Since Nintendo finally entered the mobile gaming market with their partnership with DeNA, they released some details about their business model at their 75th annual shareholder meeting. According to Nintendo's CEO, Satoru Iwata, the company's upcoming mobile games will be "free to start", meaning there won't be an up-front cost to try the game, but players will need to spend money to unlock the full game. This means that Nintendo will not be adhering to the traditional "free to play" with cash shop model that most mobile games use to monetize.

Nintendo further explained their strategy by emphasizing the need to appeal to a broad audience without specifically targeting "whales", which are big spenders in free to play games. This free to try but buy to unlock model is interesting because it prevents games from becoming pay to win, but on the downside it's hard to get people to fork over money for mobile games.

Mr. Iwata's statement:

... people often call it the “free-to-play” system. However, since Nintendo is a company that wants the value of the games to be appreciated by consumers and wants to keep the games’ value at as high a level as possible, we do not want to use the free-to-play terminology that implies that you can play games free-of-charge.... If I can add a few more explanations about the free-to-start system, even though you can start playing with the application for free, it later requires you to pay if you want to play beyond the initial area or to pay for items if you want to play the game in a more advantageous position.

Personally, I think Nintendo is making a mistake. The free to play model is the most profitable business model for mobile games and companies like Mixi (Monster Strike) and GungHo (Puzzle & Dragon) have proven that a single successful game can make millions per day. Hopefully Nintendo isn't late to the game and can make a name for themselves in the rapidly growing mobile games market.

Source: Nintendo 75th Annual Shareholders Meeting Q&A. Details on the mobile business model available on page #3.