*By Alex Heath*
Apple is planning a subscription service for games, according to five people familiar with the matter.
The service would function like Netflix for games, allowing users who pay a subscription fee to access a bundled list of titles. Apple ($AAPL) began privately discussing a subscription service with game developers in the second half of 2018, said the people, all of whom requested anonymity to discuss unannounced plans.
It’s unclear how much the subscription will cost or what kind of games Apple will offer. The service is still in the early stages of development, and Apple could ultimately decide to abandon it.
The company has also discussed partnering with developers as a publisher, according to two people familiar with the talks, which could signal Apple’s ambition to assume distribution, marketing, and other related costs for select games.
An Apple spokesperson declined to comment for this story.
The move to create a gaming subscription service comes as Apple faces pressure to grow its services business while hardware sales plateau. The iPhone-maker is developing a slew of original shows for a video streaming service to rival Netflix, partnering with carriers to boost the subscriber base for Apple Music, and is also planning to release a news subscription service this year.
While it’s unclear what kinds of games would be included, a subscription service for App Store games could provide a boost to Apple’s recurring revenue at a time when iPhone sales are slowing and gaming and esports are booming. Mobile gaming is expected to become a $100 billion industry by 2021, according to the gaming and esports intelligence firm Newzoo.
“It’s a big enough market to move the needle for Apple,” Gene Munster, a longtime Apple analyst and investing partner at Loup Ventures, told Cheddar.
There are still many questions about how an Apple subscription service for games will work — both for game developers and players. In the early days of the iPhone, Apple popularized the selling of mobile games as one-time purchases. But now it’s working on a subscription service in an era dominated by free-to-play games like Fortnite that make money from optional, in-app purchases.
“The vast majority of revenue coming out of the App Store is games,” said Brandon Ross, an analyst at BTIG that covers the video game industry. “Subscription has proven to be a successful way of monetizing on mobile. It is completely unproven in games except for some minor success from Microsoft, Sony, and Electronic Arts.”
If Apple functioned like a publisher for games it sold through a subscription, it could entice developers to create exclusive games for the service by undercutting the fees they would normally pay to an outside firm for user acquisition, marketing, and other distribution-related costs. Apple currently takes a 30-percent cut of App Store purchases but lowers that fee to 15 percent after the first year of a subscription.
Services, which include paid offerings ranging from iCloud storage to Apple Music, are the company’s fastest-growing business segment. In 2017, CEO Tim Cook set a goal of doubling the services business to $50 billion by 2020. Services accounted for $39.75 billion in revenue for Apple’s 2018 fiscal year, which means the company is on track to exceed the goal.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
At the core of the ongoing government shutdown is a fight over the decision to end subsidies that let some 12 million Americans get health coverage.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
