This last week, Nintendo made the announcement that they would begin making games for phones and tablets. This is news that seems like an inevitability for one of the longest tenured and most innovative game companies in the world, but they had always been hesitant to do so, to the point of apparently outright rejecting the concept. Because of that stance, the news does take the industry by surprise. But the news doesn’t just involve Nintendo. They are partnering with Japanese mobile game publisher DeNA, who have a long history in the mobile free-to-play market. The really strange thing about this news, though, is that I have not seen anyone react to this news correctly.

I have seen people praising the deal, ecstatic that Nintendo is getting into the mobile space, and moreover that they are showing signs of accepting the free-to-play model. On top of that, with DeNA specifically, that someone else would be designing their sign in system, since pretty much no one likes the whole “friend code” thing.

I’ve seen people crying out and gnashing their teeth at Nintendo reaching into the free-to-play market, as they buy into those persistent myths about the evils of the medium.

The Players: Nintendo

We all know them. It’s the company that rescued our art form from the 1984 crash, family friendly, and innovative to a fault. They’ve spearheaded so much to advance the medium from a viable hand held console, to the analog joystick and rumble feedback, to touch screens as a game interface, to accelerometer motion control. I would even go so far to say that the Virtual Boy was the same concept as an Oculus Rift WAY too far ahead of its time.

And then there’s what their hardware could have done with a bit more creativity:

Yes, this aside was just an excuse to share that video. WHY DID NO ONE USE THAT

The trouble comes in when they are not in control of the bleeding edge, and they almost seem to avoid the orthodox out of spite. They stuck with cartridges for the N64, avoided full HD with the Wii, and seem to have wanted the Wii U to take the place of tablet gaming.

On top of that reluctance, Nintendo has always been very interested in controlling the hardware side of the experience as well. With a few exceptions, some infamous like the CD-I Zelda games, they have never been prone to having their intellectual property appear on someone else’s hardware.

Look upon it and know despair

The Players: DeNA

DeNA is a name that is not as well known to western audiences. They are a publisher of primarily free-to-play mobile games. Some players may be familiar with the name of their publishing service, Mobage, which is the banner under which their mobile games are released. Many of their most successful games are card battle games, with a few that branch out from there. While I believe most of their income comes from eastern markets, there are also a number of distinctly western titles they support. They’ve published games like Blood Brothers, Transformers: Legends, and even Peter Molyneux’s Godus.

The Mobage platform is run through an SDK that is installed into all supported games. It is intended to serve a number of functions, such as an incorporated billing system, tool to cross promote games in the Mobage system, and sign in service. Players can have one Mobage sign in that will serve to identify their game accounts across all Mobage titles. Players can buy Mobocoin, their proprietary premium currency, and this currency can be spent in any Mobage game. Actually, I believe that Mobocoin is only for Android devices now, but if they can get it working on Apple devices, they certainly would. And then there is the cross promotion. The player can see links to other recommended Mobage games. You can also earn some free Mobocoin by downloading and trying some promoted games.

So, this sounds like an OK situation right? Nintendo is finally getting on board, stretching into a new market, possibly loosing their grip on the hardware restrictions? Well, let’s just say there’s a reason this exists:

What Changed? Why now?

I’ll get back to the Mobage thing in a moment, but I would like to acknowledge that this move by Nintendo has not come from out of nowhere. There have been a few baby steps in the direction of embracing mobile, and the free to play model.

Nintendo released Pokemon Shuffle, a free to play puzzle game on the 3DS., and collaborated with Gung Ho to release a 3DS port of Puzzle and Dragons, one of the biggest mobile games in the world, with the original game, and a Mario themed re-skin alongside it.

Those two releases alone show that Nintendo is willing to at least dip a toe into the free-to-play model, and are not inherently disdainful of play mechanics that work on a mobile platform. Really, if you think about it, they really shouldn’t have a problem with the controls of a mobile platform since Nintendo PRETTY MUCH ESTABLISHED THEM AS VIABLE IN THE FIRST PLACE. Seriously, touch screens and motion controls, that’s the DS and the Wii.

Just think about it, how awesome would it be to have a Kirby game on your tablet? He already has games like Canvas Curse that exclusively use the touch screen for control!

Finding this literally took more research time than anything else in the article needed.

So, the only surprise should be showing any willingness to release on hardware that they do not own, and considering the struggles with the Wii U, and how that seems to have been an attempt to bring in what tablets do, just abandoning pretense and accepting a platform someone else built off their ideas seems a little like bowing to reality.

What’s wrong with DeNA?

Now to explain the Mobage Memes…

Sometimes I wonder

Ok, this is rant time, so strap in. If you’ve listened to the Point Streak episode on Quality Assurance, we touched on the topic of the difference between the publisher and developer, and the relationship between them. As a consumer, it can be a bit tricky laying the blame when the lines are blurred. For example, don’t complain to Namco about something From Software did with Dark Souls. So, some users who don’t like Mobage services, it’s possibly something that the developer is responsible for. Although, Mobage does also develop some games themselves, and in that case it should just be open season on whatever players think is wrong, since fault starts and ends in the same place.

However, being in the industry, and having worked on Mobage in the past, I can tell you that even if what made these meme images was just a misinformed frustration, they are still deserved. This is because, with respect to the Mobage platform, there are some things where the publisher is actually harming the developer. Some of these are obvious, some less so.

Mobocoin

First of all, let’s discuss these free Mobocoin to incentivize people to play other games. This is one of those ideas that sounds nice on paper, and when you actually start to think about what’s involved it just falls apart completely. Incentivized installs are some of the worst users you can possibly get. Generally they’ll just play long enough to get their reward, and then bail. The only reason they were there in the first place was to get the reward, so why should they stick around? Sure, you got some more eyes looking at the game, but since there’s no reason to think that the player of one game would necessarily like another game the percentage of new users that continue to play will go down. This means that even if your total users does go up, your user retention analytics will look worse.

I do need to be fair here, though. Most of the problem will come from when the player jumps genres. As I said above, Mobage’s success is mostly in card battle games. So, if you are a card battle game, you’re more likely to get quality users than if you’re a puzzle game, or an RTS game.

An additional problem comes up with Mobocoin, though. It is vitally important to know how much money is being made in a game, where players are buying things, why they are buying them, or anything else that could affect the patterns. Mobocoin is a system that, intentionally or not, does a hell of a lot to obfuscate that from developers and puts all of the control into DeNA’s hands. When does the developer make money? When the Mobocoin is purchased? When it’s spent in game? If it’s when it’s spent in game, does it matter if the player earned these for free on other games? This is a currency that crosses multiple games as well as multiple real world currencies. Calculating exchange rates is horrifying enough on its own, and now we’re adding different games to it? This seems diabolical almost, but I’ll apply Hanlon’s razor (Never attribute to malice that which can be adequately explained by stupidity.) and say that this is a system that was intended to encourage cross game spending, but in practice has allowed Mobage to get lazy with information sharing, and they’re just rolling with it.

Ok, that was just the Mobocoin, but there’s more.

Login

Second, there’s the sign in functionality. Users hate signing in to mobage. On my very limited sample size of a couple games, we saw nearly a third of users just bail the moment they saw the first Mobage screen. They could have enjoyed the game, but they didn’t want to give up an email address, or spend time creating a password, or whatever. The login prompt was an in your face interruption to the flow of the game in its most sensitive period.

If you’re trying out something new, maybe you’re curious, maybe a little excited, maybe bored, whatever your mindset, unless you’ve got word of mouth telling you this game is great, your first 10-30 minutes with a game can be the most critical, especially for a free to play game. You’ve grabbed this thing, and you’re letting it take you through the paces as it introduces itself and teaches you a little about it. You may already know what it’s getting at, but the game can’t make that assumption, so you either learn, or let it go through its usual spiel while you get a bead on what it has to offer. Extending this metaphor of introduction, the whole time, the game is nervous that you won’t accept it and will leave, so it’s doing everything it can to be interesting, welcoming, and engrossing or immersive. Then, all of a sudden, something else swoops down, smacks the player in the face breaking their engagement and saying “We need you to register now”. That can be so jarring to a player that they just don’t want to deal with any of this.

You wanna get smacked in the face with this thing?

Then again, there are others who may have just had bad experiences with other mobage games and when they see it in the game don’t want any more of it.

Platform Stability

Third, this whole system relies on the Mobage SDK. This is some code that is entered into the game that inserts the billing, the sign in system, and so forth. This is a layer that must be kept up to date, or else these systems may not work.   You should be able to see that if signing in or billing is broken, no one is going to be happy with the status of the game.

Ideally, updating this SDK should be easy. The developer should be able to pop out the old one and enter the new one. However, because it has such a far reaching impact on the game, this isn’t always the case. Updating the SDK can cause a lot of headaches for engineers, I’ve seen it happen.

On top of that, since the systems are tied to Mobage servers, if Mobage has a service interruption, everything is down. As a developer, this is terrifying, because you have a period where everyone is scrambling trying to find what the problem is. You don’t know where it is, and it may have to do with your game. Then you check and see if other Mobage games are down, and you see they are, and every Mobage developer turns and starts to crush them with requests to get everything back up!

They may have improved it since I was involved with it, but I would not exactly characterize the service as “fully reliable”

Business – User Acquisition and KPIs

The fourth thing has nothing to do with the player experience, and everything to do with business. I mentioned earlier, in multiple places actually, how the Mobage system can cause players to come in briefly, then leave, either from the free Mobocoin, or from players not getting past the sign in. This wreaks havoc with those retention numbers, and retention is a very important key performance indicator, or KPI.

KPIs are ways to break down the health of the game. If for every 100 players who try the game only 5 ever touch it again, that’s a very poor retention KPI. If 80 continue to play, that’s a strong KPI. The exact numbers will vary based on a lot of factors, such as genre, location of the player, device the player is on, or how the player got the game in the first place (hint hint), and so on. There are also more KPIs than just retention, but this is the one most obviously impacted here.

Mobage, at least in my experience, controlled the money for user acquisition, and would not spend much, if anything, unless certain KPIs were met. Now, this is actually a reasonable practice. There’s no need to spend money on a game that won’t make it back. However, you do need to have enough players in the game to have statistically meaningful statistics in the first place. If you can’t get that much then you’re screwed.

You also need to have stable KPIs that are set in stone.  You can’t have a business where the goal posts move.

Finally, the big one, if one of your KPIs is going to be retention, and retention really should be one of them, then it should take into account all of the people that are going to be lost because of the system being used! You can’t expect 60% of users to come back on day 2 when 30% bail because of the log in screen.

That may look like an exaggeration, but it isn’t a joke. While those aren’t the real numbers, those are pretty close to numbers that I have come across. Mobage was holding a game a retention level that the Mobage system itself was making pretty much impossible. And this doesn’t even take into account the bit where the KPIs were not set and would change. So, as a developer, it was more or less impossible to meet the performance expectations, meaning no advertising was done, so no new users would come in.

That is setting the game up for failure.

Player Traffic

Why would Mobage ever do this? It doesn’t seem productive for anyone. I can propose two possibilities. These aren’t mutually exclusive, so both could be the case.

One. My experience could be atypical. We may have had an exceptionally bad deal and they don’t hold other developers to unreasonable KPIs, and they don’t change things around on them.

Two. Mobage wants to cast a wider net for players and direct them to the games that make them money. Because they cross promote games, they can spend their time directing players to their popular, proven to be successful games. With that in mind, every game released is essentially another advertising tool. They control all the levers on the back end, and naturally they will try to leverage this to its fullest potential. The cross promotional tool has limited space to present, so they wouldn’t want to send users to a game that isn’t making money. You can look at that as reasonable and pragmatic, but also a bit insidious in how it kind of robs from the poor to give to the rich.

What this means for the Nintendo deal

At long last, back to what brought us here today. With all of this unpleasantness that can be laid at the feet of DeNA, why would Nintendo choose to partner with them?

The most obvious possibility is a side effect of nationalism. Nintendo has always been a very Japanese company. DeNA is very successful in the Japanese market, with titles and products that appeal to Japanese consumers. It’s possible that Nintendo simply doesn’t have the perspective to see how DeNA appear outside of that context.

Another possibility, and one that I think is far more likely, is that Nintendo is not going to be working with DeNA on the Mobage platform. This is not going to be a normal situation for DeNA by any stretch of the imagination.

This is not a partnership that was entered into lightly. They each purchased 22 billion yen of each other’s stocks, meaning Nintendo owns 10% of DeNA, while DeNA only owns about 1.5% of Nintendo. The Big N has the leverage and could do some serious damage if they aren’t happy.   That might be why Nintendo went with DeNA, as they may have been the ones willing to accept the terms Nintendo laid out.

So, while I have a very low opinion of DeNA, and I think Nintendo could have found a better partner to work with, I wouldn’t classify myself as upset over the deal.  I do think DeNA doesn’t deserve this opportunity, but Nintendo has always been about the disruptive and the unorthodox, and they have had a lot of success with it. I don’t think that their entry into the mobile space will be as straight forward as porting their IP to a phone with in app purchases. Something interesting and creative will happen.

Furthermore, since Nintendo has always had an affinity for controlling their distribution pipeline, like with their hardware, I feel like the DeNA partnership is one of convenience for Nintendo. This would be to get them past the introductory period to the market. When that’s through, we’ll see if they divest themselves from DeNA, or purchase the rest of DeNA, or what. It doesn’t strike me as Nintendo’s long-term plan to continue relying on another party when they really don’t have to.

I just hope this doesn’t end in a merger called “NintenDeNA”. I feel dirty just having thought of that.

Kynetyk is a veteran of the games industry.  Behind the Line is written to help improve understanding of what goes on in the game development process and the business behind it.  From “What’s taking this games so long to release”, to “why are there bugs”, to “Why is this free to play” or anything else,  if there is a topic that you would like to see covered, please write in to kynetyk@enthusiacs.com