Super Mario Run's Pricing Takes Hits From Consumers and Investors

Super Mario Run's Pricing Takes Hits From Consumers and Investors

Nintendo first mobile game is successful, but the company is still suffering the slings and arrows.

Last week, Nintendo launched its very first mobile title, Super Mario Run. The game is an endless runner with a Nintendo spin on it. While the game is initially free, it's not free-to-play. Instead, it's the shareware model: players can enjoy the game's early levels before being asked to pay $9.99 for the entire game. Solid game, single price point. Our own Nadia Oxford said Super Mario Run is "a solidly-built running game that demonstrates Nintendo understands the mobile platform despite its early aversion to it."

So why are people unhappy?

Investors were seemingly disappointed by Super Mario Run's performance on the Apple App Store this weekend. Nintendo's shares finished down 7.1 percent in the Tokyo Stock Exchange today, and the stock is down more than 16 percent for the past five days. The problem for investors is that Pokemon Go, a collaboration between Niantic and the Pokemon Company, set expectations for Nintendo-related mobile launches. Super Mario Run did not match those expectations completely.

"If you were hoping that Mario would perform like Pokémon, then Mario clearly didn't achieve its mission," said Ace Research Institute analyst Hideki Yasuda told the Wall Street Journal. "But that was placing expectations too high because the Mario game's business scheme is so different from Pokémon."

Super Mario Run was the number one game among free downloads in 49 countries and the top-grossing game in 8 countries, including the United States. According to App Annie data obtained by Polygon, around 3.5 million people downloaded in the game in the first 14 hours in the United States, compared to 4.7 million downloads in the U.S. in 24 hours. That puts SMR slightly ahead of Pokemon Go, even if the launches aren't quite comparable: Pokemon Go launched in 3 countries, while Super Mario Run launched in 150. And that's also on the back of a complete App Store promotional takeover for the latter title.

App Annie estimates the conversion rate of free downloads to paid versions is around 4 percent worldwide. 37 million downloads in three days, with roughly $14 million generated in revenue. In contrast, Pokemon Go surpassed that with $5 million spent by customers per day at launch. Again, this is with far fewer countries in the launch list. This is where investors are getting antsy.

It also doesn't help that customers are savaging Super Mario Run on the App Store. The game has an overall rating of 2.5 out of 5 stars. The problem is the game's 5-star reviews are matched by its 1-star reviews, with more than half being in the latter category. There are two reasons for this: The first is the game's always-online nature, which gets in the way of a truly mobile experience. The second is the business model.

A smattering of Super Mario Run reviews.

These days, when mobile game players download a "free" game, they either expect it to be free, ad-supported, or free-to-play via microtransactions. That has become the norm for the market. The shareware model Nintendo uses in Super Mario Run is coming across as a bait-and-switch to some consumers. To them, it'd be one thing if Super Mario Run was $9.99 on the App Store, but it attempts to entice with a bright, shiny "free". Players are only clued in about the price after playing the first few levels.

I don't think the $10 paywall (which is essentially how it comes across) is a bad thing in practice. I understand and appreciate Nintendo's commitment to a one-time price. Unfortunately, perception trumps reality and you have to align with the market you're selling to. Mobile gamers are used to seeing dollar signs for new characters and costumes, a quick revival, or to decrease wait times. What's happening here is sort of a reverse of free-to-play business models first reaching consoles (remember Oblivion's Horse Armor?): players expect the normal business model, see something else, and revolt.

Super Mario Run is up against expectation set by games like Rayman Jungle Run.

It also doesn't help that mobile players have other endless runners to play with, like Temple Run or Rayman Jungle Run. Looking towards these games shows what players expect from a mobile title. Rayman Jungle Run is a quality endless runner with a $2.99 price tag and additional in-app purchases for new levels. Temple Run 2 is free-to-play, with numerous in-app purchases. Likewise, Sonic Dash and Sonic Dash 2: Sonic Boom are both free-to-play, with in-app bundles offering rings that players can use to unlock upgrades or new characters. And to move outside of endless runners, Minecraft: Pocket Edition is $6.99 on the App Store, with further in-app purchases for skin packs.

I'm linking these games to show their overall reviews versus those for Super Mario Run. The point isn't that these games are better than Super Mario Run, it's that their presentation aligns with the expectations of the existing market. Nintendo tried to get the benefits of "free" without taking into account what that label entails.

All that is even before we get to mobile price expectations and if mobile consumers feel $10 is too high for what Super Mario Run offers.

None of this means Super Mario Run won't be a success, merely that its success is muted. Nintendo's stock price was riding high on Super Mario Run expectations, so this could be seen as a correction. The company can also make it somewhat clearer to consumers that the price tag is coming in the future. Nintendo just misjudged the market a bit on its first shot; I expect the company will learn the second and third time around.

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Mike Williams

Reviews Editor

M.H. Williams is new to the journalism game, but he's been a gamer since the NES first graced American shores. Third-person action-adventure games are his personal poison: Uncharted, Infamous, and Assassin's Creed just to name a few. If you see him around a convention, he's not hard to spot: Black guy, glasses, and a tie.

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