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 Mario  microtransactions? One investor puts pressure on Nintendo
Mario microtransactions? One investor puts pressure on Nintendo
February 26, 2014 | By Christian Nutt

February 26, 2014 | By Christian Nutt
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    37 comments
More: Console/PC, Design, Business/Marketing



"We believe Nintendo can create very profitable games based on in-game revenue models with the right development team. Just think of paying 99 cents just to get Mario to jump a little higher."
- Investor Seth Fischer in a letter to Nintendo president Satoru Iwata.

The pressure on Nintendo to make mobile games may be heating up. Seth Fischer, who runs a hedge fund that owns shares in Nintendo, has written a letter to the company's president Satoru Iwata urging him to reconsider his commitment to consoles and avoidance of mobile game development.

The quote comes from a letter obtained by the Wall Street Journal in which Fischer urges Nintendo to follow in the footsteps of Candy Crush Saga developer King, which has generated massive free-to-play revenues on mobile.

Of course, Fischer is just one investor, but Nintendo has already fielded many calls to move its games to mobile platforms -- which the company is so far flatly refusing to do. Late last month, Iwata confirmed that his company plans to use mobile as a marketing tool for its dedicated consoles, and not to generate revenue for Nintendo.

In an investor Q&A following its results, Iwata said that "the key aspect is that Nintendo would like to establish a firm channel on smart devices through which we can connect with consumers. This channel will enable not only us but also third-party publishers to communicate all the fun content on Nintendo platforms to consumers."


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Comments


Josh Charles
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No. Just no.

Katy Smith
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O_o

Mike Murray
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"Just think of paying 99 cents just to get Mario to jump a little higher."

Really?

Nick McKergow
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Yeah Nintendo, just look at the good example set by King. Don't you want to be as renowned for quality and integrity as they are?

Leroy Sylva
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No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.
No. No. No. No. No. No. No. No. No. No. No. No.

NO.

NO.

NO.

I don't care how many times I have to repeat myself, but for the love of all that's holy, NO.

Ron Dippold
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Lumbergh: "Yeahhhhh, soooooo, if you can have that in by Tuesday, then, that would be greaaaaat."

Kyle Redd
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I have to believe that suggestion was intended to be sarcastic, so that I do not fall into despair.

Ardney Carter
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That's what I thought when reading the headline, but given the source it seems the suggestion was made in earnest. And yes, it IS disgusting.

Sam Stephens
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"Just think of paying 99 cents just to get Mario to jump a little higher."

This statement is just so...wrong. Mario's jump is an exact science and Nintendo probably spends countless hours designing levels around it. Allowing players to make Mario jump higher would undermine the entire concept of platforming.

Jason Withrow
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Exactly what I came here to say.

John Trauger
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...and it's pay to win to boot.

Zach Lyle
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I hope he doesn't own many shares.

Rick Kolesar
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"Thank You Mario! But Our Princess Is In Another Castle!... unless you give us $1.99"

Mike Murray
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I wish Yamauchi was still alive and running the show so he could tell these investors to GTFO. Because that's what he would have done.

Ron Dippold
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Just think of destroying Nintendo's perfectly balanced platform games, which are one of the few differentiating things they really have left, for 99 cents.

That's really the worst thing about F2P designed by suits. There's nothing they won't destroy long term for some short term cash, no well they won't poison, figuring they'll be on to the next scam by then.

Thomas Happ
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How about you pay and it just takes you to the end credits. You don't even have to play! Go outside and enjoy the sun ... all for just 99 cents.

Tania Anta
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Not sure if trolling or he's actually serious.
Either way...NO, ffs.

Paolo Gambardella
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only 99 cents and my personal Mario can jump higher? SHUT UP AND TAKE MY MONEY.
(joking -_-)

Christian Kulenkampff
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"Just think of paying 99 cents just to get Mario to jump a little higher."
And that's how a hedge fund manager sounds like - robber baron attitude at its finest.

Mark Velthuis
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Only people who have no idea about game design can say things like this. Very sad to see these kind of people can influence the games industry :(

Amir Barak
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Better to keep quiet and be thought a fool than open your mouth and prove it.

Ricky Bankemper
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Disgusting....

I would actually enjoy seeing Cosmetics in the upcoming Super Smash Bros and Mario Kart games though. I think that would actually be a good idea. However, they must not restrict characters or karts behind pay walls, strictly cosmetics.

Maria Jayne
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This stinks of somebody who doesn't play games, trying to monetize those that do, without a clue why people play games.

Ian Uniacke
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Worse. It sounds like someone who thinks that people who play games are idiots to be exploited.

Neil Aemmer
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I made an account just so I could post in this thread and this is my first post so forgive me if I run a bit longer than I should.

I get the feeling most of us on here don't have business degrees so I thought it might be useful to post something from the perspective of someone who has some training in business on how to best respond to ideas like this in a way that a business person like this investor will likely understand instead of just yelling at him that he's a "noob" and doesn't understand video games. (I'm horrified by the idea too, but you won't convince him he's wrong by yelling at him.)

A stock market is a great part of a high functioning economy but it comes with several negatives, one of which is guys like this can buy part of your company and then drive it into the ground if he manages to acquire enough of it. In theory, all investors should have the same goal for the company they own: to increase the value of the company over the long term. Of course, people rarely all have the same priorities and goals.

Perhaps this investor wants to sell his stock in the next 6 months and is fairly certain that an announcement about going mobile would boost the price in the short term and he doesn't care whether or not Nintendo will succeed with mobile. It's hard to say exactly what his motivations are. (He could also just be bad at evaluating the industry.)

So, the best argument that I think we game developers can make against an idea like this is to say that going mobile in the same way that King does would devalue Nintendo's brands over the long run and would simply be seen as a quick cash-in by customers. The resulting loss of brand value would equal a loss in customers which would equal a loss in future revenues which would result in Nintendo's stock price plummeting (and stock price is supposed to represent the value of a company's future cash payments to the stock holder).

Nintendo likely could bring Mario and Link to mobile platforms but the best way would be to do it in a way that reflects the fact that Mario and Link are high value brands and cheapening those brands would be a mistake. And charging $.99 to jump higher would almost certainly cheapen the experience.

Michael Joseph
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RE: "In theory, all investors should have the same goal for the company they own..."
--
I don't even think you can say "ideally" let alone "in theory." "Ideally" for some means the elimination of publicly traded corporations precisely because there is no "ideally" that solves all of the problems associated with them that leaves the system intact. And the more one considers the implications of that... the more one starts to view the inherent nature of the stock market as something negative. But I digress.

Different folks invest for different reasons which is sometimes reflected in the make up of their portfolio but not always. Some people will not invest in financial corporations or those that manufacture alcohol or tobacco. Some people will not invest in companies that have more workers overseas than domestically. Others have simpler goals unencumbered by any sense of morality, patriotism, responsibility or ethics... just make money and make money fast and to heck with the long term consequences. The latter views the former as willfully ignorant, closeted participators who need to maintain the illusion of their own untainted morality.

But you can't explain to the latter the advantages of cultivating the long term health of a company. He does not care about such things. He'll leave that burden to others.

I don't believe every idiot needs to be reasoned with. If an investor hasn't taken the time to learn to speak the language of the art/craft/service that is the business of the company he's invested in, he shouldn't be trying to give them advice on how to run it. And it's not the responsibility of anyone at Nintendo or elsewhere to explain to him the folly of his suggestions. People like that deserve to be laughed out of the room because he insults them by the magnitude of his arrogance.

But assuming Mr. Fischer is NOT an idiot, there are other motivations for giving the type of strikingly bad advice he's been giving. For instance, maybe the incendiary 99 cents to jump higher was said a bit tongue in cheek. Or maybe he wants to help sow discord within Nintendo as a means to some unknown end. Who knows. Whatever the case I find it hard to believe that Mr. Fischer has Nintendo's interests or the interests of it's fans at heart.

Ujn Hunter
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How about you invest in another company Mr. Fischer? Say, maybe... King? Thanks.

Bob Charone
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"Just think of paying 99 cents just to get Mario to jump a little higher."

That is stupid because you can already pay much more to jump higher with Luigi IAP of New Super Mario Bros U

Alexander Symington
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New Super Luigi U isn't an IAP for NSMBU. It's a completely independent game with different content that is balanced around Luigi.

Napat Jungpatanaprecha
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Changing of brand positioning may hurt Nintendo more than benefit it. Given how stupid and incapable the people considering themselves "hardcore" think they may look, needing to buy those extra abilities in order to pass something while the more capable ones could just not stop trying. The strong point of Nintendo having many creative and challenging games had made a lot of us feel very proud of ourselves when we beat the games. Too bad the successors of these games are now made a lot less challenging for those casual gamers Nintendo tries to take back from smartphone marketshare making these games less fun and less fulfilled for the hardcores who are their original fans. Though the classic games look pretty, they shouldn't be considered casual. I think that Nintendo shouldn't have thought of going all the way for "Nintendo is for Family" image making. Even though their original game system name was Famicom and Wii was very successful, Mario and Zelda has never been for Family. With a long play time with all those barbs, endless pits and traps, it's not for a faint of heart. I for one don't think that any newer Mario games which all tries to go easy on people are better than Mario3 and don't feel the rush of buying Wii U for those new Mario and Zelda games. It's just not getting anywhere these days. However, one game from Nintendo Direct I do feel excited about is the New Yoshi's island. While the graphics look even cuter than Mario series, it's a more challenging platformer series. It just kept getting better and better. The last one I played 4 years ago made me feel even more alive than Mario3 did. I already got 3DS XL for my Pokemon XY though so no new platform buying for this game. Will I ever buy a Wii U I still don't know at this point. But please Nintendo, don't go freemium business model.

Jeff Leigh
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I completely support Nintendo moving in the direction of using video game mechanics to promote health and fitness over F2P. (I backed the Virtuix Omni for that very reason...)

I think there is one direction Nintendo could go that they would excel at: there are several generations of Nintendo fans who would love Nintendo's fun take on improving health and fitness. The other direction lands Nintendo slugging it out with every other developer that buys into the latest industry fad.

Harmonix gave me a fake guitar and a set of drums - and I couldn't put them down. I'd love for Nintendo to give me a scale, some weights, and maybe an add-on treadmill and make it impossible for me not to use them because of how much fun it is to play.

I would love to see Nintendo doing that. I'd buy it in a heartbeat. Not just gimmick pedometers - real fitness. I'd pay hundreds, thousands for my family getting exercise while laughing together, setting and meeting realistic goals, and having fun. I think that is a great next step for this technology.

Jeremy Alessi
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Nintendo games bring you into another world. F2P purchasing would ruin that beautiful thing they do so well.

Bob Johnson
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The guy shouldn't be invested in Nintendo if he thinks Nintendo goes around chasing trends.

Luis Blondet
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If Nintendo is the anti-f2p, i hope all you anti-f2pers have already bought your Wii U along with a good bundle of peripherals and games, because this battle won't be won by principles, it will be won by profits.

Emmanuel Henne
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Just imagine: pay $ 0.99 to change Mario's outfit ! Awesome !

Michael Joseph
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If Nintendo released a classic game bundle on Steam that included 20 games all faithfully ported to the PC for $59.99 would you buy it? Ask yourself which games should it include?

I think a lot of people would buy such a bundle. It's low hanging fruit with super high margins. And of course Valve would be thrilled beyond belief and cut them a sweetheart deal because of the massive number of new customers the bundle would draw. Nintendo would generate half a bajillion dollars (figure pulled from gut... did you know you have more nerve endings in your gut than you have in... bah look it up) in sales worldwide in 6 months without having to spend 100+ million AAA title dollars and 150 man years of premature aging to do it.

With such a compelling back catalog, they could start their own game distribution system for PC\Mac\Linux. I mean, some companies think their own back catalogs are impressive, but when Nintendo stands next to them and whips theirs out everyone else runs away in shame...

3 Months later they can release the "Forgotten Levels(TM)" DLC designed by The Master himself that for some reason *cough*made up by marketing*cough* couldn't be included with the original release. "For this very special $7.99 Zelda map pack, The Master was busy defending the Earth from an alien fleet of cyborg Chuck Norrises and missed his bus and couldn't get the maps to the cartridge manufacturer before the 3'oclock deadline. Buying this DLC will show the aliens once and for all that they didn't win!" would be one such plausible excuse. Including mod support for classic games like Zelda and SMB would be cool too. Damn feature creep.

Nintendo doesn't have to go down the F2P road, they just need to think beyond their own hardware.

http://finance.yahoo.com/echarts?s=NTDOY+Interactive#symbol=NTDOY
;range=my

Jason Long
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Nintendo has always been it's own thing, sometimes ignoring and sometimes setting trends. They absolutely value brand above nearly anything else and while I agree that the quote at the top is likely tongue-in-cheek the FtP model is currently associated with a very different flavor of game than Nintendo's current brand. It's interesting, though, to see so many negative reactions when on the other hand, there are dozens of articles - and writers - on this site telling developers that FtP is the future and it's no longer a dirty word. Maybe it's not - unless it infects our own childhood memories? :) "Yeah that boy is ok... but he can't date MY daughter!"

I also wonder if piracy isn't still one of the primary factors. I would assume Pokemon on iPad would be a license to print money, but considering how easy it is to jailbreak an iOS device and the tech-savvy nature of Pokemon players I have to think piracy would be a huge concern. King is obviously doing ok but I don't think they're attracting the same market.

Honestly, let's be real, folks: it's not a matter of if but when Nintendo jumps into the mobile market. I mean, they all but created the mobile market 20 years ago. The trick is that it will have to be on THEIR terms. That's the only way Nintendo has ever played.

Edit:
Actually, with articles like this, maybe Nintendo really does believe its hardware is the future and software is just icing. That would certainly explain their reluctance to compete with their own hardware market.
http://www.gamasutra.com/view/news/211677/Nintendo_to_give_away_P
okemon_X__Y_to_entice_new_3DS_buyers.php


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