Nintendo vs YouTubers, let’s get real for a second

This news is kind of old and plenty of people are aware of it by now: Nintendo don’t allow YouTubers to make revenue off of their IP unless they sign up for the Nintendo Creators
Program where Nintendo gets a share of the YouTuber’s revenue.

This in turn caused outrage in the video creator community, as these individuals believe it’s unjustified as the game creators get sales and thus revenue off of the people that get exposed to the game from the channel, and the go buy the game. The creators believe that they don’t own Nintendo anything as they make their money through these sales.

However, the situation is much more complicated than that, has been promoted in a negative light, and I would like to discuss why that shouldn't be the case in this article. But before we continue a note of disclosure: I am in no way affiliated with Nintendo or YouTube creators of any kind, this is just the informed opinion of an indie game developer by analyzing past articles and gathering data from our own game launch and exposure. I am also in no way taking one side or the other in this argument, I’m only presenting the facts as I’ve found them to be. 

As we all know, it’s not the hardware that sells a console, it’s the software. Nintendo are in a unique position in which they pump out enough high quality IPs to make the purchasing of their hardware a good investment. Mario Maker, Legend of Zelda, Super Mario, Smash Brothers, Mario Karts, all of these are titles that mostly every gamer on the planet has heard of, and most of the titles in the respective franchises are really good. Between the quality of the games and Nintendo’s own expensive advertising campaigns, they are more than capable to reach out to the gaming community on their own.

YouTubers know this, and they know that a video on the latest Super Smash Brothers will get them views on their channels thanks to Nintendo’s strong advertising. They also know that there are viewers that wouldn’t know about the newest titles, and it might prompt them to go out and buy it, which would in turn bring the developers some revenue. But the question that Nintendo has to ask is “Will the number of viewers purchasing the game and console outweigh the number of potential customers that no longer are willing to purchase the game and hardware since they can get part of, if not all the content through videos?”

From the article "Good’ isn’t good enough - releasing an indie game in 2015" on Gamasutra we learn of the game "Airscape: The Fall of Gravity", that was featured in videos by both TotalBiscuit and JackSepticEye, and saw little to no return. From Airscape’s Steam page we can see that they have 45 positive reviews and 4 negative, which without actually playing the title makes me believe that it’s a pretty good game, but sales-wise that probably earned them very little. If I were to extrapolate the Void 21 sales numbers and review count and compare, I’d say this game maybe made 500-1000 sales in total. But let’s be generous and say it had a total of 2000 sales. At a price-point of $9.99, if we were to assume they sold every copy at full price, they would have made a revenue of about $10,000-$12,000 after Tax and the Steam hosting expense in 9 months. This is however a very inflated and very unlikely number, with the total revenue probably being far below that. 

Now we need to think about it from Nintendo's perspective: 

- What are the chances of a viewer, on the basis of seeing a video on a very reputable channel, shell out the money for a Game + Console? Well from the information above, these are slim to none.

- Okay but what if they already own the console? Well if they do they see the advertisements and videos directly from Nintendo so they don’t need to be exposed to the game via a 3rd party. 

- And finally what are the chances that a person would be willing to buy the game, and maybe even the console, decide against it since they can get the game’s content for free off of YouTube? Unfortunately I don’t have any supporting data for this scenario so any conclusion would be unfit for the current analysis. 

However the YouTubers have a lot more to gain in this scenario. They create content for people to watch, the views and subscribers are important to them, it’s what drives their industry. They are doing whatever they think is best for their channel and making a video on the new Super Smash Bros may be very entertaining for their viewers. However this brings very little gains for the creator of the IP being promoted, so the developers choose to implement a business model in which they get revenue back for their work: The Nintendo YouTube partnership…

Of course YouTubers don’t want to have a part of their revenue taken away from them, as they also need money in order to survive, thus many choose to not go down this path and that is perfectly acceptable. However the problems stems that some YouTubers have also claimed that this practice is unfair, which in turn prompted their audience to believe Nintendo is being unfair when in reality Nintendo is just looking out for its own interest like everyone else.

But let’s look at the situation from a different perspective: There are dozens of new indie titles coming out every day, some of them really good and high quality. But as they do not have the budget to market themselves, they constantly bombard all the media channels in the hopes of getting exposure and many of them not getting even a reply. It is said that this is the result of oversaturation; that the content creators, especially the big ones, can’t possibly cover everyone and looking at the current state of the steam new releases page this is very true and correct statement. The YouTubers will have to go through all the games and pick the select few that they believe will interest their audience, but in doing so are they not doing the same thing as Nintendo? They are picking which titles to cover based on what they believe will bring them views, and that’s perfectly normal, but in doing so they are unwillingly “unfair” to the rest of the creators, some of them probably trying to show off really good games. 

How is this decision to only show the titles that will bring the biggest view count (and thus the most revenue) different than the decision Nintendo took that brings them the most revenue?

In conclusion, everyone is looking out for their own interest and business, the way it should be. Both parties are invoking very reasonable business tactics to promote themselves and neither are being unfair at the core of their logic. You could argue that the cut Nintendo asks for in the partner program is unreasonable, and you could also argue that the way YouTubers pick the titles they record is also unreasonable, but neither is doing it out of pure hatred for the other. 

They are just doing what they think is best for them.

I wrote this article because, much like Airscape: The Fall of Gravity we have a really good game according to the little exposure we’ve had from small YouTubers and steam reviews, but we cannot seem to penetrate into the bigger market due to our lack of ability to promote at such a high level. This however doesn’t mean that the media creators are to blame, it means we have to find a way to stand out and make ourselves noticed through some other means.