WoTC and Pokémon Trading Card Game

General
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Wizards of the Coast, or “WOTC” for short, is the producer of hobby gaming systems owned by Hasbro, including Magic: the Gathering and Dungeons and Dragons. From 1998 until 2003, Wizards of the Coast was responsible for translating and distributing Pokémon trading cards created by Media Factory (then by The Pokémon Company). On October 1, 2003, Wizards of the Coast’s license to translate and distribute Pokémon Trading Card Game was transferred to The Pokémon Company International by Nintendo. After the license was transferred, Wizards of the Coast sued Nintendo claiming Nintendo stole certain insider secrets. Both parties settled outside of court in December 2003.

Does anyone have more inside information on this?

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www.bizjournals.com/seattle/stories/2003/10/13/story2.html

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The only gossip I’ve ever heard (which I cannot directly confirm or corroborate) is that WotC felt responsible for the success and popularity of the Pokémon TCG. They thought it was “their game” and that they deserved more credit for its success. After the Neo sets, WotC wanted to produce their own cards on their own schedule, while still releasing and printing localizations, instead of being beholden strictly to translated Japanese cards.

So you had WotC, who felt they were the unshakeable keepers of the Pokémon card game and wanted greater independence for how it was produced and played, and then you had Nintendo and TPC who were not comfortable with their incredibly valuable and lucrative brand being licensed to some outside company who wanted to control it.

Internally on the Pokémon side, the clear goal was to regain control of their brand. So they did, quite ruthlessly, poaching talent and breaching contracts in the final year of the relationship. WotC was blindsided and burned by this. The fact Pokémon had been taken away from them was unimaginable. WotC went to court with TPC for violating their terms and allegedly stealing their trade secrets. The outcome of this case is not known.

It is easy to see Nintendo/TPC as the bad guys here. They were really uncharitable and arguably unscrupulous towards WotC at the end. However I can understand the discomfort they must have felt over the arrangement. Pokémon was licensed out in the infancy of the brand before it became the sensation it was. Once Pokémon became a worldwide phenomenon — on its way to become the biggest brand of all time — the idea of an outside entity having so much control over your property was definitely unappealing. I think no matter what, TPC would have always taken production over for themselves when the WotC contract ended. But it is too bad that WotC, whose infrastructure and expertise made the TCG what it was, was cast aside so unceremoniously.

But WotC, for as much as they supposedly cherished the brand (or maybe the money the brand brought in), really couldn’t keep their heads on straight. Cards saw lots of errors and mistakes, really dodgy print quality, lots of delays and supply issues, and a ton of cards that were never brought over. It is easy to look at WotC’s track record and think their releases were marred by incompetence. But despite their missteps they are a major contributor to what Pokémon is today.

I don’t think we’ll ever get the whole story and I think it’s best to be pragmatic about their legacy. Some things were good and some things were bad, but that relationship was always doomed by Pokémon’s runaway success. All we can do is take it for what it was.

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Article for those who can’t get behind the paywall:
Renton-based game developer Wizards of the Coast Inc. has sued Redmond-based Nintendo of America Inc. and several affiliates for breach of contract and patent infringement over the hit Pokemon trading-card game.

The lawsuit, filed Oct. 1 in U.S. District Court in Seattle, accuses Nintendo affiliate Pokemon USA of abandoning a contract with Wizards, the longtime producer and distributor of Pokemon trading-card games, and using Wizards-patented methods and technology to manufacture the games itself. The lawsuit also names two former Wizards executives who were hired away by Pokemon USA, accusing them of revealing trade secrets.

The suit provides a glimpse of a bitter behind-the-scenes dispute over the Pokemon trading-card games, which became hugely popular in the late 1990s and sold millions of copies nationwide. The game allows players to do imaginary battle using illustrated cards.

Wizards, a subsidiary of Hasbro Inc., claims it pioneered the idea of a trading-card game and holds the patent rights to it. Its own Magic: The Gathering card game became a cult phenomenon, and generated sales of hundreds of millions of dollars in the mid-1990s.

The company signed an agreement with Nintendo in 1998 to manufacture and distribute the Pokemon trading card games outside Asia, the lawsuit says. The Pokemon companies are affiliates of Nintendo’s parent company in Japan, according to the suit.

The collaboration lasted for several years, but relations between the partners began to sour in 2002, when Pokemon USA hired away a Wizards senior vice president, Richard Arons, and a vice president, Rene Flores, according to the lawsuit. Several other Wizards executives also went to work for Pokemon, says the suit.

In March 2003, Pokemon USA refused to allow Wizards to release two trading card games – the Jamboree and Legendary II expansion sets for the Pokemon Gold & Silver edition – which the Wizards team had spent considerable time and money developing, says the suit. Pokemon also informed Wizards that it had not been chosen to manufacture and distribute a new Pokemon trading-card game, the Ruby/Sapphire edition, the lawsuit says.

Pokemon began producing the Ruby/Sapphire edition itself – using Wizards’ proprietary methods and materials, according to the lawsuit – and made Nintendo the distributor.

The lawsuit says Pokemon representatives offered to approve release of the Legendary II set, if Wizards agreed to provide free marketing support and confidential information about tournament players. Wizards refused. The day after its last set of agreements with Pokemon USA expired on Sept. 30, Wizards filed the lawsuit, seeking a trial by jury and unspecified damages.

The lawsuit accuses Pokemon of soliciting and hiring at least seven former Wizards employees to work on the Ruby/Sapphire trading-card game edition, including Wizards’ former art director, senior graphic designer, business manager, events marketing director and project management director.

All had signed nondisclosure agreements prohibiting them from using or disclosing confidential information about Wizards to third parties, according to the lawsuit.

The lawsuit alleges that the former Wizards employees had access and were responsible for “every critical” stage of converting the Japanese version of the Pokemon Ruby/Sapphire edition to English, as well as manufacturing, packaging, marketing and distributing it.

The suit accuses Pokemon USA of using Wizards’ proprietary information to solicit Wizards’ distributors, vendors and customers.

“Wizards of the Coast has built tremendous brand equity over the years with our popular proprietary trading-card games and aggressively seeks to protect its valuable intellectual property and trade secrets,” Wizards said in a statement.

Barbara Dawson, a spokeswoman for Wizards, said the parties had entered into settlement talks but provided no further details.

Pokemon USA, in a written statement responding to the suit, insisted it did nothing wrong or illegal. “We were sued the day after our distribution agreement with Wizards ended. We are confident that we’ve acted both legally and fairly with respect to Wizards and believe the issues will be resolved,” the company said.

Nintendo of America, which owns the Pokemon trademark in the United States, did not return calls seeking comment.

This brings up something really interesting that I’ve never heard of before now:
“In March 2003, Pokemon USA refused to allow Wizards to release two trading card games – the Jamboree and Legendary II expansion sets for the Pokemon Gold & Silver edition – which the Wizards team had spent considerable time and money developing, says the suit. Pokemon also informed Wizards that it had not been chosen to manufacture and distribute a new Pokemon trading-card game, the Ruby/Sapphire edition, the lawsuit says.”
“The lawsuit says Pokemon representatives offered to approve release of the Legendary II set, if Wizards agreed to provide free marketing support and confidential information about tournament players.”
This begs several questions:1) What cards were supposed to be in jamboree?! (Jamboree (TCG) - Bulbapedia, the community-driven Pokémon encyclopedia)2) What cards were supposed to be in Legendary II? new art?
Most importantly…
3) Why the hell did the pokemon company want ‘confidential information’ about tournament players? What was that information exactly? I know that in Japan, competitive play is the main focus of pokemon players (TCG and videogames), and has remained that way to this day. How would know the information of those players, in the japan or globally, helped them or given them some kind of advantage? What made it so valuable?

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So following this topic, what prevents TPC from reprinting all of the WOTC sets (Base, Neo, etc) in an exact 1:1 copy rather than something like Evolutions?

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Mechanical function. First and foremost, Pokémon cards are meant to be played. So any release has to take function and format in to consideration. The features of these older cards aren’t directly compatible with modern game standards. Evolutions updated the stats and functionality of the cards so that they could still be used in a modern context.

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Thanks for posting the whole article, by the way.

“Confidential information” could mean lots of different things, but I think most likely it was demographic information (age, race, gender, etc) of consumers. Audience demographics are valuable and serve as the basis for a lot of marketing and business decisions because companies want to capitalize on and expand on their demographics. This information would allow Nintendo to know which groups were already the biggest fans of the game, which groups saw growth potential, and which groups to target for expansion. If I was taking over a major international business, this would be really valuable information.