Nintendo reports huge lawsuit losses as Palworld trial continues

While Nintendo'with Palworld lawsuit is still not in sight, the Japanese gaming giant suffered tens of millions of dollars in litigation losses during its just-concluded fiscal year. However, some indicators suggest that this spending may not come from Palworld a case that Nintendo is still actively pursuing.

A September 2024 lawsuit jointly filed by Nintendo and The Pokemon Company accused Pocketpair of infringing their patents Palworld. The case brought before the Tokyo District Court centered on Palworld's creature switching and capture mechanics, with the plaintiffs seeking damages and injunctive relief.

Nintendo reports over $40 million in litigation losses for fiscal year 2026

Like Palworld patent lawsuit approaches its second anniversary, Nintendo's litigation costs have soared, according to the company's consolidated financial report for fiscal 2026. The report, released May 8, cited 6.414 billion yen, or just under $41 million, in litigation expenses incurred during the 12-month period ending in March 2022, the case provided no other information. to the cause(s) of reported expenses. Litigation accounts for nearly 96% of the company's “extraordinary losses” for the reporting period, with disposals of fixed assets — which can mean anything from office equipment to buildings — reported as the remaining $1.7 million in losses.

Looking more broadly, the fact that Nintendo is still actively pursuing Palworld The lawsuit suggests that its case against Pocketpair may not count toward the newly reported litigation losses, or at least is unlikely to be a major contributor to the roughly $41 million. Since this line item is labeled as a lawsuit loss rather than a routine legal expense, it is more likely to reflect an adverse settlement, licensing agreement, or similar settlement than the ongoing costs of a lawsuit that Nintendo itself has decided to pursue.

Nintendo's Fiscal 2026 Litigation Losses May Stem from Recent Settlement of Former BlackBerry Patents

One likely explanation is Nintendo's recently settled patent dispute with Malikie Innovations and Key Patent Innovations, which centered on the Switch family of devices allegedly infringing earlier BlackBerry patents. The case was filed in September 2024 and appears to have moved toward a confidential settlement during Nintendo's last fiscal year, with related patent review proceedings later terminated. Because Nintendo has defended itself against claims of infringement in this dispute, and because the terms of the settlement have not been made public, the timing and standing of the BlackBerry patent case make it a stronger candidate for Nintendo's newly reported litigation costs than its still-pending Palworld case or recent enforcement actions in which Nintendo was the plaintiff.

In what is the company's most high-profile lawsuit in recent memory, lawyers for Nintendo and Pocketpair are still battling it out Palworld patent case as recently as September 2025. Pocketpair launched a dual defense strategy, arguing that it did not infringe the plaintiffs' patents while challenging their validity. If it loses, Nintendo could risk having the patents it sued for invalidated or having their definitions narrowed down by the presiding court. As of May 2026, there is still no indication whether the case is any closer to a settlement or trial.

Sources: Games Fray