Comment & Opinion

Forget revenue, it’s Super Mario Run’s retention that proves Free-to-Start is DOA

Forget revenue, it’s Super Mario Run’s retention that proves Free-to-Start is DOA

When Nintendo CEO Iwata Satoru came up with the phrase “Free-to-Start” to describe the company’s approach to mobile gaming in 2015, he was attempting to overcome what he felt was an inherent lie in the term 'Free-to-Play'.

“I do not like to use the term ‘Free-to-Play',” he told TIME.

“I have come to realise that there is a degree of insincerity to consumers with this terminology, since so-called ‘Free-to-Play’ should be referred to more accurately as ‘Free-to-Start.'”

Other interviews have him stating: "We do not want to use the Free-to-Play terminology that implies you can play games free-of-charge.”

At this stage, the alarm bells should have been ringing.

Misunderstanding

For one thing, the term F2P doesn’t imply you can play games free-of-charge.

It demands you can play games free-of-charge. 

The F2P model is predicated on an unwritten contract that if players throw significant amounts of time at a game, they can unlock everything.

The essence of the F2P model - at least in terms of the best design - is predicated on an unwritten contract that if players throw significant amounts of time at a game, they can unlock everything.

Sure, there’s a continuing debate about whether “significant amounts of time” is hundreds or thousands of hours.

Personally, I’ve put hundreds of hours in EA’s Star Wars: Galaxy of Heroes, and thanks to the recent update which added spaceships, am little closer to maxing out the game in terms of things I can unlock and level up than when I started playing 13 months ago.

And that’s the point of the F2P experience.

The deal is players will form communities and commit vast amounts of time to games while developers will continue to give them interesting and enjoyable things to do, with the few players who spend large amounts of money providing the financial incentive to fuel this perpetual entertainment machine.

Now, let’s rewind to Free-to-Start.

Stealing our fun

Pusillanimous in terms of game design and ambition, the vision sees Nintendo serving up a game - maybe even a great game - but splitting it into a small starter slice you get for free.

The main part of the feast is locked behind a paywall.

In the example of Super Mario Run, the game has been split into 24 levels, 20 of which are unavailable unless you pay $10.

And on one level, mobile gamers have fully endorsed the model.

Two weeks post-launch, estimates suggest Super Mario Run has been downloaded 90 million times on iOS. Currently, the official number from Nintendo is 50 million, but when the game is soon released on Android, we can expect the total to reach 150 million, even 200 million within weeks.

Yes, mobile gamers like free stuff. What they certainly don’t like is paying for stuff.

We could make the usual arguments why they’re wrong: arguments about the value of $10 in the gaming space or spurious economic comparisons between dollars per hour of gaming and hours of other screen-based entertainment.

But, let’s save our breath. Those 90 million (or 50 million) gamers have already spoken, shouted even.

Mobile gamers like free stuff. They certainly don’t like paying for stuff.

By comparing Super Mario Run’s position on the download charts and top grossing charts, it’s clear the conversion rate for Free-to-Start players who became Pay-to-Complete players is pitiful - 3%.

Of course, as the download total rises and the game’s released on Android, this rate is going to fall. By the end of 2017, I’d expect it to be less than 1%.

And let’s also be clear. Comparing the conversation rate of Super Mario Run to a proper F2P game is another non sequitur.

One is measuring the one-time conversion rate of single digital item (in this case 20 levels) while the other, the conversation rate of an experience that can be consumed via time or money.

However the rates stack up, it’s an apples to pineapples comparison.

One weekend of play

Anyhow, the nail in the coffin for Free-to-Start isn’t the 3% conversation rate. It’s the comparison between Super Mario Run and Pokemon GO in terms of user engagement.

According to Verto Analytics, which measures user behaviour via an opt-in measurement app, Super Mario Run demonstrates the sort of player behaviour we’d expect from a console game.

The time spent per user per day increased over the first couple of days, and then decreased once the players had consumed all or the majority of the 24 levels.

The other long-term modes such as Toad Rally and Friendly Runs clearly aren't holding many people's attention. 

Conversely, the free-to-play Pokemon GO demonstrated ever-increasing engagement over the its first five days as the game’s virality took off, and its peak month for revenue wasn’t its launch month but August, the month after it launched.

One final - flawed but significant - comparison. Pokemon GO was the most downloaded game of 2016, while Super Mario Run was the fastest downloaded game of 2016.

Pokemon GO generated an estimated $200 million during its first month and has to-date has done about $750 million, earning over $100 million every month. 

Conversely Super Mario Run has generated an estimated $30 million during its first two weeks - its peak earning period given its monetisation is one-time.

And even at a 3% conversion rate will need a gigantic 333 million downloads to generate $100 million.

What's next?

How this situation will impact Nintendo’s forthcoming mobile versions of Animal Crossing and Fire Emblem remains to be seen.

Hopefully, given these games aren't Nintendo's significance franchises, the F2P experts at DeNA will have been given the opportunity to create mobile games with long-term appeal and a more flexible monetisation model than locking away the fun stuff behind a paywall.

Otherwise, Nintendo’s mobile experiment, which promised so much, will have been Quick-to-End.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

Comments

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Pete Shea
Seems to be saying the game might *only* make $100M? Considering it probably cost less than $2M, that makes it massively profitable, no? If Nintendo make 5 or 10 of these a year that will equate to huge additional profits for them, without compromising their commitment to protecting children by avoiding consumable F2P mechanics.

Does every single mobile game have to make a gazillion dollars- is that all this business is about now? How many mobile devs/pubs manage to repeat huge success beyond one or two games- very few.

Perhaps Nintendo's brand and long term strategy across platforms and franchises is worth much more in the long run than maximising revenue in the short term on one or two products?

Maybe they think they can begin to gradually shift trends in mobile gaming away from F2P? Doesn't seem likely right now, but Nintendo have changed the global games industry multiple times in the past, so wouldn't rule it out. Is F2P the only future for mobile games for the next decade?
jon jordan
The wider issue for Nintendo is it's in a period of declining revenues and massive uncertainty RE: the business model for standalone consoles. I don't think Switch is a sure dunk to turnaround the company's fortunes in that regard, so if I was Nintendo CEO I'd be looking to take a chunk out of the c. $30 billion mobile game market. A onetime drop of $100 million is certainly nice but it doesn't move the needle in a market where Sony and Microsoft are revving their consoles again and all over VR/AR. Also, how many Marios does Nintendo have? Mario, Zelda, & Pokemon, which it can't directly profit from...
Pete Shea
Declining revenues, but always profitable- even through their worst console generations. In terms of uncertainty- making a F2P hit is incredibly hard, even with big brands. Maybe they felt the risks of making a 'Clash of Marios' that failed and potentially damaged the Mario brand on mobile forever with a new generation of players were too great.

I'm not saying it's the right strategy to maximise returns for the shareholders or 'conquer mobile', but it might be the right strategy for Nintendo at this point in time. If Switch flops, then they might have to reconsider, but the key to Nintendo's success over many decades has been valuing and protecting their franchises (apart from SMB movie obviously) and their reputation as being family friendly.

Has there ever been a big Mario game that flopped hard or alienated fans? That was the risk here, and we've seen even the biggest names in mobile fail to find the magic formula. (yes you can soft launch and build game as a service and audience over time but still high risk)

I suspect we may see some DeNA F2P Nintendo titles in time- perhaps with lesser franchises, but I totally understand them not going down this road with the first Mario mobile game out of the gate.
Barry Meade
Bit confused by this Jon. Why compare a non F2P game with the biggest F2P games, and declare failure based on numbers? Does endless retention matter so much in a game with a finite end? If your game cannot make money beyond 20 hrs of gameplay, you lose money by retaining players beyond that point as endless retention costs endless money to provide. There's the buzz angle to retention but keeping an online community chattering about your game matters more (a) the less well known your brand is and (b) the more money you have to make. But with Mario? I'm not so sure getting Mario well known was the main point of this game. Everyone has heard of Mario, I think it seems more to make a statement about what Mario represents, for the future. Money & buzz are great to have ofc, but we'd have to know what was on the minds of Nintendo to know whether SMR was a failure or not. As far as I can see, there's only one sure thing we can fairly infer from Nintendo's choice to do SMR as a paid-unlock: retention and money was not what they built it for. This article is bizarre.
jon jordan
To some extent, I agree - I hope - that Nintendo understood how it was limiting the financial upside of its biggest brand with this paywall model. But given the quality of the game designers at Nintendo, I don't see why it couldn't have made a F2P Mario game. That's why I feel a bit cheated. Iwata moaned about F2P but didn't engage with what has been the biggest change in game design and monetization for the past decade. As for success, I'm not sure I'd be very happy with a situation in which 97% of my audience didn't pay me any money and I couldn't even get any of their time.
Robin Clarke Producer at AppyNation
It's not 97% of the game's audience though is it? It's an audience that wanted a free Mario game, when one isn't available. The specific strengths of the IP dictate the appropriate monetisation model. Some games adapt easily to different models (Animal Crossing will be a great F2P game) but others would require throwing away too much of the core of the game.
Barry Meade
That's fair enough that you'd feel let down it's not a F2P Mario game because that's the stuff you enjoy playing. But your article goes a bit further than that, rather you claim the whole project a failure when it's clearly a very good mobile release, for many it may be the best of the year.

So you have your imaginary Mario game, Ninty have a real one. Whether you meant it or not this article read as you projecting your intentions for your Mario game onto theirs, and unsurprisingly finding it lacking. The article re-frames the game into something it isn't in order to apply judgements it shouldn't have to answer to. Retention is imperative in a game with no IAPs. Really? A $10 paid unlock in the free charts should get CoC's traction and no complaints. Really? And how is 3% a 'risible' rate of conversion for a paid-unlock game when 50% of F2P revenue comes from 0.15% of players? Years of free games on mobile assured that most players don't think games are worth money any more. Allow for the fact that a games maker may want to fight that mentality, Cnut-like though some may think it.

Maybe Nintendo are naive because they'll earn far less. Well, maybe they see the game as a worthy statement irrespective of financial outcome. Nintendo could have taken the view to leverage monetisation with Mario but it does look rather like they've taken the view to fight Monetisation with Mario. A few of the pearl-clutching reaction pieces I've read (they could all be retitled "Wait, it's NOT about money?") seem driven by the fear that Nintendo may be challenging the authors personal worldview that mobile is the fast-food of gaming, and by trying to make 'better' games (i.e. unmonetised) you're some new form of snob. The implication is that if Nintendo can't single-handedly alter the market for mobile games, they should just give up and join in the F2P bonanza.

They don't know what they ask for. What a miserable life they bravely prescribe for developers & players. This world view disallows that some players aren't really into F2P mechanics, nor are some developers. Each needs a place in the market, even if it's a niche. Limiting all games to F2P + high monetisation is one reason why mobile gaming displays a tiny amount of innovation relative to the size of the market. It's remains a world led by group-think and giving in to that is a machine for turning every developer into an also-ran.

I think journalists genuinely forget how much F2P affects, or more correctly, contracts or reduces game designs and why that can be enough reason never to do it. From a developers point of view, it's very possible Nintendo doesn't much respect where mobile gaming is, or rather the intensely commercial form it has taken. After all, this is a world where advertisers make the most money, yet journalists cheerfully expect any developer to give in to all that that implies. Well maybe Nintendo don't much like that world? They certainly judged that they could not make the Mario game they wanted using F2P techniques. It may just be that Nintendo converts a few previously entitled gamers into a new game experience, one they've never thought mobile could give them.

Is that really so shocking? When Nintendo have an idea that works in the F2P world, I'm 100% sure they'll be all over it. Until then judge non-F2P games for what they are, on their own merits.
Grégory Jourdan
It really sounds like you are attributing the poor engagement to the paying model, which I don't see how it would be the case. Seems to me people got bored of the game.
jon jordan
Yes, exactly. The model Nintendo has chosen has poor engagement built into it because it provides a finite block of game. Once that has been consumed, there is little reason to replay, unless you want to collect all the items or do the Toad Rallys, which are side shows.

So people get bored of the game. Nintendo needs to think seriously about games- as-a-service - something it's never done.
jon jordan
Good point on the games-as-a-service angle. Not sure paywall is an "untried model" though, just an inefficient one for your biggest IP.
Robin Clarke Producer at AppyNation
"Once that has been consumed, there is little reason to replay, unless you want to collect all the items or do the Toad Rallys, which are side shows." Toad Rally is the main mode of the game. World Tour (until you get to the harder coin challenges) is a training gym for Toad Rally.

"Nintendo needs to think seriously about games- as-a-service - something it's never done." Except for Smash Bros, Mario Kart, Splatoon, Mario Maker and Animal Crossing on their current-gen machines, which they're run as on-going live operations months and years after launch.

As for retention, I expect if you were just counting payers, rather than people who downloaded then realised you had to pay, you'd see a different result. The game doesn't need to encourage player behaviour that an F2P game does to survive.

I'm with Barry on this one. Nintendo have just shifted upwards of 3m copies of a game at $10 using an untried model, in a few weeks, on one platform - it's hard to see how this has been a failure.
Jennifer Maiko Bradshaw
DOA? Is this "dead or alive"?

I'm not sure why you would spend the entire first third of the article confirming that F2P isn't comparable to Free-to-start, then do exactly that by comparing Pokemon Go to Mario Run?

If you compare ANY mobile game - including 99.99% of all other F2P mobile games - to Pokemon Go, they will look like abject failures. This is not a fair standard by any means. A game would usually be 'dead'/considered a failure if a)it did not turn any profit or b)it did not meet internal projections for revenues. We have no way of knowing either, especially not yet.

I expected better than cliches like "mobile gamers like free stuff" from you, Jon.
jon jordan
Thanks for the comment: Dead on Arrival not Dead or Alive.

In terms of your substantive point, what I was complaining about was the comparison of Super Mario Go's conversation rate to the IAP conversation rate of F2P games. I think the comparison of Free-to-Start and Free-to-Play in terms of retention is the vital comparison, however.

Nintendo could have build longterm retention into Super Mario Run in terms of a stronger multiplayer mode etc but it's hard to see how this would have produced comparable retention to any F2P game. F2P are built for longterm retention, something it's very hard to do with games that don't constantly offer new content.

Still, I do think you're correct in terms of criticising my comparison between Super Mario Run and Pokemon Go. The choice of Pokemon Go was too loaded in terms of Nintendo IP and its phenomenal success in 2016, which didn't make this point as clear as it could have been.
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