Freemium unlocks are dead. Dead dead dead. Nintendo just proved why they do not work, in one stunning example. The Wall Street Journal‘s Takashi Mochizuki reports on a Nintendo earnings call that Super Mario Run (Free) has gotten 150 million downloads, but Fire Emblem Heroes (Free) has brought in more revenue on less than 10% of the downloads. That’s right, folks, we live in a reality where a Fire Emblem game can out-perform a Mario game. Nintendo says that their goal was for 10% of Super Mario Run players to pay for the game, but they haven’t reached that yet.
The lesson is here is that the freemium business model doesn’t work. It combines the two biggest downsides of trying to sell mobile games: the limited revenue generation of a one-time game purchase, and the paid-user conversion struggle of free-to-play. When not even Nintendo, with a brand-new Mario game on mobile, can struggle with revenue generation to the point where a Fire Emblem game is making more money, it should be clear to everyone who participates in the mobile games industry: stop making freemium games. For readers, I know this is rough since it’s a very consumer-friendly business model. But unfortunately, it just does not work that well. Not for tiny indies trying to make it in the market, and not for Nintendo with a freaking Mario game.