Apple Arcade Struggles to Find Its Footing Despite Apple’s Deep Pockets

Apple Arcade hit the scene back in 2019, offering iOS and Mac users a treasure trove of over 100 games without ads. But it seems the gaming subscription service hasn’t been the money-maker Apple hoped for. Recent reports paint a picture of a service that’s struggling to attract users and would be unprofitable if not bundled with other Apple services.

According to The Information, Apple Arcade gained just 2 million users in its first year, with about 25% of those on free trials. For a company with over 2 billion devices in circulation, that’s a surprisingly small number of people willing to pay for the service.

The report suggests Apple Arcade and Apple Fitness+ likely wouldn’t be profitable without the Apple One bundle. This bundling strategy effectively hides the true financial performance of these less successful services by packaging them with more popular offerings like Apple Music and iCloud storage.

The financial struggles extend to Apple’s relationships with game developers. According to mobilegamer.biz, payments to developers have been steadily declining since October 2020. Initially, Apple offered generous upfront fees that made early Arcade games profitable from day one, but both advance payments and ongoing revenue shares have reportedly shrunk considerably.

“We’re going to see that amount decrease and decrease and decrease until it’s pennies,” one developer told mobilegamer.biz. “At that point putting a game on Arcade starts to become much less viable.”

Apple’s strategy shifts suggest an attempt to stem the financial bleeding. In spring 2021, the company canceled numerous projects in development, leaving many developers frustrated. Since then, Arcade has pivoted to focus on family-friendly games with recognizable brands and existing App Store games converted to remove ads and in-app purchases – likely less expensive options than funding original game development.

The financial troubles might stem from a lack of passion at the executive level. One studio executive told mobilegamer.biz that at the top of Apple, there simply isn’t the same enthusiasm for games as there is for music or TV content.

Despite its underwhelming financial performance, Apple continues supporting Arcade. With nearly limitless funds, the company can afford to keep unprofitable ventures running, but the question remains how long they’ll continue pouring money into a service that isn’t connecting with users.