Nintendo recently opened registrations for its new account system, named simply Nintendo Account. This represents a major, tangible step in Nintendo’s repositioning as a games company beyond its own hardware. Allowing users to sign-up via their Nintendo Network IDs (or other social-media logins), it creates a profile that will now engage directly with key Nintendo game content beyond the walls of first-party hardware.
Nintendo’s move into mobile has been long mooted, and due to become a reality in the coming months. The company’s first big presence will be its Miitomo virtual world/avatar platform, a destination for players to start creating their multiplatform identities. The market responded negatively to Nintendo’s announcement of Miitomo, perhaps expecting the company to rush its IP into established mobile-gaming templates. For us, the announcement of Miitomo made sense: It represents a recognisable entry point for established Nintendo fans, while remaining a simple proposition for newcomers. It allows Nintendo to start build a direct relationship with users, to improve its chances of retaining customer loyalty.
This topic of user ownership is absolutely fundamental in games, but rarely receives front row mention. It’s a core part of the story as to why some big-name companies have either risen or fallen, across the past decade. For example, let’s look at Zynga, a company founded in 2007, which came to tremendous attention in 2009 onward thanks to titles such as Zynga Poker and FarmVille. Zynga’s portfolio accrued a huge audience on Facebook, where it became a giant of the browser-gaming landscape, counting in excess of 100 million monthly users.
At the time, this led to immense valuations of Zynga, some as high $20 billion, but little attention was being given to the attributes of this userbase. Not just in terms user retention and monetisation, but also user ownership: Who did this audience belong to? Did players of Zynga’s games belong more to Zynga, or to Facebook? One of the reasons that Facebook found such accolade as a browser-gaming platform was because the costs of user acquisition were so low. Players would be automatically signed up to a game using their existing credentials as a Facebook user, rather than being prompted to sign up as a new, distinct user with each new game that they tried. Opportunity cost for users was slim, and so, their loyalty to any particular game or company may be just as disposable.
Over the past decade we’ve seen games find unprecedented audiences on non-specialist platforms such as Facebook and mobile. But the generalist role of these platforms makes questions of user ownership all the more pressing. Zynga certainly took advantage of Facebook’s burgeoning role as a browser-gaming platform, but it did not own this event. Zynga became aware of this need to exert a deeper sense of user ownership, and launched its own dedicated portal (Zynga.com) in 2012. Soon, the company’s broader issues began to show: it was late to move into the match-3 genre which was about to be dominated by Candy Crush Saga, which would help propel King to new heights as one of the biggest game operators around. And it struggled to move into mobile just as Facebook itself was making a fundamental shift in the kinds of devices upon which is was consumed. We believe that Zynga’s vulnerabilities here were compounded by how little user ownership it had managed to cultivate.
Numerous game companies tend to understand the importance of user ownership, which is why a large publisher like Electronic Arts will have implemented such initiatives as EA Access and Origin. And it's also why it has made great investment into back-end infrastructure designed to manage its relationships with users at a new, intricate scale. Having a company such as EA introduce its own social layers into the experience of a console user, say – who already has a social-profile relationship with the console manufacturer – carries a short-term risk. The user may dislike this extra layer of signing up and logging in, but will still adopt, if they feel that there’s fair-value exchange introduced the process. For the publisher, the upshot is that it has developed a more direct relationship with the people who play its games. This process is not going to be a swift nor simple one, and the sooner companies move to strategise for it, the more ground they can potentially gain.
With Nintendo moving out into new but highly competitive pastures, a failure to consider user ownership now may be very costly further down the line. With the recent introduction of the Nintendo Account system, some fans feel that this is too little, too late. We would agree that Nintendo has been slow to move on the various digital opportunities out there, but also that such inertia exists for a reason: Nintendo is ultimately an IP company. Hardware is transitory, but the value contained in its IP represents decades of investment and development, and anything that dilutes this trove of IP is an uppermost threat to Nintendo’s business. It will not make the move to mobile lightly, which may frustrate the market, but is exactly what will it allow it to find powerful traction in a heavily-saturated landscape. Without such careful movements – and without its new Nintendo Account system, among other things – we would think Nintendo’s chances of finding sustainable success to be diminished.