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With software sales for traditional game consoles and PCs projected to reach $35 billion this year, one analyst believes a new Apple TV with a dedicated App Store could have a noticeable impact on the company's bottom line.
Rod Hall of J.P. Morgan is bullish on the prospect of a new Apple TV model rumored to debut at Apple's annual Worldwide Developers Conference in June. In a research note to investors issued Monday, a copy of which was provided to AppleInsider, he noted the combined console and PC gaming market is expected to sell $35 billion worth of software this year.
For every 10 percent of share in this market that Apple could tap into, Hall believes it would add about 1.5 percent in additional earnings for Apple.
If it uses the same A8X chip as the iPad Air 2, a new Apple TV could be as powerful as a PlayStation 3 console, Rod Hall believes.
The analyst noted that the A8X chip found in the iPad Air 2 is capable of near PlayStation 3 quality graphics. If Apple were to use that processor to power a next-generation Apple TV, the company could make a formidable splash and compete with the likes of Sony, Microsoft and Nintendo in the longstanding console market.
Beyond games, Hall also believes that a new over-the-top subscription TV bundle would be yet another revenue and profit opportunity for Apple.
Word first surfaced last week that Apple is expected to unveil a new Apple TV, complete with App Store and Siri support, at WWDC. It was said that the device will use the same A8 chip series found in the iPhone 6 and iPhone 6 Plus, but it was not indicated whether it would be the upgraded "X" chip variant found in the iPad Air 2.
On its own, the A8 processor is powerful enough to output 4K-resolution video, which means it could be capable of supporting ultra-high-definition content. Service like YouTube and Netflix already offer some content in 4K resolution, while a number of 4K-capable TVs are on the market.
Much of the groundwork for a traditional console-style gaming experience has already been laid by Apple. For example, modern iPhones and iPads already feature support for third-party Bluetooth controllers, GameCenter social networking integration, and iCloud syncing of game saves.
Extending those capabilities to the Apple TV, and adding an App Store, would give developers the ability to create more traditional console-style games for the living room on Apple hardware.