TOKYO—Investors disappointed by early reviews and sales
of the smartphone game “Super Mario Run” sold more Nintendo Co. shares
Monday, with some analysts expressing concern over the game’s
payment model.
Nintendo shares finished down 7.1% in Tokyo Stock
Exchange trading, extending a losing streak to five days, during
which the stock has fallen more than 16%. The stock had risen more
than 20% in the space of a month before beginning the slide.
“Super Mario Run,” featuring the Kyoto-based company’s
most famous game character, was released last week for Apple Inc.’s
iPhone and other iOS devices. The app, unveiled by Nintendo game
creator Shigeru Miyamoto at an Apple event in September,
is free to download but requires $9.99 to unlock all
the features.
Initial reviews on Apple’s App Store were below par and
sales missed expectations in some markets. The game didn’t gain the
No. 1 spot in Japan, one of the world’s largest smartphone game
markets, though it landed that position in the U.S.
and elsewhere.
After a sharp run-up in Nintendo’s stock price ahead of
the game’s release, analysts said the negative news prompted some
investors to close out bullish bets.
Nintendo plunged into the smartphone game market this
year after many years of avoiding it. The poor performance of the
company’s flagship console, Wii U, prompted investors to encourage
the company to offer smartphone games featuring popular characters
such as Mario the plumber.
Expectations for the Mario app were heightened by
the summer craze for “Pokémon
Go,”a free-to-play smartphone game developed by a Nintendo
affiliate.
But analysts pointed to differences between “Super
Mario Run” and “Pokémon Go.” The Pokémon game earns revenue from
small in-app purchases by players, such as virtual incense to lure
the animated creatures appearing on screen. Co-developer Niantic, a
spinout from Google parent Alphabet Inc., has
been adding fresh content to keep players’ attention.
The Mario game, on the other hand, gives players only
one chance to pay—the $9.99 charge to advance to the game’s higher
levels. A Nintendo spokesman said the company didn’t plan to
release additional content, either free or paid.
“If you were hoping that Mario would perform like
Pokémon, then Mario clearly didn’t achieve its mission,”
said Hideki Yasuda, an analyst at Ace Research Institute.
“But that was placing expectations too high because the Mario
game’s business scheme is so different from Pokémon.”
Research company SuperData forecast that the Mario game
would generate as much as $15 million in its first month, while
“Pokémon Go” and other Pokémon merchandise helped Nintendo boost
operating profit by about $100 million in the July-September
quarter, when the game was released.
The Mario game isn’t available yet on Alphabet’s
Android operating system, meaning at least one more big tide of
revenue can be expected. But poor reviews on the Apple platform may
hurt Mario’s performance on Android, said Motoi
Okamoto, a former Nintendo game director.
Mr. Okamoto, who said he has already finished the Mario
smartphone game, said that it was well thought out but its payment
structure wasn’t ideal. Players who see that the game is free to
download may get an unpleasant surprise when asked to pay $9.99
after just a few levels, he said.
“The game should have either asked players to pay when
downloading or given more free content if they were to pursue a
free-to-download model,” he said.
WSJ