Neil Hughes
Though the new Apple TV isn't expected to have a streaming subscription service available at launch, that's not a problem for investment firm J.P. Morgan, who believes the device's real selling point will be an App Store with traditional console-style videogames.
To analyst Rod Hall, the massive $34 billion console gaming market is where the "real opportunity" for a new Apple TV lies. He estimates that an anticipated set-top box with a dedicated App Store would give Apple a foothold in that market and contribute a meaningful amount to its bottom line.
Hall's self-described conservative estimates suggest that every 5 percent of the gaming market Apple can capture will add about 2 percent to the company's annual earnings per share.
Compare that to a streaming TV service, which he believes will not be greatly profitable due to terms with content owners. His estimates suggest that a $40-per-month subscription plan would add just 1.4 percent to Apple's calendar year 2016 earnings per share.
The projections were detailed in a note to investors issued on Monday, a copy of which was provided to AppleInsider.
The real key for Apple's anticipated entrance into the console gaming market is the A8 chip, which features PowerVR graphics that are estimated to be about on par with a Sony PlayStation 3. The power could be even greater if Apple decides to go with an anticipated "A9" processor, Hall noted.
The analyst also said that Bluetooth input should allow a new Apple TV to connect with gaming controllers that are already available for iOS. With titles available for download on the App Store, users would be able to game comfortably from their couch on their HDTV, competing with the likes of Microsoft's Xbox One.
J.P. Morgan has maintained its "overweight" rating for shares of AAPL with a price target of $145.
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93 Comments
From a revenue and profit standpoint, I truly wish Apple would make a more aggressive move into gaming hardware (And POS terminal hardware), instead of such barely-moving-the-needle initiatives like like Apple Music.
Bit of a weird graph as I never played a game that looked better on the X360 than the PS3.
Also, I'm not convinced that casual gaming in the living room is that much of an opportunity. Maybe the odd party game, but the existing consoles are so far ahead of where the Ax processors are, as well as being entrenched and with the mature development community. Just don't see Apple's angle there.
Not slamming the ?tv, as I like the ?tv a lot.
Streaming devices are blowing up. I don't know of anyone under 35 that doesn't stream all of their "TV" media content to a chromecast or amazon fire device. There is a breaking of the dam moment in the wings. Add gaming and iOS apps an this thing may just e the device that busts the dams of old fashioned television content forever.
This is a know brainer.
I see what you did there. Well played.
Streaming devices are blowing up. I don't know of anyone under 35 that doesn't stream all of their "TV" media content to a chromecast or amazon fire device. There is a breaking of the dam moment in the wings. Add gaming and iOS apps an this thing may just e the device that busts the dams of old fashioned television content forever.
Concur. Considering how long it is taking for this AppleTV update to make its appearance, I'm anxious to see how Insanely Great it is. It might be the "I've cracked it" device Steve suggested.
Just hope it doesn't turn out to be the long wait like the Apple Watch was, although the lack of leaked photos of production or prototype hardware makes me thing is will be. :-(
Nintendo has the best(only) ideas is gaming(Everything else is a knockoff with ZERO originality). Nintendo just sucks at marketing and implementation. They created this social TV platform that was genius, but never promoted it or updated it. Apple could really use them but I heard they don't sell their company to anyone. [quote name="sog35" url="/t/187750/entry-into-34b-console-gaming-market-seen-as-largest-opportunity-for-new-apple-tv#post_2762281"] People said the same thing about gaming on an iPhone. No way it could compete with gameboy. guess they were wrong. Only the hardcore gamers care about cutting edge graphics. [/quote] iPhone's closest competitor was the Nintendo DS which had a touchscreen and app store before Apple. Nintendo just never evolved from there and DS owners moved to iPhone. Outside of their game developers and engineers, Nintendo is beyond stupid.