Apple set to make gaming push with updated AppleTV

As usual, consumers and investors alike will be monitoring Apple Inc.’ s Worldwide Developers Conference closely for new products and services.

They shouldn’t expect the tech giant to roll out an Apple-branded television, but we’ll likely see a new version of the AppleTV device that has more memory, improved graphics and touch/speech capabilities.

These improvements, coupled with the AppleTV app store, should allow Apple better access to the US$35 billion for console-gaming software. That could add one per cent to its earnings per share in 2016, based on conservative estimates by J.P. Morgan analyst Rod Hall.

He expects the new AppleTV will feature the same A8X processor featured in the iPad Air 2, which is considered a very capable chip when it comes to gaming.

“Given that the AppleTV will likely be priced significantly less than next generation consoles, we believe it will present an interesting option for casual gamers, particularly given the additional TV streaming features we expect the device to offer,” Hall said in a note to clients.

The rationale for such a push by Apple is obvious, since gamers spend an estimated average of US$150 per year on video game software purchases. Meanwhile, both the total gaming software market and the amount of annual revenue per console have continued to trend higher, with Hall estimating that spending is up about eight per cent since 2012.

The analyst anticipates most AppleTV shipments will be in North America and Europe since better content is available in those regions relative to the rest of the world.

Hall doesn’t expect Apple to launch a streaming TV service at WWDC, but he does anticipate it will arrive before the end of 2015.

The analyst forecasts AppleTV’s penetration will rise to five per cent in 2016, up from about 2.4 per cent at the end of 2014, assuming a TV replacement cycle of seven years.