In a meeting with investors during a Financial Results Briefing, Nintendo’s president, Satoru Iwata, provided a glimpse into how his company is considering monetizing its upcoming mobile games, and it all sounded like good news to those afraid that Clash of Mario was going to be popping up on the App Store soon. Iwata was constantly hinting at innovating rather than emulating in the area of monetization models, and that can only be good news for the App Store provided the walk matches the talk.
When asked whether he has any interest in or intention to approach the mobile space through analyzing data trends like monthly active users, average revenue per paid user, etc, Iwata provided an interesting plan that appears to deviate from these standard industry practices. He said that while the company recognizes that those numbers might be important indicators, it also realizes that if Nintendo tries to analyze and emulate successful game applications in order to reproduce their success, all the company will achieve is copying “what is already happening in the market for smart devices." He continued by describing a changing landscape in mobile gaming due to the intense competition in the App Store, which means simply imitating a past formula is not a guarantee of success nor Nintendo’s aspiration.
Further alleviating the fears of those dreading an F2P Mario Kart game (where you run out of energy after every three turns), Iwata said that Nintendo realizes that it can take lessons from some current methods of monetization that have proven to work well on smart devices. However, he added, simply combining existing ways with Nintendo IP can only produce short-term revenue and not the long-lasting results the company desires. What Nintendo really prefers, according to its President, is to receive a small amount of money from a wide range of consumers, but it is at the same time aware that the narrow-and-large model (large amounts from few users) has been outperforming the small-and-wide model. So, Itawa concluded, he’s been challenging Nintendo developers to find ways to “surpass existing hurdles," and while they already have some specific ideas on how to create a sustainable business without going narrow-and-large, he said that Nintendo will announce those ideas in due course. Above all, Iwata reminded his audience, Nintendo has to pay very close attention to how it receives money because it’s a family brand; it doesn’t intend on changing the current situation where parents can give Nintendo products to their children with peace of mind.
So, it appears that Mr. Iwata is talking a good talk about Nintendo’s aims and strategic thinking regarding its mobile business. No hunting for whales, apparently, and no intend on copying other successful models (of the Clash of Clan variety, I believe) because such a move would threaten Nintendo’s branding as “family-friendly" and provide short-term revenue by sacrificing “long-lasting results." I like what I’m hearing from Nintendo so far because Itawa seems to be implying that the company wants to carry the innovation its known for from the realm of gameplay into the realm of monetization strategies. Yet, I’m worried that Nintendo might be in for a rude awakening because Clash of Clans-like games are so successful precisely because of their business model of going for the 1% of paying players rather than going small-and-wide, to use Itawa’s wording. I know Nintendo is claiming to have a long-term interest in the mobile market, but I wonder what might happen in the event the revenue model it’s trying to implement doesn’t bring in the necessary dough. Hopefully, Nintendo will once more do its magic and show the App Store how you innovate. I dread what will happen if it doesn’t.