Apple launches a subscription service for games. Ukrainian MacPaw has been developing a similar product for two years

What Arcade means, why Apple and the market need this

Arcade service will start work this fall and its cost is unknown. At the start, they promise a collection of more than 100 games that will be exclusives of the service. This means that they will not be available without a subscription to Arcade and will not receive ports on Android.

The bet on exclusives is not a novelty for the gaming business, but it was mainly a phenomenon of the PC and consoles market. Now Apple has adopted this tactic: the company will partially finance part of the projects, as well as work with indie developers to content Arcade.

Apple is concerned about the dominance of freemium-games on the App Store, as explained at the presentation. This model of monetization (free game + built-in purchases) makes it difficult for indie developers to succeed — they often rely on direct sales and cannot compete with projects of the Fortnite or Clash of Clans scale.

It should be noted that Apple itself just stands to benefit from such projects, the company receives 30% of all in-game transactions. To understand what amounts are in question, it is worth referring to the example of Fortnite. After launching on iOS in March 2018, by February 2019, the game earned more than $ 500 million — such an estimate is given by analysts from Sensor Tower. Consequently, Apple received about $ 150 million.

It is still unknown how the monetization of the new service will be organized: Apple has not disclosed what percentage of the proceeds will be distributed among the developers. What is known for sure: the games will be available without connecting to the network and they can be shared in the framework of “Family Access”. That is if the subscription to the service is activated by the head of the family, up to 5 people can use it.

Another key point is cross-platform. Apple announced that the games will be available on iOS, Mac, and Apple TV. At the same time, the service supports cloud synchronization of progress — you can start the game on one device and continue with the next one. This is another reference to Apple’s plans to make development for all platforms (from iOS to macOS and tvOS) a universal process.

However, while the complete list of available games is unknown. On the Apple site, only a few titles were allocated:

• Where Cards Fall by Snowman from The Game Band;
• Oceanhorn 2: Knights of the Lost Realm from the studio Cornfox & Bros .;
• Beyond a Steel Sky from Revolution Software;
• The Pathless from Annapurna Interactive and Giant Squid studios.

Technically, Arcade “settles” inside the App Store application, the service tab will replace the “Updates” section. The section filling will be handled by the Apple team of curators — there will be familiar features about developers and projects, passing tips and other interactive content.

What MacPaw does

Apple is not the first company which is going to sell monthly access to a collection of apps. For two years now, this business has been developed by the Ukrainian company MacPaw, best known for the CleanMyMac utility. In 2017, MacPaw launched Setapp, a Mac application store.

It works as a subscription ($9.99/month or $107.88/year) and currently provides access to more than 140 applications from 129 developers. There are family accounts – for $14.99 or $179.88/year and you can add an unlimited number of family members. In the future, the number of applications will be limited to 300 titles — as much is needed to cover all the needs of a Mac user. Now there are already 10 sections in the store: from tool developers to writing programs.

The projects have a different audience and content. Arcade is an entertainment service. Setapp is focused on increasing productivity and only on macOS. Arcade will sell new games that cannot be bought separately. Setapp collects existing expensive utilities and programs in one place, saving money on direct purchases.

But the projects are united by a business model: they sell applications by subscription, take part of the proceeds for themselves, and distribute the rest of the money among the developers.

This similarity is emphasized by the founder of MacPaw Alexander Kosovan in the comments for AIN.UA:

“By launching Arcade, Apple has created a service that, with its business model, is similar to the product MacPaw has been working on for several years.

In Arcade, users get access to mobile games selected by the Apple team for a monthly fee, just as Setapp users get access to applications for macOS.

Setapp’s vision is the optimization of the Mac App Store by solving its problems: an abundance of poor-quality applications, a difficult process of finding the right applications for specific tasks and unpleasant surprises in the form of advertising or additional in-app purchases. Setapp users have instant access to really high-quality, carefully selected applications, without additional purchases or advertising. (Today, 149 applications from 129 developers are available in Setapp).

We specifically focused on Mac applications, because we believe that people should have more opportunities to be productive, paying attention to what is really important.”

Unlike Apple, Setapp revealed how subscription earnings are distributed. Most of the revenue is received by the developers. 70% of the funds are divided between them, depending on the intensity of their application. 20% are distributed to partner deductions — developers get these bonuses depending on the “value” of the users listed. And only 10% gets MacPaw.

Speculating on how Apple will make money is meaningless. In addition, it should be borne in mind that the company will subsidize the development of certain applications. However, the news service Apple News Plus, which gives 300 magazines access to the content for a single subscription of $ 9.99/month, has already been criticized for aggressive monetization — there Apple takes 50% of its revenue. Because of this, the New York Times and the Washington Post refused to cooperate.

Why is it important

In order to collect more than 100 applications, the MacPaw team spent a year. Apple’s resources allow them to announce such a number of games from the start. Setapp collected 20,000 paying users 1.5 years after launch. The number of Arcade subscribers will be in the millions. But projects are symmetrically changing the established market for applications through subscriptions: Ukrainians are competing with the Mac App Store, and Apple wants to bring indie developers to the light.

Although Ukrainians are two years ahead of Apple, now it is up to Americans — the success or failure of Arcade will show whether users are ready to switch to a service model in yet another area of consumption. It has already become the norm to subscribe to movies, TV shows, books, and music. Perhaps the appearance of games and applications in the list is a matter of the near future.