Nintendo’s lawsuit against Palworld is motivated by the potential for a significant financial gain, likely in the “hundreds of millions” range, according to industry analyst Serkan Toto. Toto, who is familiar with Nintendo’s aggressive legal approach, highlights the strength and reputation of Nintendo’s legal team, particularly in Japan.
He notes that Nintendo only pursues legal action when it is confident of success, especially when dealing with intellectual property (IP) disputes, where the company is famously protective.
Toto explains that the delay in the lawsuit, which was filed seven months after Palworld’s release, is likely due to Nintendo’s desire to build an airtight case.
Rather than acting impulsively, the company appears to have thoroughly prepared its legal strategy, ensuring that every possible argument from the defendant, Pocketpair, could be countered. According to the analyst, this deliberate approach shows that Nintendo believes it has a very strong case and is likely to win the lawsuit.
Historically, Nintendo has an impressive track record in legal battles within Japan, particularly when it initiates lawsuits over IP issues. Toto states that he can’t recall a case in which Nintendo has lost, further emphasizing the uphill battle that Pocketpair faces. He believes that Pocketpair is in a vulnerable position, and Nintendo is likely pursuing the lawsuit with the expectation of securing a significant financial settlement.
The potential financial outcome for Nintendo could be substantial. Toto points to a previous case where Nintendo settled with mobile developer Colopl for $21 million, suggesting that the Palworld case could result in an even larger settlement.
Although it is unclear which specific patents Nintendo is targeting, the large revenue Palworld has generated makes it an attractive target for Nintendo, and the lawsuit could lead to tens of millions of dollars in damages.
While Pocketpair has expressed its intention to fight the lawsuit, Toto speculates that the company may eventually seek a settlement.
Palworld’s success and relatively low development costs have given Pocketpair a large financial cushion, but a drawn-out legal battle with Nintendo could force the company to part with a significant portion of its profits. Ultimately, the lawsuit is shaping up to be a major financial reckoning for Pocketpair, with Nintendo poised to claim a large share of its earnings.
