Apple is one of the world’s largest video game companies, making more from games than Nintendo, Sony, Microsoft, and Activision combined.
Apple raked in more profits from games than Xbox maker Microsoft Corp., gaming giants Nintendo Co. and Activision Blizzard Inc., and PlayStation maker Sony Corp. —combined — in its fiscal year 2019, according to a Wall Street Journal analysis of figures released as part of the company’s recent antitrust trial.
Apple’s operating profits from games that year totaled $8.5 billion, according to the Journal analysis, exceeding the other four companies’ combined gaming operating incomes in the same period. The tech giant said operating margins discussed during the trial were flawed and as a result are too high.
The risk for Apple is that its role as the gatekeeper between the gaming world and its more than 1 billion iPhone users as well as the fee it collects as the middleman could be disrupted—whether by legislation, court order or regulatory action… Another threat to Apple’s profit engine comes from China. New rules in that country aim to decrease the number of hours young people can play games.
Globally, customers spent a total of $45 billion on mobile games through the App Store in fiscal 2020, according to Sensor Tower. Almost 31% of that money was spent in China while 26% was in the U.S.; Apple’s cut came out to an estimated $13.5 billion or about 5% of Apple’s overall sales that year of $275 billion…
Apple is appealing to a rather small group. Just 6% of App Store game customers in 2017 accounted for 88% of all the store’s game billings for the year, according to court records. On average they spent more than $750 annually. The biggest spenders, who made up 1% of Apple gamers, generated 64% of billings and spent on average $2,694 annually.
MacDailyNews Take: Apple built the iPhone and the App Store which, combined, are the biggest boon to software developers that the world has ever seen. Yes, the company derives profits from its world-beating innovations, as it deserves to do.
In a clear sign of Apple’s superior customer demographics, consumers spent about 1.8 times as much on Apple’s App Store vs. Google Play even though Apple’s iOS has a global market share of 26.75%. vs. Android’s 72.44%. Hee Haw!
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