicts that mobile games will generate $103 billion in revenue in 2024. Apple wants as big of a piece of that pie as it can get.