I’m not sure that Nintendo’s much heralded free-to-start (F2S) monetization model was worth the wait. It was a year and a half ago that it was first touted, with Nintendo CEO, Satoru Iwata’s famous statement that indicated Nintendo would not be hunting for Whales.
Sure, we all knew the F2S model had been done before, but with the accumulated learnings from free-to-play (F2P), maybe there would be a new twist that will transform the online game economy. Apparently not.
Gone in 60 seconds
Not only has Super Mario Run (SMR) ignored advances in F2P commercial best-practice, it’s overlooked the importance of a slick on-boarding process to retain players, with many bemoaning that the game set up was at least as challenging as the trial content. In F2P, the first 60 seconds are critical, so the last thing they should have done was to encourage players to leave the game environment to link accounts, or negotiate a giant list of countries that’s more comprehensive than Kofi Annan’s Rolodex.
While the SMR release is arguably the biggest this year, and is already at #1 in 138 territories out of 150 in their first few days’ trading, there is an overwhelming sense of lost opportunity from clunky on-boarding and the use of F2S. This is a sentiment that investors have upheld with a 4.2% launch day drop in the value of Nintendo, equating to a fall of 140.5bn yen ($1,196m).
Whole base monetization
It’s like Nintendo has skipped a generation, and so haven’t learnt the hard lessons of player retention. The main flaw in the F2S model is that it fails to account for monetization of the whole player base, with a defined mix of IAP, ads and social user acquisition. Ideally, all acquired players need to contribute, and that is achieved by giving non-payers an experience which provides them with enjoyable progress to encourage their repeated return. Specifically, the social acquisition tools in SMR feel dated with Facebook and Twitter friend invite options being hidden away in favour of email and text. The game lacks a gifting option for friends, and the potential to visit a friend’s Kingdom would encourage mutual gameplay. It’s feels like a throw-back to the days when post purchase retention didn’t matter.
In Super Mario Run, there is a one-off purchase that provides access to all six tour worlds, rally tickets and in-game currency coins. This leaves the door open to future purchases of tickets and coins further down the line, albeit Nintendo has not shown any inclination towards this. Nintendo doesn’t have the player acquisition problems that most developers face, if they did, they would undoubtedly be less profligate with their non-payers. In F2P you would try to retain your non-payers and optimize their conversion rate.
Comparing F2P with Nintendo’s F2S, the amount of game available to non-payers is quite small, and they could easily give players more time to enjoy the game before pushing for first payment. Players are pressurized to monetize before exploring game elements like Toad Rally, the Bonus Game House and Kingdom customization. DeltaDNA’s experience in F2P is that players who pay later pay more, and so forcing early conversion is detrimental to long-term monetization. With such a limited amount of free content, it should be essential for Nintendo to clearly signpost all that they have within their on-boarding process, before pressing for first payment.
The bottom line
No doubt in the early days, the Mario fans will provide a healthy conversion rate, but that situation is likely to look very different in the early new year. Conversion rates in F2P are in the order of 1.8% on Android and 2.6% on iOS. The average revenue per paying user in F2P is around $26, whereas SMR only charges $9.99. No doubt, Nintendo will take a view on the revenue achieved from the launch and look to see if they can repeat the trick with releases of future worlds down the line; but we would expect they would need to add some more interest into the gameplay with these releases to provide sufficient value and bring-back lapsed players.
If the SMR F2S mode is to outperform F2P without additional IAP, with a $9.99 price point, they will need to consistently achieve conversion rates that outperform F2P by a factor of three; a tall order indeed with the current on-boarding and early payment mechanisms currently utilized.
Super Mario Run is making the poor players do all the work, and trading on the brand, rather than delivering a compelling experience. This is a very “old-school” approach and unfortunately won’t maximize the opportunity to give Mario fans, and potential new fans, a great gaming experience.