It’s Game On Again for Nintendo’s Mobile Ambitions - The Wall Street Journal

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Jacky Wong

Jacky Wong
The Wall Street Journal
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Sept. 29, 2019 8:00 am ET

Nintendo ’s mobile journey hasn’t been smooth, but it is moving in the right direction.

Mario Kart Tour, the Japanese company’s latest smartphone game, is off to a good start. The racing game, which features Nintendo’s iconic plumber Super Mario and his pals, got more than 20 million downloads in the first 24 hours after its launch Wednesday—more than any of the company’s previous smartphone games, according to game analytics firm Sensor Tower.

Mario Kart Tour uses such a free-to-play model. Photo: kim kyung-hoon/Reuters

The Japanese game giant’s move into smartphones has so far been slow: it made less than 6% of its total sales from mobile devices last quarter. Nintendo has hesitated to fully tap into what is a huge and lucrative market: Mobile games are expected to generate $68.5 billion in revenue this year—nearly half of overall revenue in the industry—according to estimates from game data company Newzoo.

Nintendo has made some popular mobile games: Super Mario Run, for example, has more than 200 million downloads, but it has a pricing model—a one-off payment—that didn’t optimize its earning potential. Most mobile games are free to download and instead make money from selling in-game items. A popular mobile game can generate revenue of more than $1 billion.

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Promisingly, Mario Kart Tour uses such a free-to-play model. Players have complained, though, that Nintendo is being overly zealous in monetizing the game through such optional purchases. It offers a monthly subscription plan for $4.99 a month offering special items and exclusive content. The subscription model isn’t unusual, but Nintendo’s timing is inauspicious. Apple ’s new gaming service Arcade, announced two weeks ago, has the same price but is expected to include more than 100 games.

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While Nintendo may not have got the prices right at the launch, its confidence in the value of its franchises on mobile platforms and willingness to cash in should encourage investors.

Consoles will remain Nintendo’s bread and butter, and that business is doing well enough: it sold 178,000 units of its new hand-held Switch Lite in Japan in the first three days after its launch last week, according to Japanese videogame magazine Famitsu. The device, priced at just $200, is likely to be a big hit in the coming holiday season. Nintendo’s share price is up 38% this year but is still below last year’s peak.

A renewed willingness to add to its console success by tapping the world’s billions of smartphone users should further encourage investors.

Write to Jacky Wong at jacky.wong@wsj.com

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https://www.wsj.com/articles/its-game-on-again-for-nintendos-mobile-ambitions-11569758401

2019-09-29 12:00:00Z
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