YouTube gaming stars blindsided by Nintendo's ad revenue grab

[Thomas the Tank Engine]

Nic Truong of Mississauga, Ont. has a dream job: he plays video games and posts clips of them on YouTube for his fans.

 

But now, Nintendo is asking YouTubers like Nic to hand over at least 40 per cent of their ad revenue for any video starring Mario or Link.

 

Truong, better known as TetraNinja, has built a following of more than 800,000 on YouTube by providing play-by-play commentary on video games. These clips are called "Let's Plays," and they're some of the most popular gaming-related videos on the internet.

 

Nintendo games hold a special place in Truong's heart.

 

"The original Legend of Zelda on the [Nintendo Entertainment System] was the very first video game I played," says Truong, who credits the popularity of his channel to his 2011 series of Let's Plays of Zelda: Skyward Sword.

 

Nintendo's 'Creators Program'

 

YouTube videos generate money for the uploaders in several ways, but most of them are tied to ads - either "pre-roll" ads that play before the clip, or banners that are superimposed on them. But a video creator needs to surpass a certain threshold before they get a cut of the ad revenue.

 

Several sources estimate that 1,000 views on a single video will generate around five dollars of ad revenue. Half of that goes to Google, and the rest goes to the creator.

 

Gamers like Truong, whose most popular videos have millions of views, are able to make full-time income from sharing their hobbies with their fans.

 

The gaming publishers have taken notice.

 

In 2013, Nintendo made sweeping copyright claims on videos on YouTube that included footage from their games.

 

"As part of our on-going push to ensure Nintendo content is shared across social media channels in an appropriate and safe way, we became a YouTube partner and as such in February 2013 we registered our copyright content in the YouTube database," Nintendo said in a statement in 2013.

 

The copyright claims meant that all ad revenue that previously would go to the creators of the individual videos went to Nintendo instead. It caused a significant backlash in the Let's Play community. Eventually, Nintendo dropped the claims.

 

The company's new initiative, unveiled in January, proposes to share the revenue for some videos.

 

YouTubers can apply to the Nintendo Creators Program and if an approved channel's video contains footage from a list of approved games, the revenue is split between the two parties

[+Red King Subscriber²]

This is a great profit models for companies - Nintendo is just the first.

[trag3dy]

First and only. Most other video game publishers see the lets plays and twitch streaming for what they are - free advertising. Nintendo is shooting themselves in the foot with this.

 

Go watch Angry Joes latest video on it.

[Brian M. Veteran]

I love Nintendo, but why do they always have to screw over their customers.

[spacer]

I definitely don't understand why Nintendo would want to silence free advertising. It kind of mind boggling, actually.

[+InsaneNutter MVC]

A great way to alienate your passionate fans... Nintendo's loss I say.

[LOC Veteran]

Angry Joe's videos on this subject are better at explaining things to Nintendo than any article out there. I'm shocked Pewds hasn't done a rant on Nintendo (at least one that I haven't seen yet) but he may not want to tick them off in the event that Nintendo reverse course I guess.

 

Go go Angry Joe!

[Ironman273]

I definitely don't understand why Nintendo would want to silence free advertising. It kind of mind boggling, actually.

They don't want to silence it, they want to get paid off of other people's work because Nintendo is mentioned in it.  They want them to be anything BUT silent so they get paid.  It makes you wonder how their business is doing if they feel they need to cash in on their customer's love and appreciation of their products.  It's a shame really.

[Showan]

If I had a product, that people were fond of my products and were advertising it FREE for me. Then I'm all for it.

 

 

If people made a little coin off my product, that wouldn't bother me.  Especially if the end users voice brought in more customers/purchases.

[spacer]

They don't want to silence it, they want to get paid off of other people's work because Nintendo is mentioned in it.  They want them to be anything BUT silent so they get paid.  It makes you wonder how their business is doing if they feel they need to cash in on their customer's love and appreciation of their products.  It's a shame really.

I'm sorry, you're correct. I don't know why I read it as "silencing fans". However, in effect, that is what is happening ...at least with Angry Joe. I wouldn't be surprised if others stop making Nintendo videos due to the new policy.

[WinMacLin Guy]

As much as I love Nintendo (they are my favorite console/game company), I have to say that this is a really bad move especially right now when there is so much negativity around their brand (much of it undeserved but this move will certainly add fuel to the fire). I would say that I have purchased a lot of Nintendo games this gen which I would not have otherwise purchased if it was not for Lets Play videos and Youtube reviews (Kid Icarus, Fantasy Life, Animal Crossing, Bayonetta 2, Hyrule Warriors are just a few). Nintendo is very lucky to have a fan base that makes so much content around their games, and this type of petty cash grab will alienate a lot of these people (a lot of these youtubers are making Nintendo videos because a) they like Nintendo and their great games b) there is an audience for Nintendo videos; but a lot of these folks are earning a living out of making these videos, so why should they continue to make Nintendo videos when Nintendo will take 40% of their profit and their ability to control the content?). Instead of making money this way, Nintendo should focus on making money by continuing to create unique propositions (hardware, software, toys, etc) to make their audiences happy and attract new audiences. Sadly, I doubt this program will be changing anytime soon, this seems like one of those decisions that Nintendo of Japan made based on the business climate and culture over there, and I very much doubt Nintendo of America has the ability to change anything.

[Liana]

It sounds like we need to have a court ruling deciding if these types of videos fall under fair use. I feel that Nintendo should get paid for the content that they have created, but showing a walkthrough video of a game is not the same content or experience as the game itself. If it was, I wouldn't ever need to buy the games or the consoles! The content and experience has been changed enough that I do not believe that Nintendo has a right to profit off of it.

[Ironman273]

I'm sorry, you're correct. I don't know why I read it as "silencing fans". However, in effect, that is what is happening ...at least with Angry Joe. I wouldn't be surprised if others stop making Nintendo videos due to the new policy.

Well, I think if the fans don't silence themselves as far as Nintendo is concerned it will set a dangerous precedent and other companies will want to jump in and "profit".

[trek]

Sounds like the definition of fair use needs to be amended to include video games... Like how it applies to movies and music... You can't play an entire movie substituting audio commentary over it and then claim ad revenue...

[chrisj1968]

Hence why nintendo always comes in 3rd in the console market. Nintendo trying to cash in on video footage of their games, ludicrous.

[PsYcHoKiLLa]

This is a crappy thing for Nintendo to do but tbh, I don't really care, I'm not a YouTube gamer, the only people this affects is the people making money playing the games on YouTube. They're right, apart from gaming magazines which probably don't sell a lot and maybe getting Jimmy Fallon to play the game, there's no other advertising route for these companies, so if they want to shoot themselves in the foot, let them. Nintendo is already on the way out and has been behind MS and Sony in terms of sales for years, they're digging their own graves.

[HawkMan]

Hence why nintendo always comes in 3rd in the console market. Nintendo trying to cash in on video footage of their games, ludicrous.

 

Always...

 

also they make more money on their consoles and games than both Sony and Microsoft, despite being third. 

This is a crappy thing for Nintendo to do but tbh, I don't really care, I'm not a YouTube gamer, the only people this affects is the people making money playing the games on YouTube. They're right, apart from gaming magazines which probably don't sell a lot and maybe getting Jimmy Fallon to play the game, there's no other advertising route for these companies, so if they want to shoot themselves in the foot, let them. Nintendo is already on the way out and has been behind MS and Sony in terms of sales for years, they're digging their own graves.

 

Except, despite sales not being quite as high as they hoped, Nintendo has proved that you don't need to be the highest seller to be successful and make money. While being third, they're arguably the most successful economically. 

[chrisj1968]

Always...

 

also they make more money on their consoles and games than both Sony and Microsoft, despite being third. 

 

Except, despite sales not being quite as high as they hoped, Nintendo has proved that you don't need to be the highest seller to be successful and make money. While being third, they're arguably the most successful economically. 

 

make more money against those other consoles? it goes hand in hand because you buy the console and have to buy games. and as a former nintendo console user circa gamecube, mario party and zelda are their big franchises anyway.

 

But copyright laws such as fair use DO allow for use of content without violation in commentaries. Also, the Lawyer stated watching someone else playing the game isn't like posting a movie online.

 

But nintendo is in full tard mode because they are in fact getting free advertising when users do this. that is a good point and valid. I'd see a massive defection to some degree and then Nintendo recanting their policy on the issue.

[Gone]

Nintendo doesn't make any money from creativity anymore, they just replay old ideas and systems. They produce utter crap and apparently can only make money by screwing over game reviewers who also give them free advertising, now they want a cut of their advertisements.

 

Nintendo will go the way of Sega and Atari.

[HawkMan]

make more money against those other consoles? it goes hand in hand because you buy the console and have to buy games. and as a former nintendo console user circa gamecube, mario party and zelda are their big franchises anyway.

 

But copyright laws such as fair use DO allow for use of content without violation in commentaries. Also, the Lawyer stated watching someone else playing the game isn't like posting a movie online.

 

But nintendo is in full tard mode because they are in fact getting free advertising when users do this. that is a good point and valid. I'd see a massive defection to some degree and then Nintendo recanting their policy on the issue.

 

Nintendo also made money on the hardware from console 1. 

Nintendo doesn't make any money from creativity anymore, they just replay old ideas and systems. They produce utter crap and apparently can only make money by screwing over game reviewers who also give them free advertising, now they want a cut of their advertisements.

 

Nintendo will go the way of Sega and Atari.

 

You're calling MK8, Smash Bros's and the new super Mario games utter crap ? I call them pure unadulterated gaming fun. I wouldn't have it as my only console, but I'm glad I have it. 

[chrisj1968]

Could nintendo be in serious money trouble? this is certainly a knee-jerk issue. This can only help the competitors. Smash bro's though, this is the first time I've heard of them, seems like they are going to turn their backs on Nintendo possibly.

[HawkMan]

Could nintendo be in serious money trouble? this is certainly a knee-jerk issue. This can only help the competitors. Smash bro's though, this is the first time I've heard of them, seems like they are going to turn their backs on Nintendo possibly.

 

heh, no, Nintendo has a ridiculous bank account. basically they could run at a massive loss for decades and not be in trouble. 

[Aergan]

Nintendo are in self-destruct mode from a PR perspective. Did they hire ex-EA staff or something recently?

[nosense]

It's Nintendo  IP... 

Nintendo also tried to put a stop to smash brothers tournament at evo2013. After the community raise 200k for charity, to get their game in lineup of games. But after a huge out cry from the community Nintendo caved in.

 

Game publisher have the right to stop any game tournament and the right to take down any video containing game play video of their IP. 

[trag3dy]

Could nintendo be in serious money trouble? this is certainly a knee-jerk issue. This can only help the competitors. Smash bro's though, this is the first time I've heard of them, seems like they are going to turn their backs on Nintendo possibly.

 

They were doing it before the Wii U came out, it just wasn't as wide spread. So it's not really a new or recent issue.