Apple Inc. (NASDAQ:AAPL) new gaming service will run more than 100 games across iOS, macOS, and tvOS devices

Apple Inc. (NASDAQ:AAPL) new gaming service will run more than 100 games across iOS, macOS, and tvOS devices

Apple Inc. (NASDAQ:AAPL) new gaming service will run more than 100 games across iOS, macOS, and tvOS devices

Apple (NASDAQ:AAPL) recently introduced Apple Arcade, a subscription gaming service that will arrive this fall. The platform will feature a library of over 100 games, including exclusive titles from SimCity creator Will Wright and Final Fantasy creator Hironobu Sakaguchi. It will be available in over 150 countries and the games will be playable without a constant internet connection. None of the games will feature ads or microtransactions in which players pay for add-ons.

Apple is helping fund development of the platform’s exclusive games, which can be accessed from iOS, macOS, and tvOS devices via an iCloud account. Players can save their progress on one device and continue playing on another one if a file is backed up to the cloud. Apple hasn’t announced the price yet.

Apple’s introduction of a subscription gaming service wasn’t surprising since multiple reports earlier this year hinted at its arrival. But can the company turn Apple Arcade into a serious contender in the increasingly crowded market for subscription gaming services?

What’s Apple’s strategy?

Apple unveiled Apple Arcade alongside its streaming video service, Apple TV+, a new version of Apple News, and its Apple Card credit card (linked to Apple Pay) at a media event on March 25. These services are all aimed at boosting Apple’s services revenue, which rose 19% annually, to $10.9 billion last quarter, and accounted for 13% of its top line. The segment’s primary growth drivers included the App Store (including App Store ads), Apple Pay, cloud services, Apple Care, iTunes, and Apple Music, which serves over 50 million paid subscribers.

Apple needs to grow its services revenue to reduce its dependence on the iPhone, which generated 62% of its sales last quarter. iPhone sales tumbled 15% annually during the quarter thanks in part to tough competition in China and the cannibalization of higher-end iPhones by lower-end ones.

Morgan Stanley analyst Katy Huberty (via Apple Insider) believes that Apple can grow its services revenue from $37.2 billion in 2018 to over $100 billion by 2023. Huberty reportedly wrote that the introduction of new services to Apple’s ecosystem will boost annual spending per user from $120 today to $220 by 2023.

But will the business be profitable?

Apple Arcade could help Apple expand its ecosystem and boost its service revenues, but profitability could be tough and rival services are cheap. EA’s Origin Access costs $30 per year and Xbox Game Pass costs $10 per month. Apple will likely fund the development of some games and split its subscription revenues with developers, so it could be tough to turn a profit.

However, the growth of higher-margin services (like the App Store) could offset those costs. After all, Apple’s cost of sales for its services segment rose only 6% annually last quarter and accounted for 8% of its total cost of sales, which indicates that its services costs aren’t spiraling out of control.

Apple Arcade might not become a hit product or a major profit driver on its own, but it could tighten Apple’s grip on its customers and keep them locked into its walled garden.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 179.63.

The projected upper bound is: 198.45.

The projected lower bound is: 182.85.

The projected closing price is: 190.65.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 38.8181. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.04. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 4 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 53. This is not a topping or bottoming area. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 1.230 at 189.950. Volume was 35% below average (neutral) and Bollinger Bands were 8% narrower than normal.

Open High Low Close Volume___
189.830 190.080 188.540 189.950 23,563,960

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 189.15 173.70 190.56
Volatility: 29 29 39
Volume: 35,018,188 29,384,740 33,634,676

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC is currently 0.3% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 44 periods.

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