September 27, 2023

s16e03: It's the Unique Integration of the Hardware, the Silicon, and the Software, Stupid

0.0 Context Setting

Wednesday, 27 September, 2023 in Portland Oregon and it is not raining right now.

Thank you everyone who has sent a note -- I will be replying soon and totally not feeling guilty at all about not having replied yet.

Today's typing was a bit slower (about an hour to write, so only 33 words a minute!) and on the long side -- around 2,000 words again. The ones where I'm looking things up and sticking in footnotes tend to take a bit longer.

One thing today, so I'll get out of your way.

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1.0 Some Things That Caught My Attention

1.1 It's the Unique Integration of the Hardware, the Silicon, and the Software, Stupid

So here's a thing I think I figured out about Apple's (new!) games strategy, and I'm pretty sure it means I get to pat myself on the back for suspecting it might happen earlier on.

Capcom's Resident Evil 4 (2023) is a remake of Resident Evil 4 (2005), remakes and remasters the videogame industry's equivalent of Disney's live-action remakes in the vein of "how do we make and hopefully reduce risk through the strategy of using existing popular intellectual property in these turbulent economic times?" It has been, by all accounts, been received incredibly well¹.

It's also an example of a triple-A game, or if not, as close to one as you can get that's also based on existing intellectual property.

Resident Evil 4 (2023) is atypical in that it's a triple-A game that's receiving a release (or is expected to release) in the same calendar year on the Mac, mainly because the Mac game market is a rounding error no matter how much anyone might like to tell you otherwise.

This isn't to ignore the value that the people in that rounding area get out of playing games. It's just that in terms of a publisher or developer thinking about "where should I put my resources into developing, QAing and publishing a game", "on the Mac" is in distinct third place after consoles and PC. And even in consoles, Sony and Microsoft executives will contort themselves into describing exactly what the videogame market is (or sub-markets) and who's in what position². For example: does Nintendo even count?!

I am digressing.

There's two parts here. One is that the iPhone 15 Pro, the one with an A17 Pro chip, is being touted by Apple as offering console-class gaming more accurately, and in Apple's style, that the iPhone 15 Pro is "the best game console"³, including features like hardware-accelerated raytracing. Some people agree! ⁴

Leaving aside A17 Pro's GPU capability, the argument Apple's making here is the same one, broadly, that people make about cameras: the best camera is the one that's with you.

It's not a bad argument, and you could certainly make an argument for it in terms of the Nintendo Switch, which has sold more units than that generation's PS4 and Xbox One.

So. First thing, the A17 Pro has a GPU that's good enough to play a game that's also being released for the PS4. (That is not a dig).

The second thing is that Resident Evil (2023) is going to cost $60 on the iPhone 15 Pro, same as the list price for the PS5 and Xbox Series S|X versions⁵.

This second thing points to two more things:

• This is an "iPhone game" or "mobile game" that is being put in the same price category as a "traditional console or PC game". It is not a cheap game. It's not even $30. It's parity with a current-generation console game, which went up to $10 to $60 with the launch of the PS5 and Xbox Series S|X.
• But you don't just get "the iPhone game". Resident Evil 4 (2023) is a universal purchase, which means you buy it once and you get to run it on that Apple account's entire family of supported devices. Buy it on your iPhone 15 Pro, you get it on your Macbook Air M1, too.

A while back I thought that moving to Apple Silicon would be a big deal for videogames because in the long-term, it means the unifying of the iOS and Mac gaming market. The Mac gaming market is, like I said, a rounding error compared to the iOS gaming market.

And just like how humans aren't great at number when they get very very big, let me make it a bit easier.

• Since launch last year, analysts reckon the iPhone 14 Pro and iPhone 14 Pro Max have sold a combined 47.5 million units[^iphone14].
• The PS5 hit 40 million units in July this year, after its launch in November 2020⁶. The Xbox Series S|X in comparison shipped 21 million units⁷.
• The Switch has lifetime sales of 129.5 million units, and for their financial year ending in 2023, the Switch sold nearly 18 million units, and that's for a system that launched in 2017.

This is to be expected. Ever since mobile games became a thing, people have pointed out that their market is stupendously big because, well, more people are interested in, get more value from, and buy multi-purpose smartphones than broadly single-purpose, fixed-location videogame consoles (aside, again from Nintendo, who are off doing their own thing).

You could (and should have) probably drawn a line at some point extrapolating that while phones won't reach the same performance as a fixed-location console thanks to power budgets, how long would it take for them to reach, say, the performance of the current generation-1?

For Apple, that means at what point would the power/performance of an iPhone meet the demand of what they'd see as "console class" (or, because Apple, "the best console") games. With the launch of the M1 series of Apple Silicon (and even before that, when it was clear the A-series SoCs were performing quite unreasonably and rudely in terms of single-thread performance against desktop-class CPUs), that should've been on the time horizon in the "definitely under 10 years" bucket.

While it doesn't make sense for Apple to invest much in the Mac as a videogame platform (other than to demonstrate that it isn't entirely dead), it makes much more sense to invest in iOS as a videogame platform and for iOS to expand into the traditional console/PC videogame market. Where else is the growth going to be?

And then, when you've got unified silicon, Apple Silicon Macs can inherit and benefit from the size of the iOS market.

Publishers wouldn't care about bringing their console and PC games to the Mac because the market's too small. But show them the new Pro-class videogame market that's opened up on Apple's platforms? Then I imagine interests starts to change.

There's also two routes here: what normally happens with the Pro-class is that their silicon and features trickle down over time so Apple can squeeze as much as possible out of their silicon. There's a good chance next year's iPhone 15 Non-Pro, presumably running on an A18 Regular, will inherit some or all of the A17 Pro's GPU capability, including hardware raytracing, while the A18 Pro starts down a further more-performant, more GPU cores route with that generation of design.

Or, maybe not. Maybe Apple decides to segment the mobile Pro SoCs and M-class CPU laptops and desktops into the console-class videogames.

From this perspective, Apple's Game Porting Toolkit makes a lot more sense. It's not for the minimal uplift and slightly-to-a-lot-less-work to port a Windows game to the Mac. It's actually, long-term, for porting Windows and console-class games to Apple Silicon, period. Which will include phones. Because that's what Capcom have done with, presumably, the fork of the RE Engine used for the remake⁹.

OK, so thinking aloud, all the above is a path forward for Apple to grow its App Store revenue into a new market and increase the differentiation of its phones.

Now I need to think about all the reasons why that strategy might not work.

For one, touch-only, screen-based phones and iPads are terrible for games because of the restriction, broadly, in control methods. Like Apple says, you should design things for their destination medium. Direct manipulation touch applications don't "just work" on a Mac (or, even if they do, they don't work on a Mac) and vice versa for mouse/trackpad/keyboard on iOS. No, you end up needing a dedicated controller or accessory if you really want to replicate console-class gaming.

(Counterpoint: but do you? Will it turn out that just the availability and closeness to hand will be good enough? The camera argument says yes, but the Switch, and Steam Deck in particular, say no, given the latter's attention to detail in terms of providing non-irritating control and input methods for games designed for a keyboard, mouse, and sitting down at a PC).

Second, it still might be too much work to port games. It's never going to be no work to port games to Apple Silicon and Metal. But, technically, Unreal and Unity do support Metal, nevermind if the latter's use completely plummets thanks to the spectacular destruction of trust overseen by John Riccitello. And I don't know how Apple's platform qualification / store approval process compares with Nintendo, Microsoft and Sony's QA and approval process, whether it's worse, slightly better, or I suspect "the same but just different", along the "great, now we have n+1 standards" problem.

Third, everyone in games has been burned by Apple before. Apple keep saying things and keep pretending like they have an interesting and relevant games strategy (Apple Arcade!) and then it turns out not to be, because Apple historically have never gotten gaming and never cared at a leadership level. It's clear that Apple cares about Apple first, from being bloody-minded about deprecating APIs, to being bloody-minded about their own APIs and hardware.

But broadly, I think I'm bullish and optimistic. I would like to be optimistic! I think the incentives are different this time around -- what caught my attention about today's pricing announcement is that it's a very clear signal to the videogames industry that Apple, for some reason, isn't taking applying its usual stupendous race-to-the-bottom undercutting strategy of fundamentally changing how software is priced and valued. In my opinion, this is a super strong signal. Combine that with doing the maths on the total addressable market and you've got something very interesting, even if it's not compelling, going on. Remember: the kind of people who buy Pro-class phones are the kind of customer you want. They spend more money.

As an aside, the chances of Apple TV becoming a stealth console have just very, very slightly increased again. Which would only be Apple's second attempt at a living-room videogame device¹⁰. (For that to happen, there'd need to be an SKU of the Apple TV using the A17 Pro, or a non-pro, equally performant successor. The current Apple TV 4K uses an A15¹¹, supposedly a sibling of the M2, launched in 2021, two generations ago. In that case, perhaps expect an Apple TV 4K (8K?) Fifth Generation in 2-3 years, potentially with a catalogue including the last 2-3 years worth of console-class games on A17 Pro and later silicon, or M-class equivalent with 8GB RAM or more, and potentially a different class of RAM -- you'd need more, and the current Xbox and PS5 have dedicated graphics memory bandwidth on the order of a magnitude more).

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Okay, that's a lot! It was very Apple today, but that's what caught my attention in the moment.

It isn't raining right now. How are you doing?

Best,

Dan