In March, rumors of a newApple(NASDAQ: AAPL) TV streaming service and revamped version of the device itself took center stage in tech news. Much of the media attentionfocused on a likely attempt by Apple to disrupt cable as we know it as content providers transition to Internet-based models with Time Warner andHBO leading the way. But what about gaming? With the rumored set top box supposedly including the first third party Apple app store targeting television, will the company aim to disrupt the entire gaming market?
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How Apple could compete with PC and console gaming
Apple is not new to gaming. Games are rampant in its iOS app store, from simple titles like Flappy Bird to graphic-intensive games like Game of Thrones.
Gaming on iPhone 6. Image source: Apple
If an Apple TV app store becomes as attractive to developers as its app store for iPhones and iPads, the company could quickly become a leading platform for games built for television.
And keep in mind we are not talking about the Apple TV we know today with the addition of an app store. If BuzzFeed's "sources familiar with the company's plans" are correct, this new version of Apple TV will be "a significant overhaul of the device":
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As for the new Apple TV box itself, expect an updated design and new innards: the company's latest A8 system-on-chip -- or a variant of it: [sic] a dramatic increase in on-board storage to accommodate app -- well beyond the 8GB in the current device; and an improved operating system that will support Siri voice control of Apple TV, and enable it remotely for a selection of Homekit-enabled home automation devices, as earlier reports have suggested. Presumably it will also feature a new remote.
Just how big is the opportunity?
In a note to investors on Monday (via AppleInsider), JPMorgan analyst Rod Hall said he was bullish on Apple TV, citing a $35 billion market for gaming software in the combined PC and console market. Hall explained that a 10% share of this gaming market could increase the company's bottom line by 1.5%.
Apple TV. Image source: Apple
Hall also noted that if rumors are true that Apple TV innards will get an overhaul, a foray into graphic intensive gaming is realistic.
Neil Hughes, a writer for AppleInsider, paraphrased Hall:
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 long-standing console market.
With CEO Tim Cook ending the habit of referring to the Apple TV as a hobby last year, hinting that it is now taking the market seriously, a concerted effort to disrupt cable with more Netflix-like offerings and gaming with an Apple third party app platform for TV seems likely. And given that the last time Apple updated its Apple TV hardware was March 2012, the set top box is due for an update anyway -- not to mention that the current UI is seriously behind the times.
The article Will Apple Inc. Soon Compete Head-to-Head With Gaming Consoles? originally appeared on Fool.com.
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