The monetization mistakes that tripped-up Super Mario Run

It’s been two years since Nintendo’s iconic plumber made his mobile debut and, according to new data from Sensor Tower, Super Mario Run (SMR) has just punched through the $60m revenue mark.

While most developers could only dream of making that sort of money, for Nintendo the bar of success is quite rightly set much higher.

When you consider the huge global brand power of Super Mario alongside the booming popularity of mobile gaming, SMR should have a been a license to print money and a revenue record-breaker for the mobile games industry. Instead, the game has failed to meet Nintendo’s expectations and will have to be chalked up as a commercial failure, generating the least revenue of any of Nintendo’s mobile games.

For context, Pokemon Go has earned $1.8bn within the same two year period while Fortnite is delivering  $1m a day on mobile. With so much love out there for Mario, why haven’t mobile gamers shown him the money?

SMR is actually a really fun and well-made game, receiving impressive reviews across the board on its release. You don’t have to be Sherlock Holmes to realize that it’s the game’s monetization strategy which is all wrong.  

Instead of adopting the Free-to-Play (F2P) model which is commonplace in most mobile games today, Nintendo instead decided to experiment with a Free-to-Start (F2S) approach - a mistake which looks to have been a costly one.

Here are five mistakes that tripped-up Super Mario Run’s monetization potential:

1.  Poor onboarding
Not only has Super Mario Run ignored advances in F2P commercial best-practices, it has overlooked the importance of a slick onboarding process. 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 in order to link accounts or negotiate a giant list of countries.

Whether F2S or F2P, it’s essential that players are able to make it through the onboarding with enough of a positive sentiment about the game to make a payment. This is even more important in F2S as, once a player reaches the pinch point, they have very few options ahead of them.

2. Lack of whole base monetization
The power of the Super Mario brand and the hype surrounding the game’s release meant that Nintendo didn’t have the same user acquisition challenges that other games face. SMR was always going to attract millions of players but, with only one microtransaction opportunity, Nintendo’s whole strategy was based on it achieving epic levels of conversion.

In F2P, you have an average conversion rate of around 2%. Even if SMR achieves a fantastic 10% conversion rate, that’s still 90% of it’s players being discarded with little reason and without being monetized through a defined mix of IAP, ads and social user acquisition.

3. Too eager to monetize
We know from our own data and F2P experience that players who pay later, pay more.  It’s all about getting players to reach the threshold of engagement where spending money to improve their player experience seems all the more attractive.

However, with SMR, players really don’t get enough of a chance to experience game elements like Toad Rally, the Bonus Game House, and Kingdom customization before being pressurized to monetize.  

With such a limited amount of free content, it should be essential for Nintendo to clearly signpost all that it has within its onboarding process, before pressing for first payment. Instead, pushing for early conversion has impacted its long-term monetization.

4. Sky high pricing
In SMR, players are required to make a one-off microsaction of $9.99 to unlock all the levels, characters and toad colors. However, by choosing this price point Nintendo has forced itself between a rock and a hard place.

For many players $9.99 is just too expensive, especially as a first payment. However, $9.99 also falls way below the average revenue per paying user in F2P which is around $26. In addition, the conversion rates in F2P are in the order of 1.8 percent on Android and 2.6 percent on iOS.

Therefore, if the SMR F2S model had any hopes of outperforming F2P without additional IAP, with a $10 price, it would have needed to consistently achieve conversion rates that outperform F2P by a factor of three - a tall order indeed with the current on-boarding and early payment mechanisms currently utilized. Clearly, SMR failed to achieve this.

5. Poor post-purchase retention
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 feels like a throwback to the days when post-purchase retention didn’t matter.

Summary
It looks like Nintendo has been quick to learn from its costly FTS mistakes. Each of its subsequent mobile games have adopted the more traditional F2P model with its third mobile game, Fire Emblem Heroes, generating five times more revenue in its first year than SMR.

Caring about conversion rates and post-purchase retention clearly didn’t come naturally when Nintendo took its first foray into mobile with Super Mario Run. However, price and conversion rate are critical factors in that evaluation but they probably couldn’t charge any more so that leaves conversion and therefore player retention as the key to success.

Mario is set to return to our smartphones later this year with the launch of Mario Kart Tour (MKT), Nintendo has another chance to make a successful game that fully exploits the global appeal of the Mario brand. However, with Isao Moriyasu (CEO of Nintendo’s mobile partner, DeNA) stating that MKT will be a free-to-start game, is lightning set  to strike twice?