So It Turns Out, #15: You're Playing Animal Crossing on a Phone, You Just Don't Realize it
Also, the continued journey of the UK contact tracing app
Hi,
So here are some things I’ve been thinking about lately.
Nintendo does sell smartphone games. They just don’t want you to know that they’re selling smartphones:
From Bloomberg, we have a report that Nintendo is retreating from smartphone game development:
President Shuntaro Furukawa proclaimed two years ago that smartphone games would be a $1 billion business with growth potential, building on his predecessor’s promise that Nintendo would release two to three mobile titles each year. That spurred hopes among investors that the gaming powerhouse could carve out a substantial slice of the market. In May, however, the president adopted a markedly different tune, saying “We are not necessarily looking to continue releasing many new applications for the mobile market.”
This might seem odd to many readers, who may assume in recent quarantine weeks that Nintendo exists only as a company to support your Animal Crossing fix:
Still, if you talk to enough folks in the gaming industry, you’ll hear a certain point of view — that Nintendo is just unable to do mobile games. In fact, many of its most popular mobile games have been partnerships with other companies, where they brought the tech and Nintendo brought the brand IP, such as Super Mario Run with DeNA or Pokemon GO with Niantic (which is a Google spinoff) [1][2]
Except, well, this is a dramatic misread.
It’s true that Nintendo is bad at mobile games monetization. The so-called “free-to-play” (F2P) model where you don’t pay to install the game, you only pay for cosmetic or functional microtransaction (MTX) content, is not something Nintendo really does directly. T They’re much more comfortable, whether for principled or practical reasons, to monetize users up-front, as is more common in console games; they rarely even sell expansions or downloadable additional content. Pokemon GO is a notable exception, but as alluded to above, was really a IP re-skinning of a game that Niantic had already developed, Ingress; and frankly, at launch, Pokemon GO’s MTX mechanics were really underdeveloped.
And, well, even if you succeed at mobile games, you’re still paying a huge chunk of all revenues to the mobile app store provider (e.g., Apple App Store, Google Play Store, or 3rd-party Android stores in places like China), which is generally reported to be a 30% share. That’s tough to swallow.
But, well, challenges with adapting to F2P and MTX models aren’t some sort of special Nintendo thing. This is also true of lots of Western developers; the entire org and business structure of a F2P game, especially if on mobile, is just really different than the historically dominant model where users bought discs at big-box stores on Black Friday.
But what Nintendo actually did wasn’t to give up. They found a way around their problem, and you didn’t even notice it.
*****
Think of your phone. How many minutes a day do you spend on actual phone calls, by which I mean, you type in a number issued by the phone company and engage in a voice conversation with another person on a normal cell phone line? Probably not as much as you used to, even excluding the recent rise of Zoom. We may still use phone numbers as identifiers (e.g., for WhatsApp or iMessage contact lists), but, well, we don’t call people very much. We carry around pocket supercomputers with internet access that we call phones, for tradition’s sake.
And as a result, the supply chains for their components — screens, processors, high-efficiency batteries, flash memory — are truly massive, and have achieved incredible efficiencies of scale. Traditionally, we think of these efficiencies as being only used for phones, or tablets, but it turns out that plug-and-play components are, well, plug-and-play. And a few years ago, Nintendo realized that.
The Nintendo Switch, allegedly a “console,” is really a phone. One that doesn’t have a cellular modem for phone calls, only a Wi-Fi and Bluetooth set of chips to access your local router. But almost all of its components come from smartphone supply channels (excluding some custom design work like the detachable joysticks). Heck, hackers can even get Android running on it, with a little bit of work. That means that the Switch probably has better margins that most consoles (which famously are sold below cost in a razors-and-blades model); in fact, it’s possible that they’re even sold at a profit.
And because Nintendo controls their IP, they get to use it to draw in audiences that want the deep, immersive worlds that Nintendo’s built up over decades. Want to play Zelda? Gotta own a Switch. Curious about the new Super Mario? That’s a Switch. Want to play some quarantine Animal Crossing? That’s definitely a Switch. Why launch a game on mobile with a F2P model and give up a 30% cut of any MTX, when you can sell it full price on your own platform?
And on top of that, they’ve built an app store of their own to allow you to buy games from 3rd parties, like Doom or Minecraft, and even to download F2P games and monetize on their MTX, like Fortnite. And Nintendo gets a cut of all of those.
So: you’re playing Animal Crossing on a phone. You just didn’t realize it.
Update on the UK’s contact tracing app:
As longer-time readers know, we previously have discussed how contact tracing apps demonstrate that certain tech firms have significant ability to shape the actions of sovereign states. (Previously) The UK’s contact tracing app — and their reversals to attempt to comply with Apple/Google’s privacy requirements to avoid the surveillance apocalypse — has been especially demonstrative.
But it turns out, too, that the contact tracing app is also demonstrative of all of the problems of when governments try to do IT, per MIT’s indispensable Technology Review:
There were other factors that led the UK toward developing a centralized app: its limited testing apparatus and relatively small number of human contact tracers meant that the system might be quickly overwhelmed if it was alerted to every notification of a potential positive case—while a centralized model based on confirmed cases rather than suspected ones was more in line with capacity.
Meanwhile, officials were looking for glory (and even knighthoods), and ministers were focused on rolling out a “world-beating” app, rather than just a successful one, so that they could claim victory on the world stage. The momentum toward a centralized system became unstoppable—and the challenges of building one were largely brushed aside[…]
[…]Progress on the UK app actually went better than some skeptics thought it would: developers found tricks that helped it sort of work, at least on Android phones. But “sort of” isn’t good enough for a tool intended for widespread deployment during a global health crisis.
So more than a month ago, the UK government quietly commissioned a team to start developing a second app that used the decentralized model. The two competing systems were developed in tandem, at substantial cost.
This coincided with a chaotic series of reorganizations in top management of the UK’s broader track-and-trace efforts. New bosses came in, and the agencies responsible for different parts of the effort were swapped around, all of which left the broader tracing program confused and disconnected: at various points the scripts given to contact tracers didn’t even match those in the apps.
In other words, the UK has managed to ensure that their contact app is not only an example of the challenges of privacy-respecting software development, they’ve also decided to demonstrate why governments are generally pretty awful at software development, too. Spoiler: trying to procure software the way you procure aircraft carriers doesn’t work.
Although, I suppose, the UK isn’t great at procuring aircraft carriers, either…
May this birb bless your timeline:
Please enjoy these fuzzy goofballs:
And be sure to dry your space observatory cat, for best results:
Other news:
The US Marines tested a Skateboard Unit in the 1990s.
The late Carl Reiner had the best theory of how to know movies were good
Excellent Welsh prehistory content
What would happen if you analyzed every state’s benefits signup process? Code for America found out.
Footnotes:
An earnest attempt to reduce the digressions in my prose
[1] Also, Nintendo doesn’t own all of Pokemon, only about 1/3rd of it. After Pokemon GO launched and was briefly omnipresent, Nintendo’s stock fluctuated wildly from people who didn’t fully understand that fact…
[2] Also, Pokemon GO is officially good again, apparently.
Next time on Dave Kasten:
Are kpop stans a strategic national resource?
Disclosures:
Views are my own and do not represent those of current or former clients, employers, friends, or my cat.
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