Nintendo’s shares fall 5% after Super Mario Run release

Super Mario Run might be the top grossing app in eight countries right now, but Nintendo’s shares have fallen 5 per cent following its launch yesterday.

According to Sky News, Nintendo’s market value fell by 1.6 billion ($2 billion) in Tokyo today, although it later recovered to a 4 per cent drop at close of trading.

Super Mario Run launched on iOS late yesterday afternoon in the UK, in addition to another 150 countries around the world, including the US. It quickly soared to the top of the download charts in several countries, including Japan, Germany, Australia and the UK, but some analysts have voiced concern over the app’s price and its current lack of availability on Android.

The first three levels of Super Mario Run are free to play, but players in the UK will then have to pay 7.99 in order to access the full version of the game. In the US, it costs $9.99.

"The main concern for investors right now is whether consumers are willing to part with $10 to unlock the full game," Niko Partners analyst Daniel Ahmad told MCV.

"The upfront cost is something rarely seen in mobile games today that are targeting a large player base, as Nintendo clearly is through the promotions on the app store and use of their most popular mascot. The spending cap is certainly being seen as an obstacle stopping Nintendo from generating revenues as high as Pokmon Go back in July.

"We’ve seen a number of complaints around the price of the game, especially on the app store where a number of 1 star reviews have been left by users for this reason. We’ve also noted that the first three levels can be completed very quickly and that players may not have had enough time to really play the game before hitting the mandatory paywall to unlock the full game. The payment screen is also quite confusing as it doesn’t explicitly state the the $10 is a one off payment to unlock the entire game.

"The game is already the top grossing title in the UK which shows there is a willingness from many Nintendo fans to pay the $10 to unlock the full game. However, it remains to be seen if the wider mobile gaming audience will jump in and pay too."

The requirement to always be connected to the internet is another concern.

"The launch is typical of Nintendo’s strategy," IHS’ mobile gaming analysts Jack Kent told MCV. "It has taken a long time for Nintendo to make the move to mobile and it has been careful to protect the image of its brand. But there may some issues with the requirement for the game to be always connected to the internet – which will limit the games experience for commuters and those in areas with poor connectivity.

"Brands are increasingly important on mobile – it is very difficult, and can be very expensive to acquire users to have a mobile hit," Kent adds. "Nintendo is not following the typical mobile games business model. While the game is available as a free download Nintendo is only offering a few levels and hoping to encourage users to pay for an upgrade to the full game experience. This may mean it will not match the sustained revenue success of many games at the top of the app store charts – which drive on-going revenues through virtual currencies and in-app purchases."

On the whole, though, Kent sees Super Mario Run as a positive thing for Nintendo in the long-run.

"Nintendo needs to go to mobile because that’s where the audience is. Mobile is the fastest growing segment of the games market and while Nintendo previously had great success with more casual games with mass appeal on the older Wii and handheld 3DS consoles, much of this audience has shifted to smartphones and tablets.

"There will be a lot of pent up demand for Mario on mobile – and we’ve seen what that can mean with Pokmon Go – but it’s also a good way for Nintendo to introduce its games to a younger audience."

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