Apple Is Going Against the Grain With Its Arcade Gaming Service

Like so many of its Big Tech peers, Apple wants in on the gaming boom. But if its preview of Apple Arcade was any indication, it won't be following the herd.

Among its many announcements on Monday, Apple (AAPL - Get Report) teased a forthcoming service called Apple Arcade, which was described by Apple product manager Ann Thai as the "first game subscription service for mobile, desktop and living room." Apple shares declined 1.21% on Monday but were up 0.54% to $189.76 on Tuesday afternoon.

Apple Arcade stands in sharp contrast to the ambitious cloud gaming projects recently touted by tech rivals Alphabet (GOOGL - Get Report) and Microsoft (MSFT - Get Report) .

For one thing, you'll be able to play Apple Arcade games offline, Thai said. And in a trailer shown at the event, Apple described the games that will be included in Apple Arcade as "games that redefine games" -- no gory first-person shooters were featured. Rather, the service's focus seemed to be immersive strategy or adventure games that might be drowned out mainstream venues, in the words of one developer.

Apple didn't announce pricing or a release date for Apple Arcade, though CEO Tim Cook told the audience that more details would be coming by the fall.

Want to learn how the major tech players are shaking up the gaming industry? Download our report.

According to Amir Ghodrati of App Annie, mobile gaming could be fertile ground for a new subscription-based business model such as Apple Arcade.

Gaming on iOS is hugely popular. According to App Annie's research, games accounted for 74% of worldwide consumer spend across iOS and Google Play in 2018, with total spend on iOS outpacing Google Play by 50%. But mobile games with upfront payments make up a much smaller proportion of mobile game spending, compared to freemium or ad-supported games. This indicates that while the appetite for mobile games is huge, people are less inclined to spend money on individual games. 

A subscription service could change that, Ghodrati suggested. 

"I thought they addressed that point of interest really well," he said. "With the subscription service, that's going to open it up to more monetization from these games. People aren't as willing to pay up front for games on Apple, so having a venue for these games is going to be good for everybody," he said.

Apple, Microsoft and Amazon are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.

Will You Have Enough Money to Retire?

Want to learn about retirement planning from some of the nation's top experts? Join TheStreet's Robert "Mr. Retirement" Powell live in New York on April 6 for our Retirement Strategies Symposium. For a limited time, tickets are available for $99 for this full-day event. Check out the agenda, learn about the speakers and sign up here.