Apple is investing heavily in its video games service, Arcade, which, if it can get the mix right, is estimated to outgrow both its news and TV subscription revenues.

Building a compelling cloud gaming service requires some complicated back-end work, which both Apple and Google, with its Stadia platform, are now working hard to build. The greater complexity however is content.

With extreme competition from gaming heavyweights Nintendo, Microsoft, and Tencent, as well as Google, Apple is spending hundreds of millions of dollars securing exclusive games for Arcade, the Financial Times reports.

The service was revealed at an event last month in which the company also announced a new credit card product and upgraded news and TV service offers, each appended with a techie ‘+’.

According to certain sources that spoke to the FT, several of whom are involved in the Arcade project, the company is spending several million dollars on for each of the games that will populate the platform. The total budget is expected to clear $500 million.

However, the rewards of gaming could be larger than those for news and TV subscriptions. An estimate by HSBC foresees Apple’s gaming service becoming larger than the TV+ service by 2022, and becoming a $4.5 billion business by 2024. But this is based on an estimated monthly subscription fee of $12.99, though Apple has not said how much the service will cost.

However, questions still surround the kind of service it will be. The company is said to be targeting smaller, independent games manufacturers in contrast to its big-name TV+ service.

Meanwhile, with its News+ subscription service, the opportunity is far clearer. But for some, the start has been rough. Some reports suggest that Apple somewhat overstated its offer to publishers, some of whom were drawn to some of the designs shown in presentations, according to Digiday.

Sourced from Financial Times, WARC, Digiday