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The Pokémon Company’s profits rose by a bonkers 2,600 percent last year

The Pokémon Company’s profits rose by a bonkers 2,600 percent last year

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Pokemon Go
James Bareham / The Verge

The Pokémon Company had a very good year in 2016. Following the release of Niantic’s Pokémon Go and Game Freak’s Pokémon Sun and Moon, the company’s net profit soared to $143.3 million — nearly 26 times the profit it made the previous year, according to Katan Games, Inc. CEO and analyst Serkan Toto.

In a breakdown on his site, Toto recounts profits for the previous five years. (Fiscal years close at the end of February.) The 2015 fiscal year drew in only $5.6 million. Of the last five fiscal years, the highest profits came in 2014, where the company reported $18.4 million in profits.

Speaking to The Verge via email, Toto points to Pokémon Go as the “key factor” for the sharp rise. “It's widely known that if a developer lands a big hit on mobile, the profitability is much higher than for other platforms,” Toto says. “Some publicly traded mobile-game makers in Japan, for example, regularly boast operating profit margins of 40 percent and higher.”

The Pokémon Company is in charge of the overall brand, while companies like Game Freak or Niantic may develop specific games. Niantic published Pokémon Go, while Nintendo frequently distributes other Pokémon games. Over the last five years, the series’s catalog includes the launch of Pokémon Black 2 and White 2, Pokémon X and Pokémon Y, and Pokémon Omega Ruby and Alpha Sapphire. “Sure, Sun and Moon was selling even better than those titles last fiscal,” Toto says, “but the games were not that huge.”

The company’s net profit places it higher than many other game studio in Japan, he added, “except for the few lucky mobile-app makers on the very top of the pyramid.”

“I think that thanks to Pokémon Go being a mobile title and Niantic getting better at live operations (at servicing, updating, tweaking the game), The Pokémon Company will continue to enjoy handsome profits over the next years.”