“Nintendo is a company, which is trying to maintain the overall value of video games. If we were simply going to say OK, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future and the entire industry will fold.”

“When we look at the entire system of freemium, it’s not always that everyone is happy with the offers.”

Satoru Iwata, president of Nintendo, said that to All Things Digital and was quoted again in a Gamasutra article speaking about how Nintendo would not be supporting the Free-to-play model.

The natural question to ask, given the last sentence of the quote, is how exactly “it’s not always that everyone is happy” when they play a game that follows this model.

The Free-to-Play model follows the axiom of “Play now, pay later”. The default or entry level of play is always free to the consumer. They can experience the game but are under restrictions on what they can do, where they can go or who they can interact with in virtual environments.

Certain items are sold to players. These items range from additionally personalized items to weapons that may present an advantage to a player that does not own the same item. The differences between game advancement therefore can oftentimes be summed up on a scale by how much money was invested.

The economic model to support the game means that players inevitably met hard gates where they must either pay in order to pass. If a player elects to pay, the gate will be removed and the player can enter an area. This serves to separate those who are willing to pay for access and those who are not.

If certain items help in game advancement and some areas are locked away behind “pay-walls”, then there have to be interactions therefore that cannot be accessed by a player who does not pay money to play the game. The “Freemium” (Free-to-play) model might be better described as a Premium model where the paying player will often get a greater advancement than the none paying player.

What is a game worth then if advancement is tied, even peripherally, to how much the player is willing to pay? The “price” will always be proportion to the amount of players in the game and the willingness of those player to pay. If there is a large player-base but they do not pay money in the game, then the model collapses. If there is a small player-base and they pay but do not met the game’s financial needs, the model collapses.

There is a very small window where both the player and developer is happy. Due to this, it is easy to understand why Satoru Iwata would be concerned with with model. Moving outside the “happy window” means either the game’s value decreases in worth or gamer’s satisfaction with the experience decreases.