Would You Buy An Apple-Based Console?

Does the console market need any more competitors? We’ve seen record sales in the game industry for titles like Halo 3 and Grand Theft Auto IV along with huge expectations for Resistance 2 and some new Sony PlayStation 3 projects. Yet, the tiny little Wii product holds best sales records around the world as the heavy hitter, Microsoft and Sony, compete for the most awesome spectacle show of graphics.

Competition is a great way to drive down costs, drive up expectations and give consumers new innovative products with better quality. Imagine if Apple got into console development and produced a new highly sexy product with the hype and consumer desire of the iPhone or iPod.

“Apple has the infrastructure in place through iTunes to create a real value proposition for those that want to extend the capability of their console beyond gaming and has the cash — about $20 billion — to not only invest in the best components on the market, but in an online gaming experience that could rival Xbox Live.” (kotaku)

Apple’s showing a huge surge in recognition and sales thanks to the iPod and growing desire for Apple hardware competing against Microsoft’s Vista operating system. As more consumers turn to Apple for their music and mobile gaming needs, Apple must see windows of exploiting the gaming market further.

More importantly, nobody can pull off digital rights management (DRM) and locking consumers into a product line like Apple all while they beg for more. Consoles are little boxes of DRM waiting for happy consumers to buy into the concept all while avoiding the hacking and bittorrenting like you’ve been seeing on Spore in the last few weeks. Had Spore been released on a console this DRM fiasco would have been avoided because gamers don’t even realize (or care) that a console locks them into playing and, more importantly, buying the game for the hardware.

Apple knows the in’s and the out’s to producing software to work with their hardware as a primary means of making fast money. While Microsoft has built the jack-of-all operating systems and struggles to make every printer, modem and mouse work perfectly with their platform, Apple only has to support a small handful of accessories for their sleek little desktop and laptop boxes (complete with OS).

Realistically, Apple could produce a game console with very little change to how they do business; a large investment, for sure, but the company has already been wiggling their way into mobile gaming on the iPod and iPhone product lines. What’s another step into greatness than jumping into a growing industry and out playing and out selling your competitors?

Apple would have to invest cash into the hardware and, most importantly, into buying game companies to produce high quality game titles like Microsoft Game Studios has done, Sony has done and Nintendo has mastered. A console produced by Apple wouldn’t have to be the best in the industry (we all know Wii has several shortcomings), they just have to build the hype and consumer loyalty as they have done with their current mobile products.

Apple’s iPod isn’t the best audio player on the market, iTunes isn’t the most robust form of music distribution and sales but both have tied together nicely and have market share in an industry with many players (including Microsoft).

Would Apple be able to pull off a console system? Although nobody is saying they will, there are always possibilities in the future.

0 thoughts on “Would You Buy An Apple-Based Console?”

  1. It would seem like Apple would be a natural choice, since they’re very familiar with the whole standardized hardware and proprietary titles scenario. But at the same time that could be their very detriment, because there is that “Mac Curtain”, dividing the devout Apple devotees from the naysayers, with very little ambivalence in between. (In some circles, PC/Mac is a more heated argument than topics religious, political, or sports-oriented.) Of course, this also means they have an instant loyalty factor, in that they’ve already proven themselves to a portion of the population. The question is, is it the same portion that wants to buy a video game console? I don’t know. Anyway, I probably wouldn’t buy it, but I’ve just barely got my foot in the console waters (with my Wii, which I bought not due to any Nintendo loyalty, but because I liked the implementation and design. Plus it’s fun to say “I Gotta Wii!”)

  2. Sure, what the hell.. they might be the first to get the control ergonomics right. I would be particularly interested if they loaded the thing with memory and let your games reside in itunes or something like it, so you could d/l the 5 or 6 games you felt like playing that week, then carry the whole mess in a pocket without loads of damned game cartridges and suchlike.. They just need to bring in outside developers who can develop beyond the limits of things like Dark Castle..

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This week’s news includes:

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Wallets Shrink, Used Game Market GrowsWallets Shrink, Used Game Market Grows

Over the last year we’ve seen developers scrambling to find “value add” features to new game purchases. Their goal is to convince the customer to buy new instead of used because developers don’t see a penny from a used game sale. While GameStop sees 48% profit margins from the used game market developers struggle to stay floating in the industry.

for-saleThis is not the fault of GameStop and their 48% profit margins because they’re only getting 7% to 20% profit margins (say analysts) on new game sales. As someone that’s run a game store online, if you’re getting 15%+ on a new game you’ve got some great hookups in the distribution channel or are buying in huge quantities.

Buying games in huge quantities to build profit margins can be a huge mistake in this industry. Gamers are fickle little creatures and they’re going to buy their top tier games for a few weeks and then sales will drop significantly. No retail chain wants to purchase a thousand copies of GTA IV (only as an example) and sell seven hundred over the first few week to be stuck holding onto a few hundred copies when the dust settles. Now you’ll have to put them on sale to get them out of the store because the hardcore gamer have already done their shopping and you’re not going to get any price protection if you’re not a major player in the industry.

Why take 7% profit margins when you can get 48% on a used game? The gamers don’t seem to mind because they’ll trade in a used copy of a sports title like Madden to save $5.00 on the latest franchise release. Gamers will buy Fable 2, beat it in a week and rush to the store to get the “most for their dollar” before the game gets stale and buy-back prices drop like a stone. Why not rent Fable 2 and save yourself $50.00? Of course, renting pisses off developers as well because they see no additional revenue.

While the economy struggles and consumers fight for their jobs, the entertainment side of life continues to grow. People would rather “cocoon” in their homes playing video games and watching movies on their brand new HD television because it takes them away from the low points of the economy if only for a few hours. History has shown us trends in entertainment during the down points of economies, it’s natural to want to get away for a bit.

But, consumers want to play these games on the cheap because their job may not be there tomorrow. Saving $5.00 knowing the store just took the title in for half the price doesn’t bother you; $5.00 in your pocket is better than in their pocket right? The fact that they just pocketed upward of 40% on the game doesn’t matter to you — it’s all about your bottom line!

While we’re bargain hunting during the recession developers are going to try and up sell you to a new copy of the game. If that means giving you special game items and features with a “one time code” upon purchase, it will be up to you to decide if it’s valuable. All the while GameStop will lock out the game industry from selling used games because 42% of their overall gross profit is from used game sales.

You, the consumer, benefits from a slightly cheaper game, bargain bin fire sales and additional game features if you do choose to buy new. The economic down turn is a great time to be a gamer, as long as you remain employed.

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Had WoW launched free of charge they would probably have significantly more users playing the game, but the ad revenue from the sheer amount of people would be nothing compared to a monthly charge for eight million subscribers.

Although only a small number of those subscribers are US based, they’re still raking in the cash compared to an ad-based model, even if they were to have triple the subscribers.

However, the Blizzard exec noted: “We didn’t want to charge a subscription, but as we researched market conditions, we realized that wouldn’t support us.”

It’s possible, perhaps, that Blizzard would have fallen under its own weight had they created a world where anyone could play for no charge. Imagine the server utilization, the volume of traffic and the support calls they would get for triple or quadrupal the player base with only ads paying the checks.

Granted, a free system would be excellent in theory, but in practice, making us pay is the only way to throttle our addictions. Sad, but true.

(Thanks, gamasutra)