Reassessment: Opportunity Cost and Third Party Characters

Each character has a distinct cost associated with their inclusion. Third party characters, in particular, as very high compared to other characters.

However, since then, Sakurai and his team have included Ryu from the Street Fighter series as a full fighter as well as numerous costumes from third party series. While this activity seems to contradict my original statement, I believe that I am still half right as I might have incorrectly assessed how the agreements with the third party publishers worked.

So far, all of the third-party characters and Mii Fighter costumes have been from series that are owned by either Capcom, Sega, or Bandai Namco. Originally, I assumed the agreements were only for content from the Megaman, Sonic the Hedgehog, and Pac-Man series (including some classic Namco series as well) would be included as DLC. Though we cannot fully know how these agreements work, we can safely assume that Nintendo may have free reigns to use any content from these companies based on what has been added so far. More specifically, the agreements may not be for individual series, but for all content from that company. However, we can not know for sure. Still, if what I described is the case, then the opportunity cost of using a character like Ryu would likely be the same as a new Nintendo character. As such, the team still made the best choice for a character inclusion given each character’s opportunity cost.

While some may think that tons of third party characters could be included based on Ryu’s inclusion, this is not the case. In fact, the opportunity cost of using a third party character not owned by Capcom, Sega or Bandai Namco may be higher than what I had previously assumed. This is because the inclusion of an outside character would mean Nintendo would have to enter to a totally new joint venture agreement. For one character, this may not be worth the effort. Nintendo has been able to leverage from the IPs of the three aforementioned companies. However, when looking at other publisher outside of these three, the addition may not be worth the effort if only one new character would be added, especially for DLC. So I suspect future Mii Fighter costumes, characters and stage would not be based off IPs not owned by Nintendo, Capcom, Sega or Bandai Namco.

I ended my previous article with a ranking the opportunity cost from highest to lowest. Since the old one may be out of date, this is what I believe the opportunity cost is given what I stated above, from highest to lowest (remember, a higher opportunity cost means the addition would be more “costly” given another alternative.)

Third party characters (not owned by Capcom, Sega or Bandai Namco)
Snake
Third party characters owned by Capcom, Sega, or Bandai Namco.
New Nintendo characters
Veteran Characters

Snake was ranked higher since including him would likely require an entirely new agreement and increase his opportunity cost. Also, the opportunity cost between a New Nintendo character and Third party characters owned by Capcom, Sega, or Bandai Namco are about the same or equal.

In the end, we can only speculate on the decisions Sakurai and others are making about characters included in Smash. Unfortunately, the next character Sakurai could include would throw this assessment out the window. Furthermore, as PushDustin wrote earlier, there may not be much more in the way of DLC. We’ll have to wait and see who is included, but I hope you enjoyed the analysis so far.

Agree? Disagree? Let us know in the comment section below.