A test of whether Creatures’ and Game Freak’s profits could come from cost-plus development fees

What this is

A test of whether Creatures’ and Game Freak’s profits could come from cost-plus development fees: their actual profits were about 3.3–3.7 times the most such fees could plausibly yield.

How it’s built

1. Estimate staff: Creatures about 168 in March 2020 (between counts of 84 and 274), Game Freak 81 in 2015.
2. Put staff cost at ¥10–15m per head, add up to the same again for other costs, apply a 10–30% markup and a 31% tax rate.
3. That gives a ceiling of about ¥1.05bn profit for Creatures and ¥0.5bn for Game Freak, against actual profits of ¥3.87bn and ¥1.64bn.

What we assumed

• Creatures’ headcount grew in a straight line between its two known counts.The research gives no year-by-year counts; a CG studio opened in 2017, so growth may have come earlier.
• Fully loaded cost is ¥10–15m per employee per year.The research gives no direct evidence for this; the conclusion only breaks if cost were ¥40m or more per head.
• Other costs are at most equal to payroll, and a cost-plus markup is 10–30%.Stated as working assumptions; outsourcing of five times payroll or more would break the conclusion.
• Neither profit year contained a one-off gain.Neither company discloses revenue or a profit breakdown, so this cannot be checked.

Sanity check

The gap is large: profit exceeds plausible payroll outright, which suggests income linked to sales volume (royalties or profit shares) or very rich fixed fees. But it rests on two snapshot years only.

Where it comes from

Our calculation from other figures in the trainer’s notes.

Where it’s used

• StoryThe founders
• Chart · The foundersEach founder earned more than three times the most that fees for its work could explain
• ProfileCreatures Inc.

Related figures

Built from this one

• EstimateHeadcount growth series derived, Apr 2021 - Apr 2026
• EstimateShare of TPC’s cost of sales that a headcount-scaled fee could explain, year to February 20243.1–9.4%