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Saturday, September 23, 2017

How Super Mario Run screws up mobile monetization

The F2S model goes all the way back to when games magazines came with CDs stuck to the front, containing the first few levels of a game to try out to encourage you to invest.
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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.

The F2S model goes all the way back to when games magazines came with CDs stuck to the front, containing the first few levels of a game to try out to encourage you to invest. However, 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

Whether F2S or F2P, you still need players to reach the gameplay and make it through the on-boarding with enough of a positive sentiment about the game to make a payment, more so in F2S, as once they’ve reached the pinch point, they have very few options ahead of them.

Not only has Super Mario Run ignored advances in F2P commercial best-practices, 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 in mobile, and is already at No. 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 percent launch day drop in the value of Nintendo, equating to a fall of 140.5 billion yen ($1.196 million).

Whole base monetization

It’s like Nintendo has skipped a generation and not had to learn 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.

With SMR, Nintendo is in a privileged position where there’s been enough hype over the game for it not to have to find the $3-4 per user for acquisition that most have to pay.

The vast majority of publishers do have to pay for user acquisition and inefficiently discarding non-payers isn’t an option for them. In F2P, you have an average conversion rate of around 2%, let’s say SMR has a fantastic 10% conversion rate, that’s still 90% of players being discarded with little reason to return.

Ideally, all acquired players need to contribute, and that is achieved by giving non-payers an experience that provides them with enjoyable progress to encourage their repeated return. Specifically, the social acquisition tools in SMR feel dated, with Facebook & 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 throwback 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 maybe 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 it did, the publisher would undoubtedly be more generous with their non-paying players. In F2P you would try to retain your non-payers and optimize their value to the game.

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