Revenue lag slowing Super Mario’s run

New Nintendo mobile app may earn limited profits due to pay-to-play model

Super Mario Run, Nintendo Co.’s first full foray into the world of mobile gaming, might be encountering some growing pains.

The game was at the top of download rankings in 68 countries, but was the highest grossing game in only14, according to researcher SensorTower. Nintendo shares closed 4.2 per cent lower in Tokyo, wiping out about $1.5 billion (U.S.) in market value. Partner DeNA Co., which helped develop the title, fell 6.8 per cent.

The game, which features the company’s iconic plumber running across a scrolling landscape to rescue Princess Peach, provides free access to the first three levels, but requires a $13.99 payment in Canada to unlock the remaining 21 levels as well as other features.

That’s a departure from the world’s most profitable mobile games, which are free-to-play but encourage users to buy items. Super Mario Run also came out late in the day, and users aren’t expected to start paying until they finish the first levels.

“Having a fixed price tag means profit will be limited because smartphone games make big money through free-to-play features,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. “Still, the low revenue rankings, especially in Japan, may be because the game was released only” a few hours ago, he said.

Within 12 hours of its release Thursday, Super Mario Run reached No. 1 in revenue rankings in the U.S. and 27th in Japan, up from seventh and 107th immediately after the release, respectively. The U.S. and Japan are the world’s second and third-largest app markets, according to researcher Newzoo.

“I wouldn’t be surprised if players choose to see how much enjoyment they can wring out of those first three levels as possible before making the decision to drop $10,” said Randy Nelson, head of mobile research at SensorTower. The game costs $9.99 in the U.S.

The release is a test of what the game maker can achieve after years of eschewing the mobile-app market. While Nintendo gave a hint of its potential with the success of Pokemon Go, that title was only partly its own creation. Super Mario Run was developed mainly by Nintendo, with some assistance from partner DeNA.