A test of the games-revenue estimate against the Tokyo company’s filed gross profit, years to February 2021–2026

What this is

A test of the games-revenue estimate against the Tokyo company’s filed gross profit, years to February 2021–2026: the high end is impossible in 2022, implausible in 2021 and 2023.

How it’s built

1. Take the high-end estimates of console receipts from Nintendo and the Pokémon GO licence take, which are almost pure profit to The Pokémon Company.
2. Compare them with the Tokyo company’s filed gross profit for each year.
3. In the year to February 2022 they would be ¥111bn against gross profit of ¥98bn, so the estimate is capped at ¥98bn.

What we assumed

• Console receipts and the GO take carry almost no cost of their own.Both are royalty-like payments, so nearly all of each yen would show up as gross profit.
• Using 80% or more of gross profit counts as implausible.Cards and merchandise also earn gross profit, so games cannot plausibly take nearly all of it. The threshold is a judgement.
• These receipts are booked in the Tokyo company, not the overseas arms.Only the Tokyo company publishes accounts, so this is the only ceiling available.

Sanity check

From the year to February 2024 the test no longer bites (25–39% of gross profit) because cards and Pocket grew so much. Capping GO at the Tokyo company’s pre-tax profit lowers some highs further.

Where it comes from

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