Nintendo Was Right To Not Make ‘Super Mario Run’ Free-To-Play – Forbes
Despite huge day-one download statistics and a positive reception by gamers and the press, Super Mario Run has not been met with a corresponding stock bump for Nintendo. Indeed, the company’s shares were down 4% at launch, a sign that investors are not happy with the mobile game’s premium pricing.
Analysts at SuperData, meanwhile, have downgraded their expectations for Super Mario Run’s first-month revenue from $60 million to between $12 and $15 million, citing a “prohibitive” always-online requirement. SuperData expects a price cut after the holidays.
EEDAR VP of Insights Patrick Walker notes that the endless runner genre, combined with premium pricing, “will lead to rapid declines in revenue and overall revenues that are lower than other market leaders.” Walker argues that the move minimizes risk for Nintendo, however, since developing a game “designed to make ongoing revenue for many months is challenging and has a much higher chance of complete failure.”
The real point of Super Mario Run and the NES Classic, at least in the short term, argues Walker, is “increasing overall Nintendo brand equity and buzz before the launch of the Switch,” Nintendo’s upcoming console release. Certainly the hype surrounding the retro micro-console and Super Mario Run have put Nintendo in the headlines. And there is no denying that Pokémon Go led to increased sales of Pokémon Sun and Pokémon Moon.
Preserving the Nintendo brand.
This is an important point, but I don’t think it captures the entire essence of what’s going on with Nintendo’s latest mobile release. Super Mario Run isn’t just about building brand awareness for the Switch launch, it’s also about maintaining brand fidelity for the long-term, as Nintendo moves more and more into mobile gaming.
While freemium or free-to-play games can generate more revenue over time than a premium game, they also rely on a very different type of game design to work properly. F2P requires a game to withhold or gate some elements off from gamers, requiring them to either pay real money or spend more time waiting or playing the game. For instance, Nintendo could have sold extra Mario skins for the game, or it could have made players wait after dying or purchase extra lives—a tactic used by Angry Birds 2 that led to me instantly deleting that game.
Freemium done properly can be mostly non-invasive and tolerable, and companies with a great deal of experience in the mobile gaming industry have done it right. The new Plants Vs. Zombies card game from EA and PopCap is a good example of a freemium game that gets it mostly right. Many others do as well. But these are games designed to be free-to-play from the ground up, and brands that can’t be tarnished by a F2P experience since it’s what players expect going in.
Micro-transactions in Mario games might be fine for the casual mobile gamer, but they have the very real chance of damaging Nintendo’s carefully cultivated brand. This might be less of an issue with lesser-known IP like Animal Crossing and Fire Emblem, Nintendo’s next two mobile efforts, but Mario is essentially Nintendo’s mascot. Turning Mario into a F2P revenue scheme would be a huge mistake from a long-term brand perspective, even if Nintendo could generated longer revenue tails.
Even if Nintendo did make a freemium Mario game, it shouldn’t be an endless-runner that evokes Mario’s classic platforming roots. Perhaps Nintendo could get into the competitive card game (CCG) business and have some sort of Hearthstone clone, selling decks in a free-to-play game. Animal Crossing seems fairly well-suited to the freemium model as well. There’s a lot of Nintendo IP to sift through and some should be free-to-play and some should be premium.
Beyond deciding which titles it releases as free-to-play, Nintendo needs to be extremely careful about how it implements freemium content and micro-transactions in these games. It needs to be more cautious than the average gaming company in part because Nintendo makes kids games—and freemium is most pernicious when it targets kids—and because Nintendo has a reputation for quality releases that are polished and complete. Many F2P games feel incomplete unless you pay for content, and the last thing Nintendo needs is to earn a reputation as a company that nickels and dimes gamers.
From the get-go, Nintendo’s move into mobile has been an effort to convert mobile and casual gamers to its more powerful proprietary hardware and premium software. But even if that mission changes over time and Nintendo finds itself relying more and more on mobile revenue, the company should take care to preserve its good name and not rush into the whale-hunting business with reckless abandon, no matter what investors think.