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The challenges and opportunities for Nintendo as it makes the great leap to mobile

The Monetization Mavens consider the u-turn
The challenges and opportunities for Nintendo as it makes the great leap to mobile
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While the big news of the week has been Nintendo's 'Great Leap' partnership with DeNA, what's really interesting is the debate about the demarcation of work between Nintendo and DeNA.

Some commentators are taking solace from the news that Nintendo will be "mainly" doing the game development part of the business.

However, as Jason Citron pointed out in our general Mobile Mavens group,

"The big red flag ... IMO is the notion that 'Nintendo makes the games, DeNA runs the service'.

"As we all know by now, in order to effectively build a game-as-a-service, you make fundamentally different design decisions."

So - focusing on the expertise of our Monetization Maven group - we asked them:

Do you think Nintendo's approach demonstrates the company's naivety about mobile games, or can its legendary focus on quality win though, even in F2P game design?

Ben Cousins

Ben Cousins

Vice President, Studios at FRVR

As an ex-DeNA employee, I'm the holder of inside information here, but let me just say that DeNA have a long and very successful history of doing divisions of labor exactly like this - where they work with a developer who has a great core game design, advise them on monetisation, and help them plug into the DeNA backend and run events, work with analytics etc.

Games built under these partnerships with the very established and experienced thirdparty teams in DeNA Tokyo and San Francisco are some of the best performing for the company. It's a proven model for them.

I'd imagine in the discussions with Nintendo, DeNA brought up a bunch of case studies of this type, and this evidence of a track record is how they came to agree on the working arrangement.

There are a bunch of risks with this partnership, but this specific issue isn't one of them IMO.

Tim Rachor

Tim Rachor

Creative Director

I think it's really hard to forsee what Nintendo will exactly do with their games on mobile. So a lot what we read is mere speculation boosted by the hype of "Nintendo finally going mobile" or is based upon the company's strong cultural heritage.

So what can potential scenarios be and how can they prove to be successful?

  1. Nintendo simply ports existing games to mobile and then leaving DeNA trying to figure out how to monetize them.
  2. Nintendo is more or less cloning successful mobile games and simply rebrand them. Thinking of a Mario endless runner here.
  3. Nintendo comes up with completely new and innovative mechanics that allow successful monetization.
  4. A mixture of all the above.

I think Jason Citron is mostly referring to number 1 here and I would agree that this would prove at least very difficult to monetize.

Though with Nintendo we should not only think about Mario. For example: it's not that hard to imagine a working monetization model for a game like Nintendogs on mobile.

<em>Nintendogs</em> - looking for a new home on mobile?
Nintendogs - looking for a new home on mobile?

My bets are on number 4. They will most likely protect their assets and brand but adapt them to a certain degree where it works and where it's necessary. I would say it was a good decision to keep the game development inhouse though it comes with some additional challenges and overhead.

I don't think Nintendo lives in a bubble ignoring everything F2P on mobile. They might shake things up a little which could be fruitful for the whole market. And in the end I'm personally looking forward to see how they approach new territory.

Jon Walsh

Jon Walsh

President at Upsight

I think there is huge potential in this partnership, but that it could take a few cycles for Nintendo to hit their stride in F2P.

I'm sure we've all watched many great game studios and publishers jump into F2P only to get it very wrong the first few times out.

“I'm sure we've all watched many great game studios and publishers jump into F2P only to get it very wrong the first few times out.”
Jon Walsh

Nintendo is certainly no ordinary publisher and arguably invented mass market casual games. DeNA will also be a massive accelerator, but I still think it will take a few iterations for them to get it really right.

That being said, I think there is a real opportunity for Nintendo to literally 'change the game' of F2P.

Their ability to create incredibly rich worlds, characters and narratives is still unmatched in the industry. If they can properly bring these capabilities to mobile F2P then they can truly move the whole industry forward and hit their stated goal of 100 million daily players in a game.

I would also personally like to see them help move the industry away from 'whale hunting' into more 'sustainable fishing' by having a much higher percentage of paying players spending less. Although with their fan base I'm sure they'll end up with their fair share of whales anyway.

My point being I would like to see a less aggressive monetization design from them. Consider that even a 3 cent ARPDAU with 100 million players is a billion dollars a year in revenue. Seems pretty conservative if they can transition their incredibly powerful IP and deliver the right game experiences.

Overall I have high hopes for this partnership and am looking forward to introducing my kids to the Nintendo characters and worlds that they've been missing out on due to their strong preference for using an iPad.

I just hope to show them more than a Mario endless runner.

Mark Robinson

Mark Robinson

CEO at DeltaDNA

Nintendo is both very innovative and extremely conservative which is a very odd mix.

They have in the past given their IP out to third parties to develop, early examples where troubled but lately they have done it very successfully but with what looks like a very tight brief and control from Nintendo.

With the Wii it shows how innovative they can be in design and using their IP in different ways (WarioWare for example).

How will Nintendo-DeNA bring <em>WarioWare</em> to mobile?
How will Nintendo-DeNA bring WarioWare to mobile?

So I would expect Nintendo to keep DeNA on a very tight leash.

The design will be driven by Nintendo and they will use DeNA for expertise and distribution. I expect them not to simply port games, but deliver custom experiences to fit the devices.

Where Nintendo has been very behind the times is online, they have a poor store and online play, they have never really embraced the digital age.

Remember they are really a toy company that happens to make games. Business models are not where they are likely to innovate so I expect them to push the premium side. It will be interesting to see if this is an area the DeNA can really help them.

Jordan Blackman

Jordan Blackman

CEO at Bright Black Associates

Yes, this transition presents risks and challenges for Nintendo, but teaming up with an experienced partner to take on such a huge business opportunity isn't naive, it's inevitable.

The reality is that the land grab for mobile mind share is in full swing. Publishers around the globe have realized that well known brands like Marvel and Family Guy are a vital tool in attracting and retaining an audience.

“No company has brands that are closer to players' hearts than Nintendo.”
Jordan Blackman

And in the world of gaming, no company has brands that are closer to players' hearts than Nintendo.

Just a couple years ago, Nintendo believed their brands were so strong that they could work outside the mobile gaming system. In retrospect, *that* was naive.

How many kids don't know Nintendo characters because they aren't on their family tablets? What a lost opportunity!

In order to capitalize on Nintendo's brands, and to pass those brands on to younger players, this transition to mobile is required.

The two companies are both able and expert, and there is ample incentive for them to learn how to collaborate together. I think the partnership is likely to be fertile.

Tom Farrell

Tom Farrell

Marketing director at Swrve

As someone who is a marketer first and an everything - else second, I'm in two minds around Nintendo's move into mobile.

There are, of course, a huge number of reasons why the move makes 'sense'. We all know the opportunity in free-to-play mobile games, we know what they are missing out on, and we all know that if anyone can deliver something new, innovative and - well - fun in that space it will be Nintendo.

“Ask not what F2P can do for Nintendo. Ask what Nintendo can do for F2P.”
Tom Farrell

But that last point touches on why I wouldn't be convinced this works as a long-term play.

Put simply, Nintendo have a well-earned and very (very) carefully protected position as makers of the best games on the planet.

That might sound like hyperbole, and maybe as the father of three small-ish children you should take my opinion with a pinch of salt, but I think that if you ran a straw poll across gamers and for that matter the general public you would hear the answer 'Nintendo' most often if you asked the question my statement implies.

Brand equity like that shouldn't be given up easily, so they've a huge job on their hands to protect that equity whilst delivering on free-to-play.

They can't afford negative brand experience on mobile, so they will have to be totally focused on fun and perhaps take the lightest touch possible when it comes to monetization.

Nintendo can't afford to have a Smurfberries incident
Nintendo can't afford to have a Smurfberries incident

On the plus side, with the IP they've developed over the years I can see fully functional games released that monetize solely on what could be called vanity IAPs. That to me feels like the most likely route. I wouldn't rule out straight up paid installs either.

Last, as a huge personal admirer of the company (can you tell?!?) I take the view that ultimately this can be only be a positive for the F2P space. "Ask not what F2P can do for Nintendo. Ask what Nintendo can do for F2P".

A lot I suspect.

Ethan Levy

Ethan Levy

Monetization design consultant, writer of

I think Nintendo is going to kill it on mobile.

“I expect Nintendo to be Nintendo and that means a devotion to innovation and quality that breeds success.”
Ethan Levy

IMO they are the only company outside of Disney and Warner Brothers with this strong of a stable of beloved characters and worlds, gaming or otherwise.

This isn't just about a Mario infinite runner and a Pokemon CCG.

Think of all the games and genres Nintendo already has a presence in. Think about Animal Crossing, Tomodachi Life, Advanced Wars, Fire Emblem, Rhythm Heaven, Golf, Tennis, Soccer, Baseball, Karting.

Beyond the brand names and genres, think about how good all those games are. I do not expect Nintendo to sacrifice its historic devotion to game quality just because of a partnership with DeNA or an unprecedented move outside its hardware ecosystem.

I expect Nintendo to be Nintendo and that means a devotion to innovation and quality that breeds success.

More than anything, I am excited by the hope that Nintendo will invent new genres on mobile devices. I feel like we have all been waiting for a shake up in the maturing mobile market for a long time, and Nintendo is the company most likely to make that happen.

Kevin Oke

Kevin Oke

F2P Design and Production Consultant

Here's what I'm looking out for:

  • With Nintendo's toy company DNA, it will be interesting to see how they utilize the unique cutting-edge hardware features (that is ever-growing) on smartphones. Strictly from a gameplay perspective, this is exciting.
  • How much will their monetization strategy focus on durable items and content (e.g. Mario Kart tracks, Zelda dungeons) vs. consumables and energy mechanics, given Satoru Iwata's known stance on F2P?
  • How do they go from designing in a vacuum to designing "live" with the help of analytics?
  • How will they strike a balance between their commitment to quality and keeping up with a regular cadence of updates for retention? I think it will take some time for Nintendo to find their sweet spot on this.
  • New Mario/Zelda/Metroid games are a special event for gamers because Nintendo is careful about milking the cow. There's a danger here, but also an opportunity to reinvent older IP that has fallen by the wayside, on a platform that is conducive to failing fast and cheap, in case things don't work out.