Please ensure Javascript is enabled for purposes of website accessibility

Does Apple Need Nintendo More Than the Other Way Around?

By Rick Munarriz – Nov 20, 2016 at 4:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The world's leading consumer electronics company and a video game pioneer are teaming up on a win-win app rollout. Super Mario Run hits the App Store on Dec. 15.

Image source: Nintendo.

We have some new details on the most important iPhone app Nintendo (NTDOY 0.62%) has put out. Super Mario Run will be released exclusively through Apple's (AAPL 1.56%) App Store next month.

Nintendo announced on Tuesday that Super Mario Run will be released in 151 countries on Dec. 15. It will be a free iPhone and iPad download, and players will be able to check out limited experiences of the game's three modes at no cost. A one-time payment of $9.99 will unlock unlimited access to the three modes for what will be the first game in the Super Mario franchise to be be available as a mobile app. 

We've known that this game was coming since Super Mario creator Shigeru Miyamoto stepped on the stage during Apple's iPhone 7 launch event two months ago. Miyamoto, at the time, had even suggested that the full game would be available at a set price -- unlike many popular gaming apps with a pay-as-you-go model, with tollbooths along the premium gaming experience. 

Plumbers over Pikachus

Diehard Nintendo fans won't have a problem shelling out $9.99 for the game next month, and it will be the most important iOS release for Nintendo. Pokemon Go may have lit a fire under Nintendo's stock -- soaring 114% in a span of nine trading days in early July as the pocket monster training game became a smashing success -- but success proved fleeting. The stock went on to shed a quarter of its value from that point by the time that iPhone 7 event rolled around. 

The biggest reason for the stock pulling back after initially more than doubling is that Nintendo itself didn't have a lot to do with the success of Pokemon Go. Niantic Labs was the company behind the game, and Nintendo itself only owns a minority stake in the Pokemon franchise. It's a different story with Super Mario Run, where even Miyamoto had a hand in the design of the game. 

Nintendo's stock soared 29% the day the game was announced. Apple's response was far more subtle. However, both companies have a lot riding on the release and its initial iOS exclusivity. Nintendo obviously hopes to make a dent in the mobile gaming market that has eaten into its handheld system sales. 

Let's not underestimate what Apple stands to gain here. Apple collects a piece of every App Store transaction, so obviously it will benefit from brisk download activity that translates into purchases of the full game. However, the $9.99 point is interesting. Most of the premium gaming iOS apps sell for $2.99 or less. In fact, none of 100 most popular premium App Store downloads over the weekend cost more than $7.99. Super Mario Run at $9.99 could raise the perceived value of what a quality mobile game should cost, and if other developers follow suit it could lead to a big spike in App Store sales for Apple.

Nintendo could've gone Android first. It does have the larger installed base. However, going with iOS finds it wooing a more affluent set of smartphone users. A hot game and platform exclusivity will serve Apple well -- really well -- this holiday season.

Rick Munarriz owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.