Nintendo announces a new affiliate program last week aimed to share the profits of videos using their games on YouTube. Nintendo has for some time now been known as “… one of the most aggressive companies when it comes to YouTube monetization and Content ID claims” according to influential YouTube personality TotalBiscuit. Under Nintendo’s new “Content Creators Program“, YouTubers who make videos using Nintendo’s are subject to lose up to 40% of the revenue they’d normally see due to Nintendo taking a cut. While this is better than the past year where Nintendo was claiming all revenue from videos featuring their games, this is still an awful deal for content creators.
Under math laid out by TotalBiscuit who is one of the most influential and watched YouTubers out there, for every $100 of money generated by ads on a video, content creators would only see about $21 after Google’s cut (about half), the Multi-Channel Network (10-40%), Nintendo (40%) and PayPal fees (4%). Making matters worse is that Nintendo will only pay out through PayPal in American dollars which means it’s unavoidable to get hit with PayPal fees and if you’re in somewhere else in the world, like a lot of YouTube personalities are, you’re going to get hit with exchange rate fees as well.
EA Approach – "We'll pay you to play our games on Youtube" Nintendo approach – "You will pay us to play our games on Youtube"
— John Bain (@Totalbiscuit) February 5, 2015
Nintendos new policy is a no win. It hurts existing channels that support Nintendo and drives away those that might have considered it.
— John Bain (@Totalbiscuit) January 30, 2015
Obviously, YouTube content creators are outraged. Influential YouTuber Boogie2988 who has over 2 million subscribers and 300 million views calls this new system an “18% Nintendo Tax.” He goes on to sum up his video (about 5:28 in) by saying “What are you doing, Nintendo? It doesn’t make any sense to me. I am one of your biggest fans. I am a lifelong fan. I love everything you guys create. But this is an abomination.”And that’s exactly what this is. Forcing money out of YouTube channels that provide your multi billion dollar company with free advertising is nothing short of extortion.
What incentive does a channel have to criticize Nintendo now? If they don’t like your content and refuse to let you monetize it under their new system, you’re working for them. You will receive no money from that video so whats the point? This system is rife for abuse. We could very easily see Nintendo only allowing through videos that praise their company and games. This is a massive conflict of interest.
Nintendo is missing the point with this system. The free advertising that is generated by series such as “Lets Play” far outweigh what they’re going to gain by extorting money out of these content creators. Take for instance Minecraft. Minecraft was a small game made by a small studio and still in alpha when Lets Play series started popping up on YouTube. Partially due to the popularity of these series, Mojang recently sold Minecraft to Microsoft for 2.5 billion dollars. No one is saying that these series were the sole reason for this but they were a major part in making Minecraft into the juggernaut we see today.
Nintendo is ultimately going to lose in this deal. So far despite the warnings from opinion makers of TotalBiscuit on Twitter, Nintendo has been overwhelmed with requests to join their program. This is a short term solution to a long term issue and it’s only an issue because Nintendo is making it one. Videos are overwhelmingly positive. If a game sucks, most of the time they’re paid no time and not even discussed on big channels.
This will only serve to create controversy and sap videos from mid to small channels. This won’t hurt the big guys. Stars like PewDiePie will be fine if they lose the advertising income on a few videos but smaller channels who depend on the money for every video will either be forced into Nintendo’s scheme or to not play Nintendo’s video games. If your choice is to lose most of the income from a video that takes you hours to produce or pick any other game on any other system… what do you think most content creators are going to do?
This is also going to hurt Nintendo in the long run. As mentioned above, these videos serve as free advertising for Nintendo. Nintendo would have to spend infinitely more on advertising than they’re bringing in from this scheme to have the impact that these channels have. People are more receptive to sitting down watching a personality they enjoy play a game they like then watching an ad as PewDiePie points out on his tumblr post addressing the issue.
“It speaks volumes that Nintendo is the only one pulling this off.” TotalBiscuit correctly points out. If this was a system that wasn’t harmful to content creators and therefor the companies of the games they’re playing, many more would be doing similar programs. “Are they entitled to do this? Legally? Yes.” And they are but this is a move that is harmful to everyone involved and will crater content on YouTube.