The Pokémon craze of 1999 made a great deal of money, and almost none of it reached The Pokémon Company. The Tokyo steward earned ¥25m in its first year. In the same years an American toy giant was selling hundreds of millions of dollars of Pokémon cards, and a New York agent was collecting the licensing commissions. When the boom broke, it broke on them. TPC spent the next decade quietly taking their jobs, one at a time, and it stayed a small company the whole way through. The fortune described on the main TPC page is built on top of this slow, cheap reconstruction.
A company that hovered around zero
The Tokyo company publishes a short notice of its accounts in Japan’s official gazette. For the years before 2016 the trainer’s notes has those notices only through a single transcription on a blog. That sounds fragile, but it holds up. Each year’s retained profit should equal the year before plus that year’s net profit, less any dividend, and in fifteen of eighteen links the blog’s figures reconcile to the yen. The first two years that can be checked against images of the gazette itself match it exactly: ¥619m and then ¥15,921m. So the early series is graded B, a careful second-hand copy, not a filing.
What it shows is a company that wobbled around zero. Net profit was ¥790m in FY2/05. In FY2/07, the year of Diamond and Pearl, it lost ¥336m. It then swung from a profit of ¥1.1bn to a loss of ¥144m, to ¥1.34bn, and to another loss of ¥395m.
The saw-tooth has a pattern. In seven of the ten years when TPC opened a new Pokémon Center or set up a new office or subsidiary, profit fell. In every other year it rose. That fits set-up costs being charged straight to the year, but it is a loose test, and an estimate. The Diamond and Pearl loss year was also the year Pokémon Korea was founded, so the two cannot be told apart.
How big was it in sales? No revenue figure exists before FY2/21, because the gazette notices did not print one until then. The trainer’s notes estimates it two ways. A company’s sales usually bear some steady relation to its assets. In the two years where both are filed, TPC’s sales ran at 1.00–1.14× its assets. FY2/15 assets of ¥12.35bn then imply sales of about ¥12–14bn. Separately, FY2/15 profit at the parent’s later margin implies ¥13.1bn. Two methods, the same answer: a business of roughly ten to fifteen billion yen, both figures modelled.
A company that hovered around zero
TPC’s parent profit by year. Losses in the Diamond/Pearl year and twice more; nothing above two billion yen until the step.
- From a transcription of the gazette notices
- Read from the gazette notices
- Loss
Every bar left of the step comes from the one blog transcription, checked year to year against itself.
Built from , and .Show the numbers
| Year to February | From a transcription of the gazette notices, ¥bn | Read from the gazette notices, ¥bn | Source |
|---|---|---|---|
| 1999 | – | ||
| 2000 | – | ||
| 2001 | – | ||
| 2002 | – | ||
| 2003 | – | ||
| 2004 | – | ||
| 2005 | – | ||
| 2006 | – | ||
| 2007 | – | ||
| 2008 | – | ||
| 2009 | – | ||
| 2010 | – | ||
| 2011 | – | ||
| 2012 | – | ||
| 2013 | – | ||
| 2014 | – | ||
| 2015 | – | ||
| 2016 | – | ||
| 2017 | – | ||
| 2018 | – | ||
| 2019 | – | ||
| 2020 | – | ||
| 2021 | – |
From a transcription of the gazette notices. Years to February 1999–2015 come from a single blog transcription of the statutory notices. The 2002 figure is the blogger’s back-solved estimate. Losses in 2007, 2010 and 2012.
Read from the gazette notices. Parent company only. 2017 is 7.8 times the old 2015 peak; profit kept rising off this scale, to ¥120.1bn in 2026.
The boom that paid other people
The early money in the West went through two companies, neither of them TPC. Wizards of the Coast, owned by Hasbro, published the English card game. In its boom year Pokémon was $570m of Hasbro’s revenue, a figure worked out from Hasbro’s own filing. A year later the trade publication ICv2 estimated the cards at “just under $100 million” of sales. That second number is an estimate, not a filing, but a fall of four-fifths in a year is not in doubt.
The licensing was run by 4Kids Entertainment of New York. Its 1999 annual report describes its subsidiary as “Nintendo's exclusive Merchandise Licensing Agent for Pokemon outside Asia”. Note whose agent: Nintendo’s, not TPC’s. Pokémon made up 95% of 4Kids’ revenue in 2000 and 66% in 2001. In money, the agent’s Pokémon revenue fell from $83.6m to $27.4m, down 67%. By 2005 Pokémon was no longer even named among its main properties.
Agents keep only a slice. 4Kids said it usually kept “between 10% and 40% of the owner's licensing royalties”. Its own share of the guaranteed minimum on the master toy licence for 2000 and 2001 was about $30m. Dividing back through that commission puts the guarantee to the licensor somewhere between $75–300m, a wide model, payable to Nintendo as licensor of record.
Did any of it reach Tokyo? One 2001 4Kids release hints at separate arrangements with TPC for Pokémon, which is a real tension in the record. But the parent’s profits in those years were tiny, and Nintendo’s share of all its affiliates’ results was negative. A royalty stream of billions of yen sitting in the Tokyo company would have shown. It did not.
The bust landed on the licensees
4Kids’ Pokémon revenue and Hasbro’s Pokémon card sales, the boom year against the year after. Hasbro’s fall is the floor its own filing allows.
- Hasbro’s Pokémon card sales
- 4Kids’ Pokémon revenue (licensing agent)
The craze’s losses sat on the companies Nintendo had hired, not on the Tokyo steward.
Built from , and .Show the numbers
| Year | Hasbro’s Pokémon card sales, $m | 4Kids’ Pokémon revenue (licensing agent), $m | Source |
|---|---|---|---|
| 2000 | |||
| 2001 |
Hasbro’s Pokémon card sales. 2000: 15% of Hasbro’s net revenues. 2001: no product line above 10% of net revenues, so this is a ceiling, a fall of at least 48%.
4Kids’ Pokémon revenue (licensing agent). Agent commission, not card sales: down 67.2%.
Taking the jobs back
TPC’s answer to the bust was to bring the work in-house. The vehicle was Pokémon USA, set up in February 2001 and today called The Pokémon Company International (see TPCi). The steps came years apart:
- The English card game, 2003. Pokémon USA took over production when “the last of Wizards' original contracts ran out on September 30”. By 2006 a 4Kids filing named Pokémon USA among “the companies that distribute the” card game.
- Western licensing, 2006. Late in 2005 4Kids announced it “agreed not to renew the Pokemon representation agreement”, and Pokémon USA took over licensing outside Asia from January 2006.
- Japanese card distribution, about 2012. Media Factory sold the Japanese cards at first and “continued to distribute the cards until 2012”, after which TPC took the role. That date rests on secondary sources, so it is graded C.
TPC did not take everything. It kept outside master licensees for things it would rather not manufacture. From February 2012 its US arm licensed TOMY International to make Pokémon toys outside Asia, a deal that ran until June 2018. The toys then went to Wicked Cool Toys and later Jazwares. In Japan the licence still renews a year at a time through the agency ShoPro. The pattern is that TPC absorbs the agent and the card publisher, and keeps renting out toys.
Meanwhile the cards were not booming. About 14.0bn cards had been sold worldwide by mid-2007, and about 21.5bn had been produced by March 2015. That works out to roughly 0.97bn a year, slower than the first decade’s 1.31bn. The two counts use different bases, sold against produced, so treat the rates as rough. There was no DS-era card boom. One pattern stands out: TPC’s three profitable years in a row, from 2013 to 2015, came just after it took Japanese card distribution back from Media Factory, which may be coincidence but fits the cards already being the business that mattered.
The one price ever paid
In October 2005, 4Kids sold its small TPC stake back to the three owners. Its annual report records proceeds of $0.96m. The stake was a small slice, so the price values the whole company at about $32m. That is the only time a share of TPC has changed hands at a price anyone can see.
It was a price close to book value. Converted at an assumed exchange rate, it comes to 1.1–1.3× the parent’s net assets, and 4.5–4.9× its profit for the year. Nintendo’s filings show what happened next. Its stake was 31% in March 2005 and 32% by March 2009. That step is exactly 600 shares, a third of 4Kids’ block, which fits an equal three-way split among the owners.
Nobody put money in, and almost nobody took money out. TPC’s capital has been ¥365m since 2001. Over eighteen years the gaps in the profit roll-forward add up to ≈¥83m of payouts. Only one, ¥60m in FY2/09, looks like a clean dividend. Book value grew from ¥0.6bn to ¥3.0bn in the first half-decade, and to ¥10.1bn by FY2/15, all of it kept profit.
So the founders were not living on TPC dividends. Whether they were paid in royalties as copyright holders or in development fees is not observed.
Profit kept
Retained earnings of TPC’s Tokyo parent, ¥ billion, years to February.
In its first eighteen years the company kept almost all of the little profit it made.
Built from , and .Show the numbers
| Year to February | Retained earnings of the parent company, ¥bn | Source |
|---|---|---|
| 1999 | ||
| 2000 | ||
| 2001 | ||
| 2002 | ||
| 2003 | ||
| 2004 | ||
| 2005 | ||
| 2006 | ||
| 2007 | ||
| 2008 | ||
| 2009 | ||
| 2010 | ||
| 2011 | ||
| 2012 | ||
| 2013 | ||
| 2014 | ||
| 2015 | ||
| 2016 |
Retained earnings of the parent company. From a single blog transcription of the gazette notices. 2002 was not transcribed: it is drawn at the profit made to that date, which is what the trainer’s notes’ estimate assumes. Profit over 1999–2016 was ¥10.48bn against ¥10.39bn kept, leaving about ¥0.08bn assumed paid out.
What it adds up to
For its first eighteen years, the company that runs Pokémon was a small caretaker. It earned a couple of billion yen in a good year and lost money in several, while the first craze made fortunes for the Western companies Nintendo had hired, and the bust fell on them. TPC used the quiet years to take the work back one job at a time, the cards, the licensing, Japanese distribution, without new capital and almost without paying anything out. When Pokémon GO and the card boom arrived, they landed on a company already set up to sell its own cards.