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The Apple Gaming Console?

appleRemember the Apple Pippin?

Of course you don't. Apple buries its failures like John Wayne Gacy, and keeps a smiling face on every new move it makes. Dig a little, and you'll find out that the Pippin was an ill-fated, poorly selling Apple game console.

So take note as the Jobsian Cupertino Cult starts to cast its roving eye toward gaming, videogames, the land of electronic entertainment -- the big one. Rumors range from a new Apple tablet computer's possible support for gaming (obviously) to talks about an EA acquisition (not likely), all the way up to the central speculation that Apple might just launch its own console in the coming years.

After years on the sideline, Apple may finally be taking serious interest in games again.

And why not? The iPhone has been making loads of money, and a lot of that money comes from downloadable games.

But before you get too excited, remember the Pippin, the original Apple gaming home console that has gone down with the Newton and that small box-shaped Mac as an epic Apple Fail.

Still, you don't have to like Apple to wonder if it has a chance at breaking into the brotherhood of gaming-console makers. After all, not many people thought Microsoft could pull it off, and these days the Xbox 360 is the hardcore gaming platform of choice, a model for weaseling into the industry. And with a reported $27 billion or so in the bank, Apple has the resources do just about anything it wants.

So what's it going to take? If Apple wants to avoid the Pippin Mach 2, there are few key things it has to do to make it in the winner-takes-all nerdfest that we affectionately call the Videogame Industry:

1. Be prepared to lose money, a lot of money, for a while.

Once upon a time, a couple of smart fellas could get some wire and sit in their garage and invent a gaming machine. Times have changed. Microsoft proved that if you want to swim in the big-boy pool, you have to be ready to spend a lot of cash.

According to VentureBeat's Dean Takahashi in his book, "The Xbox 360 Uncloaked," the original Xbox lost the company an estimated $3.7 billion. More surprisingly, he points out that internal estimates pegged the possible losses at more than $3 billion up front, a number Bill Gates had in hand when deciding to sit down at the no-limit poker table that is the gaming-console business.

Microsoft threw down that much and, more than that, stuck with it year after year before it finally hit gold with the Xbox 360. Takahashi figures that Microsoft has sunk tens of billions into the Xbox line, and continues to invest an estimated $6 billion to $7 billion a year to generate a few hundred million dollars in profit each year.

Apple has been accustomed to organic growth and the explosive, exponential expansion of new markets hit with surprising technologies. If it wants in on the console bloodbath, it needs to be prepared to commit the resources -- because consoles remain the Stalingrad of the gaming business. Just ask Sega.

2. Stop jerking developers around.

Back when Apple had 3 percent of the personal computer market, it used to encourage and coddle its developers. Anyone who was crazy enough to actually spend time and effort developing for the Macintosh felt special, smart and a part of an elite group, even if they would have been better off financially in the PC market.

Then the iPhone happened.

Apple kicked off the biggest California Gold Rush since 1849 when it threw open the doors of its App Store. At first a trickle, then a torrent, of developers raced to write applications for the system, based on rumors of people making hundreds of thousands of dollars off applications that made farting noises. The smell of money was in the air and developers, by the thousands, started pouring their creative talent and energy into making the iPhone the coolest software platform in town.

Apple responded like Boss Hogg, at first gloating, then bullying, then simply ignoring the developer community.

Today, as Bejeweled knockoffs and endless castle-defense clones pour into the App Store, Apple can afford to blow off a few thousand eager game developers. App Store developers are a dime a dozen. Successful console developers -- with experienced, capitalized and large development teams -- don't want to be treated like Cuban boat refugees. Do that and the most capable developers will paddle off to other platforms -- like the Google Android, the Palm Pre or even, gasp, the Nintendo DS or Sony PSP.

3. Or, if you are going to jerk developers around, buy some studios. Perhaps plan on buying a lot of studios.

Purchasing Rare helped the Xbox. Buying Bungie saved the Xbox.

First-party games serve an important place in the game-console ecosystem. For one thing, they tend to rake in the dough (see Nintendo). And even when the in-house studios don't knock it out of the park, they provide a clear signal that the console maker believes in its system, and will place big-dollar development bets on its own hardware.

No console has ever succeeded without strong first-party support.

So, Apple has recruited a few game executives. That's a start. Instead of talking about buying EA -- something it could afford to do, but wouldn't make for a good fit -- Apple needs to get serious about assembling studios under its wing that have a track record for delivering hits. Too bad id already sold.

4. Come to E3.

Love it or hate it, the route to the world of games runs through E3. If Apple really intends to launch a new console in 2013, as some have speculated, then it had better plan on showing up at E3 in 2011 with something.

To avoid E3, or show up at the last minute, is to misunderstand the baroque structure of the game business, which requires lots of relationships with lots of different people. The court of Louis XIV had nothing on intrigue and politics compared to the game business, and E3 is royal ball where hype fuels deals and makes things happen. And while you are at it, Apple better plan on becoming a fixture at the Game Developers Conference. Now.

And, hint hint, Apple, you probably wouldn't hurt yourself to throw some ridiculous parties. That always gets the fans talking.

5. Apple has to stop acting like Apple.

The things that have made Apple an astounding success in the past few years -- beautiful and easy-to-use products, snobby chic, upscale margins and CIA-like secrecy -- won't serve it well in the videogame business.

If Apple launches a beautiful and easy-to-use console that costs too much, it will fail (See 3DO); doesn't have developer support or fan support, fail (Phantom); or just doesn't have the financial stamina to stay in the game, fail (Dreamcast). All the hype and elegant design in the world won't help if one of these pieces is missing.

And keep in mind, past performance is no guarantee of future success.

Apple upset the portable-music business because it was inert and there were no good options to compete against the iPod. Apple turned the same trick with the iPhone, showing that an application store was what cell phone customers really wanted (and if you could throw in a science-fiction-cool interface, all the better).

With gaming, things are different.

The world of gaming doesn't need Apple right now. With the big three console makers cranking out one crazy idea after another, and innovation in game design continuing to sparkle with creative energy, if Apple wants a spot in this line dance, then it better learn the steps.

Busting in with a prima donna attitude and a stony-eyed Steve Jobs glare will only earn Apple something it already has: a failed game console no one remembers.

18 Responses »

  1. Wow! What an attitude this writer has against Apple. Just because Microsoft has lost and continues to lose money with its Xbox does not mean others will. And, YES, the gaming industry could use some new ideas and blood.

    And please stop being a Microsoft shill.

  2. The Pippin console was lauched in 1995 while Jobs was at Next. Jobs only returned in 1997 and proptly killed (among other products) the Pippin.

    So how is Jobs responsible for the Pippin mess?

  3. I say, 'remember the iPhone'.

    Apple is already dancing this dance and they don't have to do it with a dedicated game console (the shortsighted approach that the others are pursuing).

    Apple just needs to keep reinventing the computer category as it has with the iPhone and iPod. Games will just follow but Apple won't have put all its eggs in one game console basket.

  4. Ah, yes. Remember how they completely failed with that stupid iPhone? It was obvious they would after the pathetic ROCKR they produced in partnership with Motorola. And the game situation is clearly much worse, since the failed console was created using Bandai who -- unlike Motorola -- had the market leading product in its category at the time, and of course that happend much more recently under Jobs, while the ROCKR fiasco was John Sculley. Oh wait, it's the other way around.

    All they need to do is make Apple TV able to run iPhone games (or uses iPod Touches / iPhones as controller) with a software update and they'll have a gaming console that has more content than any other platform.

  5. "Apple has to stop acting like Apple."

    And be like MS or Sony? Last time I checked their stocks are getting hit by the recession while Walkman and the Zuune left in the dust.

    I don't get why so many thinks they could make better decisions than Apple. With their recent success entering the celphone industry and AAPL performance quarter after quarter with cash growing and zero debt, I doubt that anyone with a half a brain would want Apple to change anything.

  6. Um, I don't think Apple wants to get into the gaming market, probably for all the reasons you list above.

    I think the iPhone allowed them to experience the gaming market, but it was more the gaming market coming to Apple's platform versus Apple making a platform to entice game developers.

    The console gaming market is far too established for new entries. However, if Apple developed another playform--similar to the iPhone--it could compete in the mobile gaming world. It has a strong business model, excellent on-demand software distribution model, and Apple is best at consolidating existing growth markets around one platform and exploiting that.

    I agree with your article, but I think you are misguided into thinking Apple will either enter the console market or change it's behavior. Their current behavior got them $30B in cash reserves and a very strong stock price with high margins. Apparently, nothing seems to be broken.

  7. This article sounds like all the warnings when Apple considered the iPhone launch.

    Who is being gored here or is this just the standard FUD from the Microsoft side.... I would seriously be worried at Microsoft if Apple gets its sight set on gaming.

    I see a slow evolution into gaming as the iPod / iPhone /iTablet ecosystem evolves and the delivery system is deployed over the next few years... then a thunderbolt will be presented that will change the whole equasion ......

  8. uh, the Apple Pippin was really the Bandai Pippin and was only really released in Japan, I think.

    I think Apple designed it but Bandai manufacturer it, marketed it and sold it, NOT Apple.

    It was basically a low-cost games machine that ran on the Mac OS (9 or pre-nine back then).

    Yes, it was a dismal failure but don't blame Steve Jobs, I don't think he had returned by then.

  9. I'm sure I'm not the only one to respond to this outlandish article, but suffice to say nonetheless. You are aware that over a billion apps have been downloaded from the iTunes App Store for iPhones/iPod Touch, of which the great majority of which were games? I'd say Sony, Microsoft and even Nintendo would be thrilled with a 1/4 of that for their sales in a year. In fact, Sony is so concerned, they're burning 24/7 to get their suddenly outdated DS to act like an iPhone and provide an app store.

    It's this same rubbish we heard when the Mac was launched, the iPod, iTunes Store, and now the iPhone. Some people are pulp writers instead of industry leaders for a reason...pretty sure this article defines the former!

    /

  10. This article reads like it was written by a pimply faced kid who spends all his time playing XBOX. A technology that was, BTW, only made possible by APPLE, not Microsoft. Microsoft were perfectly happy using horrible (at the time) Intel and AMD designs. Power PC was much faster than Intel, back then, which is why they used it and then later switched to Intel.

    Apple has already totally devastated the mobile gaming market (or created it, depending on how you look at it).

    Apple doesn't have to kowtow to developers or jump around on stage like Monkeyboy, because they have, quite obviously, the best computer system and mobile game market in the industry.

    Microsoft is an industry joke now, people are catching onto that very slowly, and continues to lose money with XBox.

  11. First Pippin was pre-Jobs and never left the company.

    Second and probably most telling, I think this was the attitude of all the portable MP3 players, remember RIO dominance, and almost word for word the cell phone gang. Vibrant competition, lots of special sauce learned in the market, and Apple is a newbie with no clue.

    Third: I don't think Apple wants to compete with Wii, XBox, or PS3 and their expensive DRM laden games nor the PC gamers, nitch of nitches. So not to worry.

    Fourth: Where is the next big step, I don't know, but if like the iPhone or iPod or iPod Touch it has some gaming features, I would really really worry if I was MS, Nintendo, and Sony. The game developers are hurting big time, perhaps there is time for a big change.

  12. This writer first compares Steve Jobs to a serial killer, then proceeds to go back in time fifteen years in search of an Apple failure. Fair. Balanced. Unbiased. Yeah, like Fox News (oxymoron alert). Apple is a company. They make products. Some people like them. Some people envy them. Some people envy and hate them, and hatred twists their viewpoint. As in the case of this writer.

  13. For years Apple resisted the game console or gaming in general. I think it had to do with trying to be taken seriously. Hopefully with the success of games on the iPhone, they are over that.

    They have a great opportunity to produce a game console with the processing power and 1080p graphics of the Xbox 360 and PS3, but with the motion sensing controller of the Wii, I'll be first in line to buy one. With an HDD, WiFi, and Blu-ray player, they could discontinue the 720p AppleTV.

  14. Writer doesn't realize he is talking about Apple. Don't even compare them to Sony Nintendo or Microsoft. Those deadbeats have little innovation if any in the last 5 years. I guess Nintendo Wii was a nice gimmick but even the iPhone has a more sophisticated gaming architecture than Nintendo's. It is laughable how you talk as if the other three are successful. They are mediocre at best and game developers are flocking to the iPhone. Imagine that.

  15. Let's talk after MSFT digs itself out of the 20 billion hole the unprofitable XBox sunk them into. To be fair, they've had 5 or 6 positive quarters in that division, but pretty soon, they'll have to refresh the hardware, and that'll mean opening their wallets again. They've desperately tried to plug the XBox as a movie download center to recoup some of their loss, like anyone's going to be happy watching movies on a noisy game console. Moreover, gamers have less reason to buy a Windows PC because they can buy a cheaper XBox instead; thus, they cannibalize the only segment of the consumer market where one might have argued PC's were competitive with Macs, in games, because their are more PC titles than Mac titles.

    Apple may or may not do a game console, but they are ALREADY reaping respectable PROFITS off iPhone (casual) games. As an investor, I am pleased.

    Game consoles are a tough market; I think only Nintendo, with the Wii, sees FREQUENT profitable quarters.

  16. Apple will not do a game console.

    So what's the point of this article? It might just as well be about the never announced, but failed, Apple MRI. or the never announced but never forgotten failed Apple Hybrid motor scooter.
    Silly

  17. Apple is the leftist sweetheart.. I dont trust them to provide the TNA and level of violence the I demand.. You know teachers and artsy fartsy folk.. Im sure they will support their Apple console.. but it will remain a bit player like it is in the computer business.. Game fanboys are demanding and cheap..

    Sony is hardware company.. Microsoft is a software company.. Nintendo is both... Room for Apple beyond its fans?? Apple computer fans will purchase a game media extender/console.. iphone.. not so much..

    With 4 players the pressure to cut prices will be brutal..

  18. I have always been a HUGE apple fan - I play the xbox 40 - 50 hours a week - Im a huge Halo fan - I WOULD LOVE A MAC GAMING CONSOLE - reasons as follows

    1- NO HACKERSSSSS
    2- apple has a better chance at killing internet lag problems
    3- better software
    4- better hardware
    5- BETTER CONTROLLER
    6- it will be more expensive which will weed out certain people that i despise on xbl
    7- PLEASE GIVE ME AGE VERIFICATION SO I DONT HAVE TO LISTEN TO SQUEEKERS TALKING TRASH
    8- BETTER UPDATES AND BETTER PROGRESS
    the list could go on forever

    PLEASE STEVE JOBS i want a mac gaming console