Founding The Pokémon Company: from hit to franchise (1998)

Turning characters, not hardware, into the asset

The heart of this decision was not landing one hit product but setting up an organization to keep its characters alive for the long term. What Tsunekazu Ishihara said again and again was that when the rights are scattered across companies, you lose sight of where and how a character is being shown, and it stops reaching children in the order its creators intended. Reorganizing the Pokémon Center — first built by three companies — into The Pokémon Company, and binding the related firms together as its shareholders, was meant to shift from selling by riding the heat of a boom to selling by managing exposure to preserve the character’s value. It was, one could say, an attempt to design a lifespan as an asset rather than the lifespan of a one-off hit.

The boom that Nintendo of America engineered with an investment of about $22.9M (¥3bn) showed in practice that, with names changed to American style and the animation remade for English, the same characters could sell across borders. Yet what lasted for Nintendo was less the boom itself than the mechanism for gathering and managing the rights in a single company. A console maker’s results are easily whipped around by whether its next hardware lands. Against that, the meaning of this decision lay in making it possible to hold, in corporate form, a pillar of revenue — IP — that is relatively insulated from the hardware generational cycle.