Apple and Cloud Gaming

Apple may not seem like a traditional gaming company, but gaming is a core business. As recently as 2023, Apple generated the third-most gaming revenue of all public companies (Newzoo). This is almost entirely generated through the iOS App Store, as games account for 60-70% of all App Store revenue. In 2023, consumer spending for the App Store reached $89.3b, which means Apple generated between $53.5b and $62.5b from games (Business of Apps). This success has quietly translated to their dedicated game service: 10% of US consumers use Apple Arcade weekly (MiDIA).

An overview of their gaming tech stack today:

Hardware

• The chipset, Apple Silicon: The introduction of Apple Silicon, particularly the M3 family of chips, has significantly boosted the performance of Macs, making them more competitive with PCs. These chips support advanced gaming features like hardware-accelerated ray tracing and mesh shading, which were previously uncommon in Mac hardware (Inverse).
• A unified hardware platform: Apple Silicon has unified the hardware platform for iPhone, iPad, and Mac, simplifying the game development process and guaranteeing optimal performance on all Apple devices.

Software and Game Support

• Apple Arcade: Apple Arcade is a subscription service that offers a wide range of games across Apple devices. It has been central to Apple's gaming strategy, providing exclusive titles and a curated gaming experience. Apple Arcade was arguably Apple's most significant strategic move into gaming, and it hasn’t disappointed, even though it doesn’t get as many headlines. As mentioned, 10% of US consumers use Apple Arcade weekly. To put that into perspective, only 11% of people use Steam or Nintendo Switch Online, according to the figures shared (TweakTown).
• Porting AAA titles: Apple has been working on porting high-profile AAA games through the Game Porting Toolkit to Mac. Titles like Resident Evil Village and Death Stranding have been brought to the platform, although often with delays compared to their PC and console releases (Inverse).
• Developer relationships: Apple is actively courting developers to bring more games to its platform. This includes collaborating with developers like Capcom to ensure new games are available on Mac at or near their initial release dates (Digital Trends).

Apple’s Newest Endeavor: Game Streaming

Apple launched its newest endeavor in the gaming space, game streaming, to all iPhones and iPads on June 27th, 2024. Antstream Arcade is a third-party cloud-based gaming subscription service that provides access to over 1,300 retro video games. It will be the first cloud-based streaming app on iOS.

Earlier this year, Apple updated its guidelines to allow game streaming apps on the App Store worldwide, enabling a selection of games within a single app. Previously, services like Xbox Cloud Gaming and Nvidia GeForce NOW were only accessible on Apple devices via the web. Antstream Arcade is poised to become the first popular service to take advantage of this rule change (Macrumors). The service will cost $4.99 per month or $39.99 per year,  with limited-time launch pricing at $3.99 per month or $29.99 per year.

Antstream’s use of retro games is a smart strategic choice given the technological advantages these types of games provide to a streaming service:

• Lower hardware requirements: Retro games were designed for older hardware and typically have lower system requirements. Making them much easier to stream even on the least powerful devices.
• Lower bandwidth needs: Retro games require less data to be streamed due to simpler graphics and lower resolution.
• Simpler game design: They often have more straightforward mechanics and smaller game worlds, which are easier to manage and process for streaming.
• Latency: Many retro games rely less on real-time responses, making minor latency issues less noticeable.
• Emulation technology: Emulation technology is well-established and optimized.
• File size: retro games generally have much smaller file sizes, which makes it easy to load and cache.

Anstream’s choice to focus on the retro niche is also beneficial to gamers:

• Nostalgia: While Antstream isn’t going to have as many traditional classics as you’d imagine, there are 1,300 retro games. Twenty-eight are from the Atari 2600, five are from the Game Boy, two are from the original PlayStation, and 42 are from the Super Nintendo. This should benefit the ecosystem by bringing more users into it, as users want to play games they don’t traditionally have access to anymore.
  • Antstream is available on Xbox, Windows, Android, and Amazon devices.
• Licensed: Antstream features a library of legally licensed retro titles so players don’t need to worry about how they’re accessing games.

Overall, the main benefit of bringing Antstream to iPhones and iPads is that Apple will be able to test and optimize its streaming capabilities and potentially start building the tools that will allow developers to stream game content to end users. This would drastically reduce the need for heavy applications and storage requirements and also allow for developers to better optimize their apps for their users (less updates) in real-time.

Takeaway: Cloud gaming has been a talking point for the last few years and while we’ve seen some success, we’ve seen far more failure (eg. Stadia, Shadow). Mobile gaming is the medium that would benefit the most from game streaming due to the hardware limitations (relative to a PC or console) and the limited file sizes (Apple’s max file size is 4GB, AAA games are 100+ GBs). Retro games offer a unique opportunity for Apple to optimize its ecosystem in the short term to see if there is a future where Apple can lead the way for cloud gaming.

We expect that if this runs smoothly, Apple could lean more heavily into streaming more games and apps, which would limit Apple users' concerns about local memory. This could also remove the need for downloads/updates at the same scale as we need today and completely change how developers can access users and deliver content.