Did you know 240M televisions were sold worldwide in 2012? Almost 40M in the US alone. I’ve written before about what I’d want in a set-top-box and how xBox and Playstation could be disrupted by an Apple TV supporting apps & games. Now that the new iPhones and iPads are out and show the hardware roadmap, rumors about an updated Apple TV in 2014 are swirling and I’ve spent more time with the XBox One and Playstation 4 checking out their gaming, set-top-box & media integration. I think the time is finally ripe for apps and games on Apple TV.
What it seems likely Apple will do:
- Introduce a new model Apple TV with better graphics, more memory, and local storage for apps, priced at $149 (16GB) – $249 (64GB), retaining a 40%+ profit margin. Use a slightly beefed up 64-bit A7x chip like the one found in the iPad Air & mini but with even more GPU horsepower and running at a higher clock speed since it’s a plugged-in device and can both use and dissipate more power. An “A7x+” – 2x to 4x the GPU cores/power and a somewhat faster CPU. Updating the CPU/SoC has negligible manufacturing cost impact, but boosting to 4GB DRAM (+$25) and local storage/flash drives up the price slightly.
- Introduce its own bluetooth gamepad controller which works with older and newer Apple TVs for $79-$99. It would be brilliant to enable support for users with existing Sony DualShock 3/4 and XBox Controllers – there is evidence of DualShock 3 support in iOS, but this may be a red herring. These are both great controllers (DualShock is simply Bluetooth), and they mostly fit the MFI specs for iOS controllers.
- keep the existing $99 Apple TV price point, updated to the 64-bit A7x with 1GB DRAM and 4-8GB flash, perhaps enabling support for (on just the most recent/older 3rd-generation models) some non-graphically-intense apps and games for existing Apple TV users, but the lack of RAM and storage limits this possibility. The newest $99 model in any case won’t have the more powerful GPU or storage capacity for more intense games – it’s the SKU for basic streaming and basic apps, but it’s easy for most consumers to prefer the $149+ versions.
- update the on-screen UI to support using the bluetooth game controller for navigation. Irrelevant to this product to have a dramatically different UI than the past, but they might roll out a more iOS7-like UI as long as they’re updating.
- introduce an App Store for buying games and other TV App content, with some restrictions on what can run on older/normal/$99 vs. newer/$149+ Apple TV’s – e.g. photo/screensaver apps can run on either, racing and first-person-shooter games only on newer models, as happened with games on iPhone 3G vs 4 vs 5 depending on their use of OpenGL ES. The UI target resolution will be 1920×1080 (1080p) and this will become another “universal app” target for developers.
- likely some minor announcements around new or improved movie/tv/streaming/content partners, but this update will be more focused on games.
What doesn’t seem likely:
Some of my previous thoughts about ideal set-top-boxes include better integration with my cable box via HDMI pass-through and the ability to control other peripherals and do a universal guide overlay and unify search. I still dream of this idyllic future, but having used the disappointing XBox One, TIVO, Playstation 4, and other devices which try and fail to integrate other devices well, fail on voice, and don’t do a great job integrating other sensors, I think many other features are not possible technically and business-wise to the level of Apple’s user-satisfaction bar in 2014. Kinect-like interaction via the PrimeSense acquisition isn’t in 2014 for Apple. Ultra-HD/4K is not a 2014 target, either. Games and utility applications (weather, screen-saver, home-calendar) accessed with the standard remote and a quality bluetooth gamepad are the simple no-brainer to support adding new content – developers are, in fact, champing at the bit to put games and other types of apps on Apple TV with a quality, responsive controller. I have heard some hints from some game developers that they are doing work “sort of like this.”
Why not just improve AirPlay from existing devices?
AirPlay can be used to project audio, photos, and video or to project the screen contents from an iOS device to a TV through Apple TV. For showing your friends a few photos or videos off your phone or watching a slideshow from iPhoto this works pretty well, and it can also work for some simple types of games and apps. But, using an iPhone or iPad as the main CPU and GPU and input controller to run a sophisticated game (or any application with touch or accelerometer interaction) and then projecting it to an Apple TV to your TV simply has too much input lag due to the way the device must process your input, then generate graphics, the frame-buffer must be encoded, transmitted over WiFi, and then decoded and sent to the TV — about 0.5-1.0s of lag. 4K media would make this even worse. The CPU+GPU and storage will have to be directly wired to the screen for the foreseeable future.
What about games that have some UI on the TV and some on your iPhone/iPad?
Nothing will prevent developers from doing dual-UI with their games, and I’m sure some will do so (it’s pretty fun to do on the Wii U if you haven’t tried Super Mario 3D World with a friend, you should), but developers will be do it with applications triggering one another’s launch via bluetooth and communicating small amounts of data peer-to-peer over Bluetooth and WiFi, with code running on both devices, not by having the iPhone/iPad project video to the Apple TV or vice-versa. There is simply too much input lag, and Apple cares about smooth and responsive.
What about an actual television?
I personally think there is a great opportunity for somebody to disrupt the TV space with the smarts found in Apple TV. TV manufacturers struggle with software and UI – the smartest “smart TV’s” out there offer horrendous software and services from every angle compared to using an XBox, Playstation, Roku or Apple TV as the main device. Lots of opportunities to beat existing TV folks, especially for the likes of Roku and Apple, who have clean UI. Apple is also in a unique position to sell high-margin flat-screen TV’s from their retail locations – many people underestimate the value of those retail locations so nearby consumers. That said, I don’t think it makes sense for Apple to sell an all-in-one Apple TV + screen in 2014 or possibly ever for two reasons:
- it’s not a great idea to couple the long-term purchase of the expensive screen (average replacement cycle for TV screens is 3-5 years these days) to the goal of an every-year-improving Apple TV set-top-box. Consumers will spend $99-$149 for easily-updated devices that get better and better along some axis, and there is tremendous room for hardware improvement in the CPU and GPU of this device while retaining the $99-$149 price-point
- the big transition in screens coming is UltraHD/4K – I would expect if Apple wants to start selling TV’s it would do so by selling a 4K TV + Apple TV bundle and encouraging you replace the docked Apple TV portion yearly for $99-$149 rather than having you replace the whole screen. My other guess is they would do this kind of work only after securing enough capacity for retina-quality displays for all Macbook Air’s and iMacs, so 2015 at the earliest.
Will it compete with XBox and Playstation?
In the short-term, not exactly – the types of games that can be written for a device with even these greatly improved specifications can not, I think, be as immersive and intense as the sports, racing, and combat titles which dominate sales on traditional consoles. You will probably hear it being dismissed by gamers and gaming industry executives at launch because it’s won’t have the power to run these types of games. However, longer term it will have tremendously disruptive effects on consoles. In fact, life-threatening effects, such as:
- Raising the user-interface and user-experience bar dramatically. Many of the UI atrocities I documented and hundreds if not thousands more (like how long games take to load, how you interact with streaming services, etc) are taken for granted on traditional consoles. A simplified, more iOS-like approach to applications and how they are installed, save data, launch and how you switch between them will make consumers far less tolerant of existing consoles. Neither Sony nor Microsoft have shown great ability to simplify their own UI or influence the UI of their games.
- Driving down game prices. A more open distribution channel like the App Store as well as an inexpensive but not-subsidized initial console creates an ecosystem where app and game prices will compete and get driven down. Sony and Microsoft need to recover money lost on the console itself from game sales, and they act to curate and control titles and keep prices high. A console that already makes its manufacturer 40% margin has literally no incentive for prices on content to be high – in fact they actively work to get content as cheap as possible, as free as possible, to create customer demand.
- Shortening the console lifecycle. Apple TV hardware updates yearly, like iPhone and iPad, and it will continue with better graphics, more memory and storage and things like support for 4K resolution output. Shorter cycles do not fit the current console business model where a 5-7 year cycle makes it possible to improve manufacturing yield, decrease production costs, and recoup initial R&D.
How is it different from Ouya or other “micro-consoles”
An Apple TV running apps and games is actually a validation of many of the concepts of “micro-consoles,” like the Ouya, except that it will likely not be as open a platform as most micro-console proponents desire. It will offer developers a much simpler and cheaper path for development and distribution than existing consoles. What truly makes it different is that it would be a unified offering from Apple – Ouya is an Android-based micro-console, so it can bring plenty of Android developers to bear, but it is a custom App Store and a custom product, struggling to get momentum and sales. Apple will have a much easier time selling more Apple TV’s – adding apps and games will increase the value proposition of the current device.
That’s my $0.02. I’m looking forward to developing for an updated Apple TV.