After years of encouraging Nintendo to get into mobile gaming - often by the rather unsubtle means of darkly predicting the company's doom should it fail to do so - investors and analysts now seem a little underwhelmed by the firm's first official entry into the market, Super Mario Run. It's not that the game hasn't reached a wide audience; App Annie estimates that it's been downloaded 43 million times in four days, which is gigantic by anyone's standards. It's not even really that the game's revenue has disappointed; it's already closing on $20 million, which undoubtedly makes the game comfortably profitable.
The concerns over Super Mario Run, which have driven Nintendo's share price markedly lower since the game's launch, are instead all about pricing - or to be more precise, all about business model. Super Mario Run isn't a free-to- play game. It's free to download (or "free to start", as the company has termed it), and after three levels - which you may replay as often as you like, and which will likely take most players several hours to master - it asks for a $10 in-app purchase to unlock the rest of the game. That structure has provoked an extraordinary backlash.
"The concerns over Super Mario Run...are instead all about pricing - or to be more precise, all about business model"
There are legitimate things to criticise about Super Mario Run - the requirement for an internet connection to play, for example, felt especially egregious to me while sitting on 16 hours of flights back to Europe for Christmas this week - but a glance through the huge volume of negative reviews for the game on the App Store reveals that there's only one thing most people are complaining about: the price. A minority of those complaints are that you can't play enough of the game for free before buying, which is arguable and not unreasonable. A majority, however, contend that $10 for a mobile game is a ridiculous, greedy price.
For an entire swathe of the industry and its consumers who have spent the past half-decade railing against F2P business models for being exploitative and greedy, this backlash against an up-front, "honest" $10 price is little short of jaw-dropping. F2P games, after all, routinely have in-app purchases for bundles of consumable currency or items that cost up to $100; big-spending "whales" in F2P games end up spending thousands of dollars on them. After so many years of reading about, and lamenting, these aspects of the mobile game business, it's easy to see how a lot of people would have come to see the entry of Nintendo's biggest brand with a more traditional, shareware-esque business model as being akin to a glass of ice water in hell. That hell's denizens turn out not to like ice water is simply incomprehensible to them.
I have some sympathy for that perspective, of course; for the amount of entertainment Super Mario Run offers and the obvious quality and care behind its creation, a $10 price point seems very reasonable, after all. $20 million in revenue implies that 2 million consumers thus far have agreed with that, and several million more will likely opt to pay up in the coming weeks and months. However, simply being angry with those who find the $10 price too much, or even exploitative, isn't constructive. It's more helpful to think about why people would come to that conclusion, and if we think that encouraging a diversity of viable business models on mobile is a positive thing (which I believe it is), then it's also useful to think about how that attitude might be changed.
"Simply being angry with those who find the $10 price too much, or even exploitative, isn't constructive"
This all goes back, after all, to exactly the same economic impulse that caused F2P to come to dominate mobile gaming in the first place. F2P didn't arise because companies particularly wanted to move to that model; it came about, in fact, from necessity. The standard model for games in the early years of the App Store was premium, paid up front, but prices fell rapidly under competitive pressure - tending towards zero, until they reached the point where the only way to get consumers to download your game at all was to make it free to download and find new ways to make money later.
Nintendo's pricing scheme for Super Mario Run acknowledges that reality by making the game free to download up front, and only asking for money after the user has had a chance to play the game for a while. What it doesn't acknowledge, though, is that F2P has also changed consumer behaviour and expectations in other ways. As designers have come to grips with the intricacies and possibilities of F2P, a lot of techniques for encouraging consumers to keep playing and keep paying have emerged - many of them, it should be noted, perfectly valid and even beneficial aspects of game design, far from the abusive stereotype that F2P games have attracted in some quarters. One technique that's quite widespread among better and more successful F2P games is the avoidance of sudden paywalls; if a user is having fun in the game, suddenly halting their progress to demand money turns out to be a much less effective and more negative approach than simply letting them continue playing until they find themselves ready and willing to spend money on accessing additional features or possibilities.
The adoption of this approach has created two major effects. Firstly, it has hardened people's reactions against hard paywalls; when so many games allow you to play almost indefinitely without ever demanding money to proceed (instead charging money for a whole host of other, theoretically optional things), a game that says "money now, or get lost" after a certain number of levels does feel unlikeable to a great many consumers. "Likeability", incidentally, is an incredibly important aspect of F2P and mobile game design in general, which isn't necessarily easy for traditional game designers to wrap their heads around. "The game as salesman" requires quite a different paradigm of thinking to "the game as entertainer" or "the game as challenge."
What Super Mario Run feels even less likeable, of course, if it comes as a surprise - and consumer feedback strongly suggests that neither Nintendo's marketing nor Apple's listing of Super Mario Run effectively conveyed the nature of the business model to players. If Nintendo is serious about this business model, and Apple is serious about promoting it as an alternative to F2P, both companies need to try harder to make sure consumers are on board from the outset, rather than just springing a $10 IAP on someone who feels like they've barely started to explore the game.
"It may even be that Nintendo has bitten off more than it can chew here; some of its investors, it seems, certainly think so"
The second effect of this approach of avoiding hard paywalls is perhaps even more difficult to overcome; it's created a whole class of players who simply don't pay money for mobile games. A great many of those arguing vehemently that Super Mario Run is exploitatively expensive do spend their time playing games that have $50 and $100 IAP packages, but that's not the point, because they don't buy them. In fact, they don't buy anything; they're the players who never spend money on games, who wait out for the lengthy construction times, who don't bother refilling their boosts and who let the energy bar recharge over time rather than spending coins on it. They're the players for whom "free to play" isn't actually a lie; they play games, often for months or even years at a time, without ever spending any money. For them, Super Mario Run is quite genuinely overpriced, because for them, mobile games are generally free. Full of friction, often frustrating; but free.
We could, of course, argue about the value of these consumers to the industry; I know a lot of people coming from traditional games backgrounds consider them to be no better than pirates in many regards. The F2P market, on the other hand, essentially sees these people as an investment; many of them will grow up and become busier, less willing to spend huge amounts of time on games, but still keen to play, and the usual trade-off of F2P - spending money to avoid spending time - will make more sense to them. Thus it's become accepted wisdom within F2P that it's perfectly okay for players to keep enjoying your game forever without paying any money, on the basis that eventually, many of them will spend money - whereas if you kicked them out earlier in the process, they'd never spend anything. Nintendo hasn't accepted that wisdom; there's more replayability in the first three levels of Super Mario Run than many people give credit for, but it remains essentially a short demo with a hard paywall afterwards. A lot of the players who hit that paywall will bounce off it and never come back.
You can lament that or be angry about it if you want, but it's a reality of how the market works, and if Nintendo did its homework on this market at all, it's also something the company will have expected. It must have known that Super Mario Run, in ignoring almost everything mobile developers have learned about business models in recent years, was going to alienate a huge group of players who simply don't engage with games in this way. In the process, it has hopefully also delighted a group of players who find F2P stifling - that's what market diversity is all about, after all - but this backlash was utterly inevitable.
The real question is whether the experiment has been enough of a success for Nintendo to press forward with trying to carve out this "free-to- start" premium corner of the mobile market. This has always been an enormous challenge; anyone who thought that the Mario brand was going to allow the company to overturn years of F2P dominance, consumer behaviour and market conditioning was sorely misguided. It may even be that Nintendo has bitten off more than it can chew here; some of its investors, it seems, certainly think so. Slamming the consumers who dislike Super Mario Run's paywall, though, is deeply unfair. Value perceptions are relative, and Nintendo just walked into a well-established market and ignored its common practices.
I hope their gambit works, because mobile could do with an outlet for premium, paid up front experiences, but this was never going to be a universally popular move. F2P didn't succeed because it was the only option; it succeeded because it was the option most consumers preferred, and changing that preference is a task that will take years, not days, even with the world's favourite plumber in your corner.