'Nintendo felt threatened' by Palworld's sales success and anime expansion, analyst says: 'This lawsuit would have never happened if Palworld had 500 users per day'

Nintendo's lawsuit against Palworld developer Pocketpair is likely due to the game's success and its expansion into multiplatform, anime, and merchandise, which threatens Nintendo's market dominance and lucrative business model. Analyst Serkan Toto believes that Nintendo is likely to pursue a larger settlement than its previous lawsuit against Colopl, showcasing their anger and desire to stake a claim on Palworld's impressive earnings.

Nintendo's decision to file a patent infringement lawsuit against Palworld developer Pocketpair would probably "have never happened" to a smaller game, according to one analyst.

Speaking to GamesRadar+ about Nintendo's Palworld lawsuit, Dr Serkan Toto says that a smaller game would likely have flown under Nintendo's radar and that even the company's "feared" legal team would have left Pocketpair alone. "This lawsuit would have never happened if Palworld had 500 users per day on Steam," Toto says. "[Nintendo] would have said, 'ok, whatever, let's leave these guys alone; the game will die.'"

But Palworld did not die, becoming one of the highest-played games on Steam and shifting tens of millions of sales. That success appears to be leading to a Palworld PS5 announcement at Tokyo Game Show, which is also marked out by a Palworld anime partnership with Sony's Aniplex subsidiary. It's that multiplatform expansion, as well as a move into the anime and merch world that makes up such a big slice of Nintendo's pie, that is likely to have brought attention to Pocketpair.

"You cannot do this with Nintendo," Toto says. "I understand that Nintendo was foaming at the mouth, saying, 'Look, these guys are going multiplatform, and they're making anime and merchandising their Pals.' And Nintendo felt threatened or disrespected or just angry, and they dropped this bomb on them."

Toto points to Nintendo's last major patent lawsuit win - its 2017 filing against Japanese mobile giant Colopl, which was raised over six patents and eventually settled for ¥3 billion (around $21 million) in 2021, continuing to earn Nintendo licensing fees to this day. Back then, Toto claims, Nintendo "could have sued half of the gaming industry. They just had the desire back in 2017 to spit in Colopl's bowl, and came up with these patents. They have thousands and thousands of patents on other things. And they can decide when they want to initiate a lawsuit, and when they don't want to initiate a lawsuit.

"I think for Pocketpair, the challenge will be bigger. I think Nintendo will go after them in a bigger way, will ask for more damages than just 3 billion yen. My feeling is that Nintendo is a lot angrier with Pocketpair than with [Colopl]. It's like a mafia. They will not kill you instantly. They will let you cook a little bit."

While part of the long wait between Palworld's release and Nintendo's lawsuit is the former's expansionism, Toto remarks that the other part is a desire to ensure an airtight attack. That "feared" legal team will have been working hard to remove any potential defenses from Pocketpair's lawyers' toolkit, and that takes time. All told, Toto thinks it's looking like bad news for the Palworld studio, and that Nintendo will be looking to stake a claim on some of its impressive takings over the past seven months.

Not everyone's convinced by Nintendo's angle, and one lawyer thinks the company "may be reaching."