Goldman writes, “I know, I know: EA being acquired by Apple is an oldie, but it’s still a goodie!”
“With Electronic Arts’ most recent disappointing earnings, and its stock much closer to its 52-week low than high, and a market cap of only $5.7 billion, now would be as good a time as any for Apple to make a move. Apple’s got the cash, EA is a far cheaper alternative than Activision, the tech industry overall seems to be in an acquisitive mood, and even Apple has opened up its checkbook recently for some key, though relatively small, deals,” Goldman writes. “The payoff could be handsome.”
Full article here.
Deus Ex Technica,
The idea of turning the Apple TV into a game console poses a couple of problems:
1. The Apple TV itself does not sell that well, which is of course not Apple’s fault, but just how the market is what with all those free terminals given away by the cable companies and the upiquity of DVDs.
To straddle something else on Apple TV might be throwing good money after bad money. After all, if you take away the apps, an iPhone is still a good phone and web browser, an iPod is still a good music player. The Apple TV would be nothing to most consumers.
The Apple TV was planned as the iPod for your TV, back when iPods where the coolest gadgets in the world. That failed. If they’d now try to turn it into the AppStore for your TV the results might be similarly disappointing.
2. The stationary console market has been deeply distorted by first Microsoft and then Sony. Combined, they lost more than $5 billion on the current generation of consoles, just to stay in the game. I’m citing net losses here, not up-front investments. Xbox lost $3 billion in 2007 alone.
I have no doubt that Microsoft would be ready to pour billion after billion after billion into their XBox to keep it ahead of Apple TV (In that case, Sony would probably go bust). Apple cannot make profits in such an environment.
3. Working for the big screen is harder. We have already heard that from iPad developers. Apple absolutely could not dream to compete by publishing zero budget and low budget indie games. They would need serious cooperation with the big games publishers.
4. Input. An integral part of the iDevices’ success is the direct touch input. However you may want to use that new Apple TV—with a Wii-like remote or by using an iPod Touch—it is not direct input, but another way of indirect input, thereby limiting its universal appeal. To paraphrase Steve “If you see another WiiMote clone they blew it”.
As for what Apple is really going to do, I’m sure they’ll err on the safe side in terms of adding new features and they’ll err on the wild side in terms of creating entirely new markets. In the end we’ll have to wait and see.
PS:
And one other problem would still remain: Teaching customers that $10 games can be awesome and worthwile.
@Tom
Answers inline:
1. The Apple TV itself does not sell that well, which is of course not Apple’s fault, but just how the market is what with all those free terminals given away by the cable companies and the upiquity of DVDs.
I was not talking about the current iteration of AppleTV. I was talking about a possible future iteration with developer access a la iPhone/iPad. Past performance is not a guarantee of future results.
To straddle something else on Apple TV might be throwing good money after bad money. After all, if you take away the apps, an iPhone is still a good phone and web browser, an iPod is still a good music player. The Apple TV would be nothing to most consumers.
I don’t follow your “If you take away the apps” logic. But the iTunes Music store has thousands of TV and movie titles that are available for rent or purchase and which can play on your large-screen television using AppleTV. It does that better and cheaper than any other device offered by Apple.
The Apple TV was planned as the iPod for your TV, back when iPods where the coolest gadgets in the world. That failed. If they’d now try to turn it into the AppStore for your TV the results might be similarly disappointing.
Your definition of failure is unclear. I also doubt you are actually within the small circle of people who really know what the AppleTV was planned for. What we do know is that Apple has used the platform to negotiate valuable content agreements with all of the major studios and as a demonstration of how DRM could work for that sort of content in the marketplace. How they will use those agreements and technology in the future remains to be seen.
Remember, Apple has made very clear that the AppleTV is a work in progress – a “hobby’ as they put it. They know there will be an opportunity for it in some iteration, and they are developing what they can and selling it for what it can do today. When a marketplace opens (or when Apple sees an opportunity to define one of their own) for AppleTV, you can bet the technology they have developed so far will be repurposed for that market. In the meantime, they are selling it for what it can do – and enough people are buying it for that purpose. Doesn’t sound like failure to me.
2. The stationary console market has been deeply distorted by first Microsoft and then Sony. Combined, they lost more than $5 billion on the current generation of consoles, just to stay in the game. I’m citing net losses here, not up-front investments. Xbox lost $3 billion in 2007 alone.
You could say the same thing about the smart phone market, the MP3 market, and the tablet PC market before Apple came along. History has proven that Microsoft’s and Sony’s past performance are not a guarantee of Apple’s future results.
I have no doubt that Microsoft would be ready to pour billion after billion after billion into their XBox to keep it ahead of Apple TV (In that case, Sony would probably go bust). Apple cannot make profits in such an environment.
There is just no precendent for your position. Apple has proven that they can be very profitable when 1) they are not the biggest in a market, and 2) when they are not the first in a market.
3. Working for the big screen is harder. We have already heard that from iPad developers. Apple absolutely could not dream to compete by publishing zero budget and low budget indie games. They would need serious cooperation with the big games publishers
The developers you are speaking of are in the process of making the iPad a paradigm-shifting computing device USING THE SAME SKILLS, TECHNIQUES, AND TOOLS that they used to make the iPhone an unprecedented success. You actually think that these folks wouldn’t flock to an AppleTV SDK if Apple made it available? Why wouldn’t they? Most developers would kill for that kind of screen real-estate to work with, ESPECIALLY GAME DEVELOPERS!
4. Input. An integral part of the iDevices’ success is the direct touch input. However you may want to use that new Apple TV—with a Wii-like remote or by using an iPod Touch—it is not direct input, but another way of indirect input, thereby limiting its universal appeal. To paraphrase Steve “If you see another WiiMote clone they blew it”.
You haven’t made your point clear – why would a wireless Wii controller be more “direct” than an iPhone linked wirelessly to an AppleTV? And what does that have to do with the “universal appeal” of anything?
As for what Apple is really going to do, I’m sure they’ll err on the safe side in terms of adding new features and they’ll err on the wild side in terms of creating entirely new markets. In the end we’ll have to wait and see.
“In the end, we’ll have to wait and see”. That is the only statement of yours that I categorically agree with!
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@Tom
Teaching customers that $10 games can be awesome and worthwile.
Have you been to the App Store ever?
Waste of money!! Use the money to design two apps to replace Indesign, and Photoshop or add design from the ground up a strong cad program to the mac platform. Do not buy a company! use the money in house to make what you need.
I think Apple should buy Adobe before EA. I don’t see why Apple would be interested in making and promoting games for Windows.