MEF CEO Dario Betti shares his thoughts on news that Nintendo, already infamous for its litigious approach to use of its IP, has again updated its content guidelines for use of Nintendo games by streamers and other third-parties, and how it will affect its presence in the e-commerce and mobile spaces.
The world of e-sport is changing, and it is changing the way content is monetised. Here the video recording or live streaming of digital games is becoming a big business in YouTube or specialist platforms.
Nintendo, renowned for its strict IP protection, has once again updated its Content Guidelines for online video and image sharing platforms (September 2, 2024). These updates signal a stricter approach towards content creators using Nintendo properties, with potential implications for both large streaming platforms and individual creators.
Nintendo has seen some massive success and profits with the Switch since the console’s launch in 2017 and the relative titles published by Nintendo from Zelda to the Mario Bros.
The company published its most recent earnings report on August 2 and it revealed details about declining profits. Particularly the company saw a 55% decrease in net profits for the quarter ending on June 30 compared to the same period last fiscal year. In the lead-up to the release of the Switch 2, Nintendo’s revenue in the quarter year was ¥246.6 billion ( $1.71 Billion) , a 46.5% decrease year-on-year.
Nintendo, renowned for its strict IP protection, has once again updated its Content Guidelines for online video and image sharing platforms. These updates signal a stricter approach towards content creators using Nintendo properties, with potential implications for both large streaming platforms and individual creators.”
Key Takeaways:
- Increased Control for Nintendo: The updated guidelines explicitly grant Nintendo the right to object to and remove any content it deems “unlawful, infringing, inappropriate, or not in line with these guidelines”. This includes content that may be considered “graphic, explicit, harmful, or otherwise offensive”, even if it doesn’t directly infringe on copyright.
- Emphasis on “Creative Input”: The guidelines stress that only content featuring “creative input and commentary” is permitted, effectively banning the uploading or streaming of raw gameplay footage. This highlights Nintendo’s intention to control the narrative around its games and IP.
- Data Mining in the Crosshairs: The updated guidelines prohibit content derived from “data mining methods”. This directly targets leaks of unreleased game information, indicating Nintendo’s commitment to combating spoilers and controlling the flow of information about its products.
- Potential Impact on Content Creators: While smaller creators may benefit from the closure of the Nintendo Partner Program and the freedom to monetize content within the guidelines, they face stricter limitations on the type of content they can produce.
- The Japanese terms seem even stronger, with some outlets reporting that Nintendo says it will take action against posts that use its content to ‘violate public order and morals’.” Potentially linked to an earlier example of content
Why the update?
E-sport and content creations/influencers are an important part of the marketing mix. The update from Nintendo allows for faster content creation, however, Nintendo is clearly interested in keeping a close control of its intellectual property. These changes reflect a broader trend of IP holders tightening control over their content online. While protecting its IP remains a key concern, Nintendo’s actions also suggest a desire to curate a specific image and experience around its brand.
Nintendo did not specify why its guidelines have been tightened up at this time, it’s speculated that this may be connected to a high-profile Japanese content creator who was compelled to remove offensive Splatoon 3 content earlier this year.
The growing importance of Intellectual Properties in mobile games
Nintendo has been an influential entity in the gaming industry and continues to solidify this position with innovate strategies and strong performance. Nintendo’s strategy has been aiming beyond its primary gaming business. They have initiated efforts into opening stores and including their range of characters in theme parks and films. One example of this innovative approach is their collaboration with Shin Kong Mitsukoshi to launch a pop-up store and an exclusive line of gifts in Taiwan.
The Nintendo portable game strategy is turning mobile
Portable games device has been a stronghold of Nintendo. Achieving global recognition, Nintendo has seen notable sales of its Switch console, surpassing over 143 million units worldwide, threatening to exceed the record of the Nintendo DS as Nintendo’s best-selling console. In the future the Nintendo is set to produce a cellular based device. In late 2024, Nintendo took a significant step by submitting a wireless device, unrelated to the Switch 2, to the Federal Communications Commission (FCC). This innovation is likely to be available by April 2025. This is expected to be a different hardware from the announced Switch 2 portable device.
Nintendo is a digital gaming company
Hardware is by now accounting for 43.6% of its Dedicated Video Game Platform. Software makes up for over 51% of total revenue. More than half of software sales now come from digital downloads, reflecting a shift towards higher-margin products. Impressively, 81.2% of software sales are from Nintendo’s own titles, highlighting the success of its exclusive games.
The Nintendo Switch has around 123 million active players, with over 38 million subscribers to Nintendo Switch Online. Nintendo appeals to a broad audience, with 70% of its players over the age of 18 and an almost even male-to-female ratio.
This loyal player base provides a steady stream of subscription revenue, establishing the Switch as a leading “App Store Platform” in the console gaming market. Beyond gaming, Nintendo’s Mobile and IP-related revenue, which includes earnings from visual content, smart-device apps, and royalties, now contributes 5.5% of total revenue—almost double the previous year. The success of the Mario Movie has driven part of this growth, with future expansion expected from upcoming films and theme park attractions.
