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Friday, September 19, 2014

The Incentive To Migrate To Apple

By LUDWIG VON KOOPA - From the perspective of, say, Capcom.

Apparently, the Apple iPhone 6 came out today. And every Apple slave in the world bought it. Or tried to, because of that whole artificial shortage thing I briefly mentioned at the beginning of the week that Apple loves to do. You can actually see the same type of phenomenon that happened with the Super Smash Bros. For 3DS Club Nintendo codes happen with the iPhone 6.

By the way, the demo is out today on the Nintendo eShop. For free. Bet you feel stupid for buying it off someone else, huh? (Of course, you're on KoopaTV, so you can't be that stupid, right?)

So on that note, it's about time to talk about Apple again after I wrote the piece about Capcom betraying the 3DS by putting Phoenix Wright: Ace Attorney - Dual Destinies, a 3DS exclusive (a very good one at that), on iOS devices. Same subject, actually. Different perspective. You see, rather than portray Apple as the villain, Nintendo as the victim, and Capcom as an abettor, what if you turn the situation on its head?

What if Capcom was incentivized by the Nintendo eShop policies to move their business elsewhere? What if those policies are crippling Ace Attorney's sales? What if Nintendo purposefully designed the eShop to restrict sales of games like Capcom's Phoenix Wright: Ace Attorney - Dual Destinies? What if Capcom isn't the only victim here? (Besides, you know, all of the customers.)

With that kind of treatment from Nintendo, can you really blame Capcom for moving to the more friendly iOS store environment? Friendly in the ability-to-make-sales way. Not the player reception way (something addressed in the last article). After all, Apple has much less restrictions, and to top it off, they rated the game as 12+, unlike 17+ with the ESRB. So you don't have to do ridiculous workarounds by calling Nintendo to get your NNID changed if you're underaged! (By the way, this guy on Miiverse, Bala, credits KoopaTV for instructing him on doing that workaround. You're welcome! He recognized the problem! And KoopaTV provided the solution. That's what we do.)

Businesses work by incentives. You can absolutely compare the Nintendo eShop and the Apple app store to, say, different countries' tax codes. As I've said many times on KoopaTV, the tax code for the United States is an absolute mess, and we have the highest marginal corporate tax rate in the civilized world. So companies have incentive to incorporate elsewhere and do corporate inversions (acquiring another company in a foreign country and moving your headquarters there so you're under their tax laws and not ours) to avoid paying a high amount of taxes. After all, a business's purpose is to serve shareholders and make a profit. It's not to give President Barack Hussein Obama (or any other government official) more money to waste!

Same principle. Nintendo is sending signals to Capcom and other (potential) developers for their systems by making the eShop a mess to sell things with. Particularly guys selling things like M-rated digitally distributed content, but there are some other issues with the eShop that are outside the scope of this article. Anyway, Apple gives a much friendly business climate. So Capcom moved their business. It's unfortunate, but Nintendo was basically saying, "We don't really want your business here."

Since Nintendo is itself a business, Nintendo should understand the concept of incentives quite well. Nintendo reacts to incentives too. They should understand how to create an incentive-friendly environment. Nintendo has to earn the products of third-party developers and publishers appearing on their systems. And they haven't done that all too well by taking even relatively basic actions.

Nintendo can start by removing that ESRB eShop policy. And publicizing sales of their third-party partners more! Yes, we all get notifications for the Super Smash Bros.-themed sales, but why not advertise the sale that Phoenix Wright: Ace Attorney - Dual Destinies had? People don't WANT to participate in the mobile market with those ridiculously low prices and lower margins. Stop piling on negative incentives and obstacles to business to ruin the 3DS's natural advantage over its mobile competitors!


Ludwig is not a consultant, but he's more than happy to espouse principles for business and economic success at no cost to you. Follow him on Miiverse at NNID as he still answers questions in the Dual Destinies community to this day!


Nintendo did eventually change how eShop purchases work, which should hopefully remove the incentive.
Despite what Ludwig wrote about people not wanting to participate in the mobile market, CAPCOM keeps doing that with this franchise.

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