When news broke that Apple was buying PrimeSense, my imagination starting going wild. I’ve been excited to see how Apple TV was going to be updated, but with the acquisition of PrimeSense, excitement is nearing level 10! Updating Apple products after they’ve had a breakout performance can be somewhat of a let down when the update doesn’t match some of the rumors. With Apple purchasing PrimeSense, I don’t see how future Apple TV updates won’t have people lining up to buy it like it was with the first iPad. Let me tell you why.
The App Store reached its 50 billionth download on May 16th, 2013. Apple and iOS developers are able to reach an enormous audience with the success of iOS. Since this audience is so large, new apps are popping up in the App Store daily. Apple and its developers are well aware of this and are always trying to find a way to tap into this profit potential. This is were PrimeSense will sweeten the profits for Apple and application developers.
When Xbox came out with the Kinect everyone was talking about it, but after you played one of the Kinect games, if you were like me, you had to have it. By early 2011, Microsoft had shipped 8 million to retailers and projections showed revenue would pass the billion dollar mark. These profits were realized with the Kinect being on the market for less than a quarter. When you’re in the software development market, this grabs your attention. If Apple wasn’t thinking about a way to make more money in the App Store before Kinect came out, they were in early 2011.
Getting Apple TV to where it needs to be to support 3D sensors and interactions would be crucial. It is my belief the 4th generation Apple TV will be sporting the A7 chip to gear up for 3D censoring and processing. The current A7 chip Apple uses may not be able to handle the load as smoothly, so Apple will likely introduce a A7X chip to handle the processing. In addition to needing a better processor, I believe without reintroducing some storage capability in a future generation Apple TV, it will be hard, if not impossible, to play large file games many demand on current game consoles.
Reintroducing file storage on the Apple TV will open up gaming capabilities. I always thought Apple made a mistake moving away from having some type of meaningful storage on the device. Prices for flash storage is far cheaper than it was years ago, so keeping the price point low for the Apple TV was important to introduce people to it, as well as get people talking about it. Now consumers have established a relationship with their AppleTV, so imagining life without it is…well, terrible. Reintroducing different levels of flash storage, 16GB, 32GB, & 64GB, will bring Apple TV to the App Store and this is where it’s all about the Benjamin’s.
The Xbox One and the PS4 were just released, along with their production prices. It cost Microsoft $471 to make an Xbox One, which nets Microsoft only $28 from the $499 price tag. PS4 production cost is only $381, netting only $18 from the $399 price tag. These profit margins are extremely low for such in demand devices. The real moneymaker is in the games and the online environments gamers log into to interact with one another. Apple will easily tap into these profits if they introduce gaming on Applet TV since 30% of each sale made on an app goes to them. Given the amount of money made on games like Angry Birds, Fruit Ninjas, and Words With Friends, Apple will be able to rake in huge profits off of more interactive and in-depth games, which will hold much higher price points.
I am sure some of you are thinking Apple won’t be able to pull all of this off without a controller. Well, developers are way ahead of you. Third party manufacturers are already working on controllers after getting the green light during the Apple’s Worldwide Developer’s Conference. I have already seen one circulating the web. It’s the Moga Ace Power Controller and it’s available on Apple’s website for $99 and compatible with iOS 7. Innovations like this show the direction Apple and developers are steering in for future gaming updates. With some of the steps Apple has made to position themselves in the gaming world makes me wonder what future consoles will look like. Given the current productions cost of gaming consoles, how long can they survive if Apple is able to produce a product that will deliver similar gaming at drastically lower prices across the board? Everything comes down to price and I believe Apple has made good moves to competitively enter the market once they reveal what will drive the software. Purchasing PrimeSense gives us a glimpse of what they will be capable of.
There is only one other aspect I’m still torn about how this will roll out. A lot of talk has been about Apple coming out with a television that will have Apple TV capabilities built into it. This would be interesting to see rollout, but I think the price tag would be too large for mass amounts of people to jump onboard. The price point of the Apple TV unit is much more attractive than what a television would go for. People have already bought off on Apple TV, so why lose that loyalty to the unit? Just improve upon what people are already using, and that’s the direction I see Apple heading in with acquiring PrimeSense. Adding a sensor unit to a future Apple TV would allow them to re-enter the game console industry they tried getting involved with years ago. Anybody remember Pippin?
With as much revenue Apple has to spend, they are able to go out on a limb and try something like this out. Although it will cost them a lot of cash to get something like this off and running, they already have a tremendous following in the App Store for OS and iOS devices that users are willing to throw cash at, so why not try for another segment of users. If it fails, Apple TV takes a fall from the Apple money tree. With this tree being so massive, the branch below is able to catch ’em, dust ’em off, and tell ‘em it’ll be alright.