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Forums - Nintendo Discussion - Nintendo Only Gets About 10% Of Money Spent on Pokemon GO

Aquamarine on 11 July 2016

For reference:

 

Aquamarine said:
CovenanterA13 said:

One thrid of 30% is 10% of the Pokemon company's share (though they don't directly as that will be funneled into future Pokemon endeavours rather than go back to Nintendo directly) Nintendo also owns a small part of Niantic.

You're correct.

For those who are confused, it's like this:

 

Nintendo directly owns 32% of the Pokemon Company

Nintendo owns 35% of Creatures Inc. -> Creatures Inc. owns 32% of The Pokemon Company -> Nintendo indirectly owns 11% of The Pokemon Company

=

Nintendo owns 43% of The Pokemon Company directly and indirectly

 

 

30% of revenues from Pokemon Go go to The Pokemon Company, so Nintendo indirectly benefits from 13% of revenues of Pokemon Go (but they'll most likely just get reinvested into Pokemon)

In addition, an extra 10% of revenues go directly to Nintendo

=

Therefore, Nintendo benefits from 23% of revenues in total, excluding their small share in Niantic and the dividends they may accrue.

 

 

 

Veknoid_Outcast said:
This ownership structure of Pokemon is fascinating.

Could any of the parties involved split from the other? Could Gamefreak walk away from Nintendo?

Nintendo has significant influence over Creatures Inc. (35% direct ownership) and The Pokemon Company (43% direct and indirect ownership), so in the event Pokemon or Creatures Inc. tried to give the middle finger to Nintendo, then Nintendo would invoke a complex web of agreements and Japanese law to prevent Pokemon from going third-party even though Nintendo theoretically doesn't own a majority of Pokemon. Right now, Creatures Inc. can't do anything, so they just fall in line like good little peons.

If Nintendo decided to sell their share in Creatures Inc., then Game Freak and Creatures Inc. could technically gang up against Nintendo and put full-fledged Pokemon on iOS / Android / PlayStation 4 / Xbox / Steam. But that's not going to happen any time soon.

 

Game Freak is a third-party developer (Nintendo doesn't own a single share of Game Freak), so theoretically Game Freak could walk away any time they want from Nintendo and Nintendo would have to find a new Pokemon developer. That's why Sega just published a Game Freak game...nobody can tell Game Freak how to run their company.

But obviously Game Freak doesn't want to let go of its cash cow because that would be an incredibly risky venture with no guarantee of success. Pokemon works for them and it keeps them in business, so no need to rock the boat.



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think-man on 11 July 2016

I didn't even know Nintendo didn't own Pokemon.



 

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Veknoid_Outcast on 11 July 2016
Aquamarine said:

For reference:

 

Aquamarine said:

You're correct.

For those who are confused, it's like this:

 

Nintendo directly owns 32% of the Pokemon Company

Nintendo owns 35% of Creatures Inc. -> Creatures Inc. owns 32% of The Pokemon Company -> Nintendo indirectly owns 11% of The Pokemon Company

=

Nintendo owns 43% of The Pokemon Company directly and indirectly

 

 

30% of revenues from Pokemon Go go to The Pokemon Company, so Nintendo indirectly benefits from 13% of revenues of Pokemon Go (but they'll most likely just get reinvested into Pokemon)

In addition, an extra 10% of revenues go directly to Nintendo

=

Therefore, Nintendo benefits from 23% of revenues in total, excluding their small share in Niantic and the dividends they may accrue.

 

 

 

Veknoid_Outcast said:
This ownership structure of Pokemon is fascinating.

Could any of the parties involved split from the other? Could Gamefreak walk away from Nintendo?

Nintendo has significant influence over Creatures Inc. (35% direct ownership) and The Pokemon Company (43% direct and indirect ownership), so in the event Pokemon or Creatures Inc. tried to give the middle finger to Nintendo, then Nintendo would invoke a complex web of agreements and Japanese law to prevent Pokemon from going third-party even though Nintendo theoretically doesn't own a majority of Pokemon. Right now, Creatures Inc. can't do anything, so they just fall in line like good little peons.

If Nintendo decided to sell their share in Creatures Inc., then Game Freak and Creatures Inc. could technically gang up against Nintendo and put full-fledged Pokemon on iOS / Android / PlayStation 4 / Xbox / Steam. But that's not going to happen any time soon.

 

Game Freak is a third-party developer (Nintendo doesn't own a single share of Game Freak), so theoretically Game Freak could walk away any time they want from Nintendo and Nintendo would have to find a new Pokemon developer. That's why Sega just published a Game Freak game...nobody can tell Game Freak how to run their company.

But obviously Game Freak doesn't want to let go of its cash cow because that would be an incredibly risky venture with no guarantee of success. Pokemon works for them and it keeps them in business, so no need to rock the boat.

Thanks! This is so interesting to me. Is there anything Nintendo could do to achieve 51% ownership of the Pokemon Company? And would that translate to majority ownership of Pokemon the IP?



Teeqoz on 11 July 2016
Naum said:
10% of the from the game... not much but they have earned 10 billion in stock money

Nintendo doesn't earn anything on their stock rising lol. That money doesn't go to Nintendo, it's the value of their shares held by people everywhere that has increases.



gatito on 11 July 2016

Whatever money they're making it's great and they're also getting good advertisement from it by putting the Pokemon brand back in the mainstream.



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Sixteenvolt420 on 11 July 2016
hershel_layton said:
Still good money.


Annoying how the apple store gets 30 percent. Not like they do anything special by putting the game in the store.

They still own the store. Look at if you sell something in a private auction, or sites like Ebay and Amazon. It still ends up being roughly 20-25%. They could always come up with their own stuff to put the game on. Don't forget, none of us would have any smart phones without Apple.



method114 on 11 July 2016
hershel_layton said:
AlfredoTurkey said:

Are you serious? lol. I'd say exposing and/or creating a place to SELL THE GAME is pretty "special". Without a store to sell your goods, you make no money. 

Doesn't mean they should get over 20 percent. Anything above is overkill and just asking for too much

Well Nintendo is always welcome to remove their game and find other ways to sell it. 



method114 on 11 July 2016
Sixteenvolt420 said:
hershel_layton said:
Still good money.


Annoying how the apple store gets 30 percent. Not like they do anything special by putting the game in the store.

They still own the store. Look at if you sell something in a private auction, or sites like Ebay and Amazon. It still ends up being roughly 20-25%. They could always come up with their own stuff to put the game on. Don't forget, none of us would have any smart phones without Apple.

I've sold on both ebay and amazon they don't take that much it's more in then 10-15% range.



Aquamarine on 11 July 2016

double post



Aquamarine on 11 July 2016
Aquamarine said:
CovenanterA13 said:

One thrid of 30% is 10% of the Pokemon company's share (though they don't directly as that will be funneled into future Pokemon endeavours rather than go back to Nintendo directly) Nintendo also owns a small part of Niantic.

You're correct.

For those who are confused, it's like this:

 

Nintendo directly owns 32% of the Pokemon Company

Nintendo owns 35% of Creatures Inc. -> Creatures Inc. owns 32% of The Pokemon Company -> Nintendo indirectly owns 11% of The Pokemon Company

=

Nintendo owns 43% of The Pokemon Company directly and indirectly

 

 

30% of revenues from Pokemon Go go to The Pokemon Company, so Nintendo indirectly benefits from 13% of revenues of Pokemon Go (but they'll most likely just get reinvested into Pokemon)

In addition, an extra 10% of revenues go directly to Nintendo

=

Therefore, Nintendo benefits from 23% of revenues in total, excluding their small share in Niantic and the dividends they may accrue.

I also have an estimate as to the share that Nintendo owns of Niantic.

In a Feb. 25 Series A venture financing round, Niantic valued itself at $150 million.

 

So the $20 million that Google + Pokemon + Nintendo put into the company would theoretically imply a combined equity value of 13.33% assuming the same valuation.

 

Let's assume that the equity in the $20 million in Series A Funding from The Pokemon Company, Google, Inc. and Nintendo Co., Ltd. was evenly distributed.

Therefore:

$6.7 million -> Nintendo's investment in Niantic -> 4.44% Nintendo's Equity in Niantic

$6.7 million -> The Pokemon Company's investment in Niantic -> 4.44% Pokemon's Equity -> 1.91% Nintendo's Indirect Equity in Niantic (because Nintendo owns 43% of The Pokemon Company)

$6.7 million -> Google's investment in Niantic -> 4.44% Equity in Niantic

=

So in theory, Nintendo could own 6.4% of Niantic directly and indirectly.