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Nintendo 'Not Interested' In Free-To-Play Model
Nintendo 'Not Interested' In Free-To-Play Model
June 16, 2011 | By Mike Rose

June 16, 2011 | By Mike Rose
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Nintendo says it has "no intention" of delving into the free-to-play gaming boom, as it believes it should "try to maintain the overall value of video games."

Speaking to The Wall Street Journal's All Things Digital, Nintendo president Satoru Iwata explained that the company is not interested in developing free-to-play titles, and would rather make games that are "appreciated by the consumers."

"Nintendo is not interested," he said. "We have no intention to provide a property to any other platforms, or making them available in a mode that does not require consumers to pay at all."

"Nintendo is a company, which is trying to maintain the overall value of video games. If we were simply going to say OK, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future and the entire industry will fold."

"When we look at the entire system of freemium, it’s not always that everyone is happy with the offers." he mused.

When questioned about the success many companies are having with the free-to-play model, he explained, "There are great examples of advertising and doing the microtranscactions, and several companies who have come up with that kind of system."

"But on the other hand, if you ask me, is this a system that can be sustained for the long time? I don’t know the answer. And, my point is that I’m not willing to go that direction, as well."

At the Game Developers Conference earlier this year, Iwata expressed similar sentiments towards the industry's move to Facebook games and free-to-play social and mobile titles.

"For [mobile and social platform holders], content is something created by someone else. Their goal is to just gather as much software as possible, because … that is how they profit. The value of video game software does not matter to them. … The fact is, what we produce has value, and we should protect that value," he said at the time.


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Comments


Mun Lee
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Finally someone is willing to make a stand when everyone else are jumping ship. Props for that!

Joe McGinn
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Have to agree with that. Putting their money where their mouth is. I hope they're right, and it's possible to maintain a working closed game market, or a lot more game developers are going to be out of work.

Neil Sorens
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The real problem for them is that f2p discourages people from spending money on other products. If you've invested tens, hundreds, or thousands of dollars in your virtual farm, you're less likely to go get the new Mario game.

Todd Boyd
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Yeah... the entire scale gets thrown out of balance. Regardless, I'm quite happy that *somebody* decided it was high time to put their foot down.

Florian Garcia
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I am not sure really. It's not because there are free performances in the streets that i stopped going to see and pay for a nice play in a theater. Same with TV and cinema.

The game industry is now in this period that other industries went through when independent pushed for more creativity and big group pushed for higher budget products.

Nintendo doesn't need f2p to my mind. And i think they have been here long enough to know what they should or shouldn't do :-)

mark donovan
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It's amazing that none of you knows anything about the F2P market, how the consumer metrics or economics work and yet you spew your opinions as gospel. The fact is he's speaking from a defensive and emotional position and not rationally defending his point of view. He may be right that sticking to paid content is right for Nintendo and he may be wrong, but he has done nothing in this article to prove himself either way. The fact that he is extremely close minded to a well established revenue model (F2P has been around in Asia for 10 years and is now BY FAR the dominant model there) doesn't give me a lot of confidence in Nintendo's future stock price.



The fact is they are going to face a lot more competition as new platforms become more established (the smart TV including Apple, Android platforms). There will be a lot more competition for the casual-core market where graphics aren't as important and fun/creative input devices are used to differentiate games. There is no way that Nintendo will be able to out-innovate thousands of game developers building for platforms with potentially hundreds of millions of potential customers.



The key strength they have is content from their franchises (mario, zelda, etc). Maybe this will be enough to force consumers into buying Nintendo hardware - maybe it won't. The future will tell, but history does not look kindly on people who refuse to even contemplate new business models and platforms - especially without a defensible explanation as to why.

Raymond Grier
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It's amazing that you assume these people don't know anything about the f2p market. I don't know the other people to whom you refer but recognize some of them from previous posts and think that any knowledge they 'might' have lacked in the past has since been made up for by the number of these kinds of articles they have read already.

The quality of a well executed high budget product will usually beat out most f2p products in the long run so there is little threat. They don;t need it and probably don't want to fund such products by enabling advertising for other companies (which often looks like endorsement even if it isn't). I don't blame them for sticking with what works for them, they aren't going to go out of business because of f2p.

As for Iwata being closed minded, it is only closed in terms of what he is telling you. Your other assumption is that what he didn't say in the interview ("not rationally defending his point of view") means he hasn't thought about the points you've made shows you underestimate he and his colleagues who have made Nintendo a lot of money over the years through good decision making.

Sterling Reames
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Considering inflation, you're not doing a very good job at protecting the value of games Mr. Iwata. Over 25 years ago NES games cost $50 ...and now in 2011 your Wii games still cost $50. Taking inflation into account the value of Nintendo games has actually halved in the past two and a half decades. And if we count team size, the value of a Wii game is a mere quarter of what an NES game used to be.



That looks like a steady downward trajectory to me. Good luck with that!

Dan Felder
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You might want to consider that the reach of Nintendo's consoles have vastly gone up and the competition has vastly increased as well - not not to mention that games are no longer the novelties they once were. Not only that, price does not equate to value in any business sense whatsoever. Iwata is clearly talking about games' value from the point of them being something customers will value enough to pay for up front - he isn't just trying to keep prices as high as possible. This is really, really basic business terminology.

Ryan Dormanesh
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I disagree with the notion that the "overall value" of a F2P game is somehow less. Lets face it the idea of selling Steel Diver or Ocarina 3d for $40 in a box is antiquated.

Chris Melby
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Which is why I'll be riding my horse to the local trade camp in few days to trade some furs for OoT 3DS.

Vin St John
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I agree with him that in many ways the F2P model 'devalues' games. Iwata is saying Nintendo is going to deliberately fight the good fight and make the uphill climb, trying to get more and more 'casual' users, whom the F2P model is designed for (eliminate barriers to entry for a game) to pay for their games up-front and realize their value.



However, other portions of his comments are short-sighted. And this overall thing worries me that they're unable to see all the up-sides to F2P and incorporate them into their business model. Wouldn't Pokemon be better, and more profitable, if they stopped released boxed products every year, and just let me pay for damn expansions on my "Pokemon account"? Wouldn't Animal Crossing benefit from a lowered price tag and a catalogue of purchasable furniture? Wouldn't Smash Bros. players pay for access to the 'full' game with stages, characters, rankings, stats, and a tournament mode, if they could still play basic '4-player stock' for free with their friends?

Sean Hayden
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All your examples sound horrible and terrifying. Just FYI. In every example (except Animal Crossing) the competitive advantage goes to the richer player. And in none of the examples would there be room for the kind of real improvements that come with game sequels. We would never see an F2P Smash Bros Melee turn into an F2P Smash Bros Brawl, for example.

Aiden Eades
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I find this quote to be kind've big headed.



"Nintendo is a company, which is trying to maintain the overall value of video games. If we were simply going to say OK, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future and the entire industry will fold."



Because nintendo changes one thing the entire industry is doomed? Right ofc it is.



On the other hand though I do agree, ninty doing F2P would be epic fail, Nintendo is great at single and multiplayer games. Its what they do best. F2P in my opinion at least only works for MMO or casual. And overall in those setting if done right it can be insanely profitable. If I see a game for £50 I think "ooh bit expensie atm" and yet if i'm playing something. Lets say farmville as the example. "Oh that spade would only cost 50p (i don't play farmville i don't know how much stuff costs) "oh that barn is only £1" by the end of it i've probably spent more on that simple game than I would on a full console game.



I found out at one point I'd spent almost £500 on a browser game and hadn't even realised it. I actually thought somebody had hacked my paypal account because it was all small amounts spread over a long period. There were some people on the same game, going by their stats / items who must have been spending nearly that amount on a monthly basis, and for something as simple as a browser game that ads up to insane amounts of profit.

sean lindskog
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I think F2P with paid upgrades cheapens the gaming experience. To me personally, the prime draws to gaming are escapism and challenge.



Challenge:

In any game where I can pay money to make the game easier via powerful upgrades, I am spoiling the nature of the game. If I was playing a game of chess, and my opponent pulled out 50 bucks and said, "now I get my queen back", I'd be like, "this game sucks". Even in a game without direct competition, I would feel my achievements are worth less if someone else can pay money to more easily accomplish them.



Escapism:

Even if the things I can pay for are purely aesthetic (maybe I can buy unique appearances or something), I still revile at how the real world is crossing over into my gaming world. Sure, I know that I had to pay money to get the game in the first place. But you have to pay for books, movies, and music CDs too, so that seems natural. But as soon as real money can be used to alter or improve my in-game experience in any way, the escapism is broken.



I'm fine with paid content, or subscriptions, because these are abstracted from the game itself.



Unfortunately, f2p is a hugely popular and smart business decision for many games. It did wonders to inject life (and money) into an MMO I used to work on, for which I'm thankful. But I don't like it. At all.

Scott Hansen
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Any game that all itself to become unbalanced via money is a poorly designed game, and will not stay around for long. Check out Urban Rivals (www.urban-rivals.com) ... no matter how much you spend, you never gain a real advantage.

Jonathan Murphy
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As long as the market has a competition of price ranges that match the consumer's ability and desire to pay. Then any model is fine. I think Iwata's choice best fits Nintendo's continued business model.

Calin Cheznoiu
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I will follow Iwata's decision-making to the end. And there need be no end as long as companies such as Nintendo remain true to the video game experience. I believe that is what Iwata is referring to as value: f2p is a cheap time consumer compared to setting some time apart every week to sit down with a true masterpiece (on your console).



And so what if it's a profitable market? That just goes to show that the segment which is attracted by casual gaming will follow while those of us original niche market will gladly continue to consume quality gaming, like before video games were mainstream anyway. And maybe we'll start getting more quality titles from the serious game companies like in the old days (please?).

Scott Hansen
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"f2p is a cheap time consumer compared to setting some time apart every week to sit down with a true masterpiece (on your console)."



Bias much?

Ian Uniacke
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I think an apt comparison is that many people are happy to sit down and watch Survivor for free several nights a week but also are happy to spend 2 hours on a saturday night having paid 50$ for their family to go and watch Lord Of The Rings at the cinema. There is room for both.

Joseph Cook
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Equating "free to play" as "valueless" is a ridiculously naive viewpoint. In 5 years time, this quote will seem every bit as absurd and closed-minded as Nintendo's view of online gaming 5 years ago.

T K
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yup. totally agree

Duong Nguyen
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Nintendo seems sure intent on sticking to the past. No to indies, no to free to play etc.. Games don't take teams of 20+ people in an office to make anymore nor do they come on physical cartridges.. It only takes great ideas and execution now and even a small team can do that (ie Minecraft, Braid, etc..) . Not that it matters, the studio system for making big games will stick around for awhile and they'll always support Nintendo, but Nintendo is shooting itself in the foot in the long run by alienating indies and non-traditional developers.

Christopher Williams
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Screw it. Give us an episodic Zelda game. With a new dungeon with a new weapon to take on every month. Leading to an epic battle where we finally get to kill off Gannon for good.

Cody Scott
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well i can say that i have seen 2 things I have liked from Nintendo this month. The statements that are shown here, and the Robin Williams Ocarina of time remake commercial.

Chris Melby
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Ha! Just watched it. Robin's beard is EPIC in that commercial.

Cody Scott
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I was expecting to hear, "He's the most interesting man in the world" at some point of the commercial. Followed by, "Stay thirsty my friends."

Aaron Truehitt
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I understand where Nintendo is coming from. There is a right way and a wrong way to do a Free 2 Play model. Nintendo...Always stuck in the past. They didn't want to move away from cartirdges to CDs in the N64 days. They were not gung ho about online play in the Gamecube days. Many other things as well.



I can say if the entire industry was consumed by the F2P model...Then games would be undervalued and we'd have no more classics. The value would indeed be lost.

Dan Felder
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Were they stuck in the past when they made the Wii?

Aaron Truehitt
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No, They weren't stuck in the past when they made the Rumble Pak either for Star Fox 64. Everyone copied them after that.



Maybe a better way to say it is stuck in their ways. Unwilling to admit they were wrong.

sean lindskog
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I don't think Nintendo is stuck in the past. I see them as sticking to their core vision and expertise, and innovating only where it fits that vision. For example, the wii controller was a major console innovation that certainly pushed the boundaries of games at the time. They made this decision because it aligned with their values for fun, high quality games.



They have decided f2p does not align with that vision. I respect that.

Aaron Truehitt
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I certainly respect that too. I'm just saying Nintendo has gone against the grain before and was wrong in doing so before.

Dan Felder
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I like F2P models when they're done well. However, it's very hard to do them well and necessitates making certain kinds of games - games it doesn't seem Nintendo wants to make. Nintendo is not interested in the casual market anymore, they've said as much. They made their hit with the Wii - but since then the space has become tremendously competitive at very low margins. They just aren't interested anymore, and F2P titles are best for casual gamers.

Scott Hansen
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More snobbery against FTP / Casual space... meh. I find more value in my FTP games than anything in the AAA space...

George Blott
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I'd appreciate it if you listed some of your highly valued FTP games. Out of curiosity / looking for something to play tonight.

Cody Scott
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That APB reloaded isnt bad, just sucks that player skill and level is not in consideration when they match you up.

T K
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league of legends, world of tanks, lord of the rings online, etc...

Christopher Federici
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It's not surprising that Iwata claims to be "ignoring" the free-to-play model right now.



F2P is in the space of digital distribution, online play, and e-shops: 3 things Nintendo knows next to nothing about.



Furthermore: free-to-play does NOT mean casual. A game like League of Legends is anything but casual, and is a great example of delivering quality, free content, while still turning a profit. But again, a highly competitive online top-down PvP game is something that Nintendo can't possibly conceive, and Iwata's statements seem to suggest that he is content with simply ignoring an entire business model.



Saying "Is f2p a sustainable business model? I don't know and I don't want to find out" is a very close-minded approach to a changing industry.

Ian Uniacke
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If you're going to put something in quotes it should actually be a quote and not a straw man. Iwata never said he doesn't want to find out. That's your own opinion.

james sadler
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F2p games are an interesting thing in modern times. It shows the idea that games don't need to cost a billion dollars to be made or rape the buyer to even get started. For that I like them. My problem with them is that I just have not found one that is interesting to me. I also don't really care for most MMO games to begin with which most of these f2p games fall into.



I can understand Nintendo's stance on this though. Free things don't hold mass value. To an individual they might, but to a large group they generally don't. On the same scale though, overpriced or niche things can hold high value, but only to select few that can afford it and so appreciate it. It is a weird balancing act. Sure people will play a f2p game for hours, they might have friends play it with them, but I doubt they will hold it in the same light as a AAA game all the time. It is the essence of casual; something one doesn't have to investing much of anything into.



Like one of the previous posters stated that in the end they ended up paying a lot more for a f2p than they might have on a console retail game. That is the point of these games with their microtransactions and it kills me. "Look at the free game we can all play. Cool. Oh if I want to do this then I have to pay a few bucks for it. Ok, well its only a few bucks. Yay I did that so now what. Oh I need to pay another few bucks to do the next thing. Well its still only a few bucks......." Free is only free if it is free. Ultimately most of these f2p games make it so worthless to play a strictly free game (not paying for any power ups and such when others do) that there is no fun or point to playing them, and they've lost a customer. To me they should be called Free To Play games unless they are completely free.



There are always exceptions to the rule so don't use this as a blanket statement.

Ian Uniacke
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I believe the saying is "There is no such thing as a free lunch".

Luis Guimaraes
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I think most people didn't get it. Iwata is saying that in the soon future, everybody will think games should all be free and never paid for. And that's a culture Nintendo is not trying to train their customers for.

Cody Scott
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I dont think Iwata is saying that, and i dont see how a free to play game would cause one to believe it either. Normally free to play games have a lot of problems and they constant paying for items ends up being more expensive than a subscription or regular priced game.


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