Nintendo is looking to increase the profitability of its mobile games after the disappointing financial performance of Animal Crossing: Pocket Camp (Free) and lackluster standing compared to the Nintendo Switch and 3DS business. Mobile games brought in 29.1 billion yen in income in 2017, but this was compared to 170 billion yen for the 3DS and 595 billion yen from the Nintendo Switch. Japanese Nintendo translated an interview with Nintendo President Tatsumi Kimishima, where he says:
Nikkei: How are you looking at the profitability in the business for smartphones?
Kimishima: We’ve published Animal Crossing: Pocket Camp and more, but we still haven’t raised them profit-wise. From here on we want to work on various things like upgrading the insides of them.
Right now, Nintendo is learning the hard way that they might need to utilize traditional free-to-play models to a greater degree.
Animal Crossing: Pocket Camp is a flop, only in the top 100 grossing presently in Japan, with the game in the mid-hundreds in the US grossing charts according to App Annie. Similarly, Miitomo (Free), the first Nintendo title, is officially shutting down soon.
What has been a success for Nintendo? Fire Emblem Heroes (Free). That title continues to do well for Nintendo, making frequent spikes in the top-ten in the US, and performing similarly in the lucrative Japanese market. It uses a far more traditional mobile gaming business model, with more gacha elements and premium currencies. This is outperforming everything else Nintendo has released by far, including Super Mario Run (Free). While that game still made a ton of money by many standards, it’s not hard to see the first big Nintendo title on mobile, an actual Mario game, as being a disappointment thanks to the business model and lack of continued updates to the game.
And don’t forget about Pokemon GO (Free), either. While this is not a true Nintendo title, and does some nontraditional things in the mobile gaming market, it does utilize consumable IAP and social features in order to keep players hooked and coming back to the game, and spending money. And it works, as the title is still one of the top ten grossing mobile games in the world. And it’s a Nintendo-connected title.
Or even, what does this all say for Nintendo’s future on mobile? When Nintendo first started dabbling in mobile titles, their fortunes were flagging: the Wii U was flopping about like a dead fish, and the Switch was still a collection of rumors. Now, the Switch is selling like hotcakes, first-party software is moving quickly, and Nintendo has strong evidence that if they want to succeed on mobile, it might be in a business model that runs counter to their philosophy. Consider how Splatoon 2 features elements of loot and grinding, but no microtransaction despite the obvious use case for them. If releasing on mobile is a risk, and the brand is doing exceptionally well, why not mitigate that risk? They might introduce deals with outside parties like Niantic to help bring titles to life in interesting ways at minimal risk to them.
This raises the question of just what Nintendo is going to do in the future with Mario Kart on mobile. Will it be as free-to-play as possible while remaining just enough Nintendo fairness? Or will Nintendo try some other unconventional business tactic? No matter what, Nintendo’s mobile experience is clear: they can’t just release a game on mobile and expect a major hit.