Is It 'Game On' for Apple?

Apple (Nasdaq: AAPL) has apparently recruited one of Microsoft's (Nasdaq: MSFT) top Xbox execs: Richard Teversham, Redmond's senior director of business, insights and strategy for Xbox in Europe.

Both Microsoft and Apple have been tight-lipped about the 15-year Microsoft veteran's move to Apple; however, Apple has acknowledged that Teversham will assume an "education-based" role at the company.

Microsoft, for its part, says only it is looking to fill Teversham's position.

The tech and gaming industry is buzzing with speculation over what the defection means. Focuses of discussion range from Microsoft's diminishing role as a top job destination for talented executives to what this means for Apple's gaming strategy.

Third Round

Leaving aside for the moment Apple's possible goals for a broad gaming strategy or platform, Teversham's departure has serious implications for Microsoft, said Stephen Smith, a partner with law firm Greenberg Glusker, which represents Gameloft.

"He is not the first top executive to leave Microsoft; the company, in fact, is bleeding talent right now," Smith told MacNewsWorld.

This may be more a reflection of Microsoft's maturity -- if not entrenchment -- in the established IT community, he added.

"Really good creative IT people go where the excitement is -- recession or no," said Smith.

Google (Nasdaq: GOOG) is also experiencing a mini wave of departures, he added -- although this is Google's first round of steady resignations, whereas Microsoft has been through such cycles many times before.

Whither Apple?

Given that context, it becomes doubly interesting that Teversham should jump ship to Apple, which has yet to make a full-fledged assault on the lucrative video game sector.

"Gaming has been a remarkably resilient category despite the downturn," Kurt Scherf, VP and principal analyst at Parks Associates, told MacNewsWorld. "If I were Apple, my thoughts would definitely be turning to grabbing a larger piece of low-hanging revenue in this area."

Still, it is difficult to guess how Apple wants to proceed, based on Teversham's move alone, said Scherf.

The iPhone has thousands of gaming apps, he noted. Indeed, Apple "has transformed the way the gaming industry is earnings its profits."

Educational games, in particular, are a burgeoning category, and if Apple were to target it, it would want someone of Teversham's caliber overseeing the operations, Scherf mused. "No matter what it is, though, it surely will be helpful to have someone who has strong relationships with the game producers themselves."

No Console

All of these possibilities focus on Apple's iPhone and Mac products. Apple TV might be another possibility, although it has not gotten the kind of traction that many had expected, Venkat Venkatraman, a business professor at Boston University, told MacNewsWorld.

It's highly unlikely that Apple is angling to take on Sony (NYSE: SNE) or Microsoft with a game console. Rather, Venkatraman said, Apple will "seek to position [itself] at the interface of TV and video games using multi-touch as the interface and differentiate against Nintendo Wii."

There are a number of reasons why this makes sense for Apple, he continued.

First, it is clear that games are an important, vibrant category of applications for Apple's iPhone, and consumers may have an appetite to play those games with a larger screen, he said.

Also, "Wii has redefined video gaming with television as a key part of in-home gaming, and it is logical that Apple [would] figure out a way to be part of the ecosystem," added Venkatraman.

Finally, Apple may be introducing some form of netbook that could be used for many purposes, he pointed out, including playing and controlling video games.

Teversham's appointment is unlikely to be the last signal Apple sends out on whatever gaming strategy it has up its sleeve.

"It will be worth watching what other moves they make in this space in the coming weeks and months," Venkatraman said.