Nintendo is widely regarded—and for good reason—as a corporation whose triumphs stem from absolute vertical integration. The Kyoto-based giant meticulously architects its own hardware, creating consoles that serve as bespoke stages for its proprietary software. These titles are largely developed in-house, starring iconic mascots and storied franchises that Nintendo holds under lock and key. In the intersecting worlds of technology and entertainment, such comprehensive hegemony over a product ecosystem is exceedingly rare, drawing parallels only to titans like Apple or Disney.
However, there exists a conspicuous outlier to this narrative of total control. Pokémon represents what is likely Nintendo’s most lucrative intellectual property. By various metrics, it stands as the highest-grossing media franchise in history, its coffers overflowing from a relentless stream of merchandising, software sales, and trading card revenue. Recent industry data suggests that Pokémon amassed a staggering $12 billion in retail revenue in 2024 alone. Yet, despite this massive footprint, Pokémon does not belong exclusively to Nintendo—at least, not in the traditional sense.
While Nintendo maintains exclusivity for the primary Pokémon RPGs on its platforms, these games are the handiwork of Game Freak, an independent studio. Alongside Creatures Inc.—the stewards of the Trading Card Game—Nintendo functions as a joint stakeholder in The Pokémon Company. This entity acts as the overarching rights holder, orchestrating a multibillion-dollar licensing empire. Even the franchise’s most explosive mobile success, Pokémon Go, exists at a strategic distance; it is published and managed by external developers under license, operating largely outside Nintendo’s direct supervision.
For a company often characterized by its rigid perfectionism and reverence for internal processes, this decentralized arrangement seems paradoxical. However, the meteoric rise of Pokémon at the turn of the millennium was not the first time Nintendo’s fortunes were tethered to a property it didn’t fully own. Historically, Nintendo hardware has been inextricably linked with its software—Mario sells machines. Yet, in 1989, Nintendo launched the revolutionary Game Boy without a definitive “killer app” from its own stables. The solution was Tetris. The corporate espionage and high-stakes negotiations required to secure the handheld rights to Alexey Pajitnov’s puzzle masterpiece are now legendary within the industry.
Tetris effectively carved out the portable gaming market, a sector Nintendo has dominated for decades. Handheld devices, which appealed to younger demographics and casual players, served as a financial bulwark during the company’s leaner years in the home console space. This lineage eventually culminated in the Nintendo Switch, a hybrid device that allowed Nintendo to sidestep the technological arms race with Sony and Microsoft, ushering in a new era of market supremacy.
This trajectory would have been impossible without Tetris, but it also relied heavily on Pokémon. While Nintendo’s internal stars like Shigeru Miyamoto crafted brilliant portable versions of Mario and Zelda, they hadn’t yet conceptualized a game that perfectly harnessed the unique social potential of handheld hardware.
That spark of inspiration came from Satoshi Tajiri, a former gaming journalist and founder of Game Freak. Upon seeing the Game Boy’s Link Cable, Tajiri envisioned creatures crawling through the wire, trading between devices—a concept rooted in his childhood hobby of insect collecting. Nintendo recognized the potential and backed the project, though it took years for the original Pocket Monsters Red and Green to manifest in 1996. By the time the franchise reached international shores, it had evolved into a global phenomenon, extending the Game Boy’s lifespan to an incredible 14 years and securing Nintendo’s financial future.
It remains a point of curiosity why Nintendo never fully absorbed Game Freak. While a Disney-esque acquisition seemed logical given the brand’s immediate success, a tripartite partnership was instead codified by 2000. This structure allows Nintendo, Game Freak, and Creatures to co-manage the brand through The Pokémon Company.
This “second-party” relationship is actually a cornerstone of Nintendo’s strategy. The company has long maintained exclusive bonds with independent outfits like HAL Laboratory and Intelligent Systems without demanding total ownership. Yet, given Pokémon’s unprecedented scale, the decision to share the spoils remains fascinating. Whether it was Tajiri’s refusal to sell or a calculated move by Nintendo presidents Hiroshi Yamauchi and Satoru Iwata, the result was a masterstroke of decentralized branding.
Had Pokémon been a 100% Nintendo-owned property, it is doubtful the brand would have pursued such an aggressive, all-encompassing merchandising blitz. Nintendo’s protective nature might have stifled the sheer volume of licensed products and cross-media expansions that fueled the “Pokémania” of the late 90s. The Pokémon Company acted as an autonomous vanguard, capturing consumer attention with a rapaciousness that a conservative Nintendo might have found distasteful.
This arrangement shielded Nintendo’s core reputation. While the trading card game faced brief moral panics and Game Freak’s recent technical hurdles have drawn criticism, Nintendo remains somewhat insulated. They reap the massive financial rewards and enjoy hardware-driving software sales while maintaining a degree of separation from the franchise’s logistical complexities. Ultimately, Nintendo’s hands-off approach proves that they value stability and consistent cash flow over the risks of aggressive acquisition—a philosophy that continues to pay dividends.
Source: Polygon
