According to proponents of this myth, Apple's recent recruiting for video game developers means that the company is planning a big new push into video games for the Mac, the iPod, and possibly a brand new gaming console from Apple. They're wrong, here's why.
  
Why the Myth was Woven
This myth is of the wishful thinking type, and represents rather innocuous, hopeful speculation. There's nothing wrong with that; video games are fun and popular. The video game hardware market is huge, and video game development now bigger than the movie industry. Why wouldn't Apple want in on that action?
 
The Myth Weavers
Reports of "C/C++ coders with a gaming background" being recruited for a "super secret project" within Apple first appeared at GameSpot. The site reported the idea, appropriately, as a rumor, and investigated it quite impressively. The news spread to other rumor sites, who either just republished it verbatim, or added embellishments like speculation about new iPod video games.
 
Why is Apple hiring game developers? To find out, take a look how Apple fits in with the video game industry's three basic markets: general game software, serious PC gaming, and video game consoles.
 
General Game Software
General game software exists for all sorts of platforms, from cell phones to the Palm. Games were a killer app on the first home computers. Today, there are lots of general video games for the Mac, and even a few built into the iPod. Apple supports developers building Mac games because they are fun to show off, and the availability of games makes the platform more attractive. However, while video games are an important marketing focus for Apple, there are lots of market segments with far more attractive, low hanging fruit for Apple to target with the Mac:
 
  1. home consumers looking for iLife simplicity,
  2. high end audio, video, film, and print production,
  3. business looking for easy to administer computers,
  4. schools, students, and academia.
 
As for the iPod, current models only play a few basic games. Apple has not developed any new iPod games, and apparently they don't want any to crop up. If Apple opened up the iPod's API, games would write themselves.
 
Would consumers buy or play iPod games? Given the iPod's hardware limitations, games would have about as much variety as the Atari 2600, where there was more action in the photo on the game's box than in the game, and many games were the same thing repackaged over again, simply displayed using different colored squares. Ah, simpler times.
 
Apple would have to dramatically morph the iPod into something more akin to the Sony PSP in order to make iPod games something worth playing outside of being stuck in a broken elevator. That would require far more than the hiring of a few game developers.
 
I have some ideas about what I'd like to see in a coming iPod, but I don't think Apple is planning an all out assault with a PSP-killer iPod just yet. If they are, it would have little relation to the recent recruiting, because the jobs are in the wrong field.
 
That bit of market reality helps define the significant gap between general game software and...
 
Serious PC Gaming
Why isn't Apple mounting a major offensive in video gaming? Serious PC gaming is a huge market, but competing in it requires a lot of things Apple doesn't have. It demands rapid, focused development in gaming API support, and support for a broad range of hardware. Apple can't afford to invest heavily in either.
 
They are already fully occupied with developing Mac OS X and various applications, as well as managing the rollout of the new Intel Macs and the expanding iPod family. Also, Apple doesn't desperately need new growth markets; it would just stretch them too thin. More significantly, it would also be a David and Goliath struggle against Microsoft, who owns the serious PC gaming market and fiercely guards it, for reasons I'll get to later.
 
Video Game Consoles: the Disposable Platform
The third market for video games is in video game consoles, units which are designed specifically to play games. In this market, competition demands delivery of the best hardware possible at the cheapest cost. They make up for their losses through proprietary games licensing.
 
This requires huge investment, because consoles are basically a disposable platform. The unit design has to stay attractive to developers and players over its few years of life, while its software platform must hit the ground running on day one with enough games, then remain competitive and interesting for those few years, before inevitably being thrown away to make room for the next generation.
 
In the world of consoles there is the upcoming Nintendo Revolution, recently given the horrible new name Wii; the Sony PlayStation 2, with the PS 3 on the way; and Microsoft's Xbox 360. Entering battle as a number four player would be insane. Game consoles are a tough business. Analysts estimate that Microsoft loses over $100 per Xbox sold. Why do they keep throwing billions at the Xbox?
 
Because PC sales have matured and Microsoft has found little success in new markets. Hardware devices like Windows Mobile PDAs and Tablet PCs have been a disappointing failure, as have WMA music players, as have attempts to move into set top boxes, with WebTV, UltimateTV, and MSN TV.  
 
The major reasons people buy Windows PCs are desktop applications, servers, and PC gaming, but the desktop and server markets are fairly tapped out. Windows' monopoly is under increasing attack from Linux, and there's little room for aggressive growth into new markets for those products, because everyone already has a PC. There's not a huge installed base of UNIX workstations, minis, mainframes and terminals around anymore, nor is anyone still doing their business on paper, so Microsoft now sits on mature market where all they can do is replace worn out PCs.
 
On top of that, PC prices are falling and the pace of upgrades are stagnating; who needs a much faster PC to run the same old Office applications? Old PCs are generally getting replaced with cheaper PCs. That leaves Microsoft with a PC marketplace of price sensitive corporate Office drones, WalMart consumers, and the emerging overseas markets, all of whom just want to buy cheap PCs. As the price of PCs is pushed lower, the cost of Windows begins to stick out significantly, and options like Linux start to look favorable to consumers.
 
PC gaming, however, is a different ball of wax. Within this market, there is an insatiable demand for better, faster PCs, and consumers are willing to pay thousands of dollars for PC hardware and upgrades like high end video cards and fancy surround sound. If Microsoft allows Windows-based PC gaming to be eclipsed by a new generation of consoles, or obsolesced by cross platform, open technologies, they lose a prime chunk of the Windows installed base: the users who spend money frivolously.
 
So Microsoft has to invest in defending video games on Windows. They have to own or control enough of the gaming market to ensure game developers don't start a wholesale shift to consoles, or to Linux, or cross platform. Microsoft has gone on the offensive by developing DirectX, a set of proprietary technologies that tie video games to Windows; through buying up video game development houses like Bungie and Rare; and, ironically enough, by building a console of their own.
 
The Rough and Tumble Console Market
Apple's only experience in video game consoles involved the 1995 Pippin reference design, which was part of the company's efforts to develop a licensed Mac clone market. Basically, Pippin was a low end Power Mac that couldn't run Mac software. After a lukewarm reception, Apple abandoned the console market to concentrate on their other failures. Microsoft's video game strategy at the time focused on getting DOS games ported to Windows 95, using their new DirectX software.
 
As Microsoft worked to develop Windows as a gaming platform, sales of the Sony Playstation took off and blew past anyone's expectations. To get a foothold into console development, Microsoft started work with Sega to use WinCE in the Dreamcast. At the same time, Microsoft began development of their own console, the Xbox, based on a simplified Windows 2000 PC design and leveraging their existing work on DirectX.
 
While the Dreamcast failed to take off, sales of Sony's Playstation 2 exceeded those of the original. Microsoft released their new Xbox console to battle Sony directly in the console market, and Nintendo, the previous leader in console games, saw their cheaper GameCube slip into third place, closely behind Microsoft.
 
Microsoft invested billions just to participate in the console game market; Sega dropped out of the console market entirely; and Nintendo lost its leadership after years of success in the industry. Clearly, console video games are a tough business.
 
Competition is getting more intense as the next generation of consoles arrive. Microsoft beat Nintendo and Sony to market with their Xbox 360, but are still hemorrhaging money. Sony is desperate to retain its control on console gaming, and Nintendo is planning a revival by targeting markets outside of the usual gamer audience. There's no easy money to be made in console gaming; in particular, not for an inexperienced player like Apple.
 
Unraveled with Extreme Prejudice
Apple has improved support for video games in Mac OS X, ditching their internal efforts with QuickDraw 3D in order to focus on the industry standard OpenGL. Industry standard, that is, outside of Microsoft, which has snubbed OpenGL in order to retain their control of gaming via DirectX. Apple still has a ways to go with OpenGL and gaming, but that isn't why Apple is looking for game developers.
 
Experts in video games are also experts in dedicated graphics processors. Increasingly, everything Apple does on the Mac is related to Core Video and Core Image, the familiar graphics plugins represented with logos that look like a Pac Mac gagging on a translucent billiard ball. Both farm out processing tasks to the specialized processors found in graphics cards, just as video games do. Every Mac OS X window is displayed and layered using technologies borrowed from the video game world.
 
From Mac OS X's Exposé and Dashboard ripples, to Final Cut, Motion, Shake, Aperture, down to the effect filters in PhotoBooth, Apple is making increasing use of Quartz to differentiate their platform and applications, and make it easier for their developers to put the same high performance graphic tools to use in new ways. Apple is hiring video game developers because of their expertise in OpenGL GPU development, not because of a secret video games initiative.
 
If I'm wrong, as an act of penance, I'll buy the new video games and play them for days.
 
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Saturday, June 17, 2006
The Apple Video Game Development Myth

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