Apple Tops 1.5 Billion Paid Subscribers, but Gaming Slump Hits Services Revenue

Apple has revealed that its services business has surpassed 1.5 billion paid subscriptions, a major milestone for the company. However, despite the record subscriber count, the segment was the only weak spot in an otherwise strong financial quarter.

During its fiscal third-quarter earnings, Apple reported $30.74 billion in services revenue, missing Wall Street expectations of $31.22 billion. The weaker-than-expected performance, combined with softer sales in China, sent Apple's stock down more than 4% in after-hours trading.

Apple Blames Gaming Slowdown for Weaker App Store Growth

Speaking during the company's earnings call, Apple Chief Financial Officer Kevan Parekh said several factors affected services revenue, with one of the biggest being slower spending on mobile games through the App Store.

"One factor contributing to the App Store's performance in the quarter was a slowdown in mobile gaming," Parekh said.

Mobile games have long been one of the App Store's largest sources of revenue through in-app purchases, making any slowdown particularly noticeable for Apple's services business.