WWDC Innovations Suggest Big Video Game Push Ahead

Apple (AAPL) got many Mac gamers excited when it showed off the capabilities of its latest M2 chip. With some triple A titles, including Resident Evil: Village and No Man’s Sky Coming to the Mac later this year, the Mac may be poised to challenge today’s spec gaming PCs.

Now the Mac has avoided video games for most of its history. However, recent hardware advancements and Apple’s broader gaming push (think Apple Arcade service) could pave the way for a bigger move into one of the fastest growing consumer markets.

Undoubtedly, gaming has become more important than video streaming and music combined. Apple is an established player in music, with its flagship Apple Music service, while its Apple TV+ video streaming service is starting to gain momentum. Apple Arcade, Apple’s mobile-centric gaming service, has had some success, but not to the extent of rivals including Microsoft (MSFT), which has become a gaming juggernaut.

Now that the latest and greatest Macs are catching up in terms of graphics capabilities, Apple may be ready to introduce bigger budget titles to Apple Arcade designed to be played on Mac or Apple TV.

The MetalFX upscaling technology showcased at WWDC 2022 was impressive and could mark the start of an initiative to win the hearts of gamers, many of whom have stuck with PCs and consoles for decades.

Macs aren’t exactly a type of computer known for their gaming capabilities. With M2 and MetalFX, that could change, especially if Apple looks to compete with Microsoft’s Xbox Game Pass subscription with Apple Arcade.

It’s hard not to be excited about Apple’s hardware and gaming performance after WWDC 2022. I remain bullish on the title.

On TipRanks, AAPL scores 9 out of 10 on the Smart Score Spectrum. This indicates high potential for the stock to outperform the broader market.

Can Apple Arcade improve the gaming market?

Apple has been a mobile gaming powerhouse for many years. The Apple Arcade service is the best of its kind. Although Netflix (NFLX) could evolve into a worthy contender as it seeks to offer mobile games to prevent its existing subscriber base from canceling their subscriptions.

Still, Apple needs to go beyond mobile to make a smooth transition to the metaverse. Indeed, it is no secret that Apple is working on a virtual or augmented reality headset. It may be closer than many of us think. The biggest draw to these next-gen mixed reality technologies is gaming. Gaming may very well be the on-ramp that entices users to make the initial purchase.

As Apple looks to new frontiers, it must go beyond mobile gaming, and bringing triple-A titles to the Mac is a great first start. Eventually, Apple Arcade could expand to include Mac-exclusive titles and possibly headset-exclusive augmented reality experiences.

Resident Evil and No Man’s Sky are older triple-A games that have been around for a while now. Two older games coming to the Mac are unlikely to entice a gamer to buy a Mac over a gaming PC. That said, the two games built for Apple’s M2 chip might just be the start of what’s coming.

Going forward, Apple will need to entice game developers to unleash the power of its M-series chips. If it can, Mac could very well catch up to PCs on the gaming front.

Laying the groundwork for AR headset games?

Apple laid a good foundation for developers when it changed the world with the first iPhone. It is this foundation that has helped the company build an amazing ecosystem that users have struggled to leave. Undoubtedly, mobile gaming was just one of the iPhone’s many major draws. These days, iPhones do so much more.

As Apple seeks to unveil its biggest hardware innovation in years, it needs a similar foundation to allow developers to easily build apps and gaming experiences. Arguably, augmented worlds will be much more focused on games than mobile phones.

The Taking of Wall Street

According to TipRanks analyst rating consensus, AAPL stock is a Strong Buy. Out of 27 analyst ratings, there are 21 buy recommendations and six hold recommendations.

Apple’s average price target is $186.33, implying a 37.14% upside. Analyst price targets range from a low of $157.00 per share to a high of $210.00 per share.

The basics of Apple stocks

With the progress of the game in WWDC 2022 (M2 and MetalFX), I think Apple is ready to step up the game so that its headset can be as successful as the iPhone.

Indeed, Apple has a lot of catching up to do in non-mobile gaming to catch up with Microsoft, which is also eager to break into the metaverse. Either way, Apple is on the right track after WWDC 2022, and it will be interesting to see how the company can scale its Apple Arcade subscription to compete against rivals like Netflix and Microsoft.

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