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Today, the Mac has a limited number of games compared to the Windows platform. Many titles are published months after the Windows version debuts, if they become available for the Mac at all. To make matters worse, many users cannot buy Mac software locally.

Why should this concern Apple (aside from the fact that games are a six billion per year industry)? There are two reasons. Games are the major sales driver of high end hardware, and the lack thereof is one of the major reason most PC users won’t become “switchers”. Is there anything Apple can do about this?

A Proposal

Apple should create a game division to produce original Mac games and port Windows games to the Mac. I’m not talking about Tetris clones; I mean top flight commercial games. Apple should produce or port ten to twenty games per year, and make them available as a free download for all Mac users.

The question is how much would this cost? The answer: less than you’d think. Most commercial video games cost five to ten million dollars to develop  (although that can be as high as 20 - 30 million). Therefore ten to twenty games would cost between fifty and two hundred million dollars per year. Porting an existing PC title costs only 15 - 20%  of that.

How would Apple pay for developing all these games? The easiest way is to pass the cost onto the consumer. Since Apple sells almost three million Macs  per year, adding fifty dollars (the cost of a single game) to the price of each Mac would generate an additional 100 million in net revenue per year. This is enough to port ten to fifteen PC titles and two or three Mac only games.

Benefits to Apple and Mac users

Many Windows users feel that Macs are simply too expensive. Getting $500 to $1000 worth of free games per year makes the Mac a much better value proposition, without sacrificing the margins Apple needs to retain to finance Research and Development for the platform.

Even hardcore gamers will have to take a serious look at the Mac when purchasing a new system. If they decide to switch, those gamers are going to buy high margin G5’s with upgraded graphics cards. This should lead to a small increase in Market share for Apple.

Why Apple is uniquely positioned to do this

The combination of small market share and Apple’s control of the platform makes Apple the only platform where this plan is financially feasible. According to this article , the

“break-even point on a (Mac) title is 7,000 units. A good Mac title for us sells about 30,000 units worldwide. One hundred thousand units is our theoretical guess at a ceiling for a Mac game. The Sims on the Mac may hit this point."

Let’s assume a fifty dollar retail price, and do the math. A “break-even Mac title” produces $350,000 in gross revenue. “A good Mac title” produces 1.5 million in gross revenue. The theoretical ceiling is five million in gross revenue.

Even if it cost Apple five million for each game (the theoretical ceiling), the $50 per unit price increase for each Mac generates enough revenue to cover the cost of producing twenty titles for the Mac each year.

This is a win-win for both Apple and the game publishers. The game publishers would receive maximum value for their Mac ports, with very little (if any) cannibalization of their Windows sales. You only get the free game if you have a Mac. If you use a PC, you’ll have to pay for a copy.

Linux distributors couldn’t make a similar deal, because it would destroy the sales of the Windows version (it runs on the same hardware). Microsoft couldn’t make a similar deal since the sheer size of the PC market would make the cost prohibitive (the cost of Windows would increase dramatically). Large PC OEMs such as Dell couldn’t do it either since it would be difficult to restrict the game from running on non-Dell PCs.

The worst thing that could happen is that Apple’s market share would increase to the point where such a deal is no longer economically feasible.