Yesterday Nintendo and The Pokémon Company announced that they are suing Pocketpair, the developer of the viral Pokémon-with-guns game, Palworld, for patent infringement in Japan. Pocketpair has since responded, saying that “It is truly unfortunate that we will be forced to allocate significant time to matters unrelated to game development due to this lawsuit,” and at the moment, it is still unaware which patents Nintendo is accusing it of infringing on.
Over the years, I’ve written plenty of stories about Nintendo going after video games that are clearly inspired by or straight up reusing Nintendo’s intellectual property. These are usually “fan games” that use Nintendo assets or characters in order to remake or create new Zelda games, Mario games, Metroid games, etc. And while these games are often very cool and interesting, it’s not surprising that they shut down once Nintendo sends them a cease and desist.
What Nintendo is doing to Pocketpair is quite different. Palworld, which I played and liked a lot, has not literally reused existing Nintendo assets or character designs. Instead, Palworld blatantly takes some of the defining ideas and game mechanics from the Pokémon games and uses them to make an entirely new, open world survival game where players can capture and train creatures (and give them machine guns), something the Pokémon games have not done.
To learn more about what Nintendo is doing and why, I talked to a Japan game industry analyst I’ve followed for years, Serkan Toto, the CEO of Japan game industry consulting firm Kantan Games. Toto told me that he is pretty sure that Nintendo is going to win, even if the patents have little to do with what makes Pokémon games Pokémon games, but that this doesn’t mean Palworld will go away.
The interview that follows has been edited for clarity and length.
404 Media: What do you think Nintendo is trying to accomplish here and do you think it will succeed?
Serkan Toto: So first of all this lawsuit is filed under Japanese law, so it has nothing to do with the US, nothing to do with the UK or EU law at all. And second point is that I think that Nintendo took its time to really build the case, map everything out, including counter arguments that the other side might bring up in a lawsuit, and how to counter them and make absolutely sure that they think they will win before filing the lawsuit.
Nintendo has, as I mentioned in my tweet, a legendary track record. I think they never lost a lawsuit that they initiated themselves, and under the Japanese legal system, seven years ago, they sued a company called Colopl, which is a mobile gaming powerhouse from Japan. They [Colopl] have, I think, almost 2,000 [employees], nobody but knows them outside Japan but they had a famous mobile game called White Cat Project, not copying Mario, not copying Pokémon, not copying Zelda, nothing at all. Nintendo brought forward six patents that they thought that this company was violating inside their very successful mobile game at one time. It was one of the most popular mobile games in Japan, and they built a huge case. One of the patents was for a confirmation screen after sleep mode. You know when devices are sleeping and you want to resume there's a confirmation screen in a lot of games? “Are you sure you want to resume?” And then you tap yes or no. Nintendo has a patent on that, and this game uses it. And then Nintendo said, you know, look, you're using our patent and you cannot do that. You're not paying us any licensing fees.
And they had five other ones, including one for isometric, pseudo, 3D games, when the character is hidden behind the tree, the game forms a shadow, so you have a kind of sense for where the character is, even though you don't see the character clearly. Nintendo has a patent on that, and this game uses that technology. And Nintendo said, look, you cannot do this. And this goes on with four other patents, right?
So they had this legal battle. Colopl said, no way, but in 2021 they had a settlement where Nintendo got the equivalent of $20 Million US dollars and Colopl is now paying licensing fees to Nintendo for continuing to use the patents inside their mobile game. So it was a complete win for Nintendo, even though it was technically a settlement. I personally think you will see that after a few years, Nintendo will be in a very, very similar position. I don't think that Nintendo will even think about filing a lawsuit like this without being as sure as they can that they're going to win this.
So you think they’re trying to get licensing fees from Palworld and not shut it down?
Yeah, I think they're trying to damage them financially as much as they can. And in the case of Colopl, again, it was just 20 million US dollars.
And, you know, Nintendo, of course, knows that Pocketpair this year made probably hundreds of millions of dollars in revenue, and also hundreds of millions dollars in profit. Because Pocketpair is a Japanese team the salaries are not as high as in the US. It's a small team. This is not a AAA game and it's not a very expensive game. So I think that the profit margin is probably sky high for Palworld and I think that Nintendo didn't like that one bit and said, look, they're basically stealing our character designs. We cannot do anything about this. So let's screw them with other things, like, again, patents that are very, very technical. The patents are not listed yet, so we don't know which patents. We don't know which patents Nintendo is actually talking about, but I bet with you already today that it's going to be highly, highly technical things, like this confirmation screen that I mentioned and stuff like that.
I think that Nintendo is, even apart from the gaming industry, they have a reputation of always winning their lawsuits.
So you don’t think these patents are going after any aspect of Palworld that players would recognize as a defining feature of a Pokémon game?
I mean, there's like a mechanic where you throw the spheres, right? And this is a very obvious, in your face system [that’s very much like Pokémon]. But I think that it will be a lot more technical than this. Nintendo would have dug through every single action inside the game, they would have probably reverse engineered it, and just find ways to sue these guys.
You can bet your life that Nintendo hates this company, and they couldn't find an angle with the character designs. This is why they are not mentioned in their press release. So they come with these technical peculiarities. So I personally believe, if you act like this, you can sue like 90 percent of the game developers in the world. I'm sure there's like thousands of games that have a confirmation screen when you go from sleep mode to resuming the game right, but if you basically trigger the wrath of Nintendo, they will come after you.
So I’m not accusing Nintend of being a patent troll, but this is kind of patent troll behavior in the sense that they have a patent for something they can accuse many companies of using, but they are targeting Palworld because they’re mad about the similarities to Pokémon and because it made a lot of money?
Yes, and this is what the big companies do, right? If you make them angry, they spit in your bowl. They will always find a way. They have an army of lawyers, and with decades of experience, they will spit in your bowl.
And please don't forget, the Tokyo Game Show next week already has a list of games that are going to be showcased, and it looks like Pocketpair will announce a PlayStation 5 version of Palworld there. I can guarantee you Nintendo wanted to sabotage that launch next week. I can guarantee you also, they wanted to sabotage the recent announcement of Pocketpair getting together with Sony's Aniplex anime studio to expand the IP. Pocketpair wants to make this bigger than this obscure $30 game that has these weird mechanics, and they want to make a big IP out of it. If 200 people played it Nintendo wouldn’t care. Nintendo is plagued by copies and copyright infringements every single day and they are not going after all of them. In that sense, Pocketpair has become a victim of its own success.
If I can ask you as someone who loves video games, not an industry expert: Video games are a very iterative industry. People pick up on successful, popular ideas from other video games and iterate and add to them all the time. It’s extremely common and how we get a lot of our favorite video games. How do you feel about Nintendo, which is such a foundational company in this business, essentially going after another company that is doing this? The entire hook for Palworld was essentially that it was doing something with the core ideas of Pokémon that Nintendo wasn’t, and now Nintendo is signaling that no one should try that again.
I think Nintendo doesn't care about any of that. Nintendo doesn't care because they think, ‘Hey, they're stealing our stuff.’ I don't think that Nintendo says, ‘Let these people play a little bit. Let's let them become a bigger company.’
It helps the entire Japanese game industry if there's a newcomer [like Pocketpair] because for the longest time we didn't have a new, popular, successful, money making game developer in Japan. Palworld has been kind of like the first in a long, long time, because the mobile gaming revolution basically ended a couple of years ago, and I think that Nintendo just saw these guys are getting too aggressive. Nintendo thinks Pocketpair is copying what they are doing, and before they even start distributing the PlayStation version or executing these IP expansion plans, Nintendo is going to spit in their bowl. I don't think that Nintendo looks at these things through an idealistic lens at all. This is just a pure, cold-blooded business.
