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Nintendo filed a lawsuit against Pocketpair, Inc.
(www.nintendo.co.jp)
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I've never heard of TemTem before and plugging it into Google Trends, it looks like it's not even comparable to Palworld. It's still somewhat big, looks like 500,000 copies sold. But still doesn't really compare to what appears to be nearly 20 million Palworld players.
Companies lose rights to protect their IP if they don't protect it themselves, so it may be in their best interest to go after the big competitors and pretend they've never heard of TemTem.
500,000 copies sold is not insignificant. Nintendo fries even the smallest of fish. They'll literally go out of their way to fuck up someone's small hobby project only a niche few even care about. So if Nintendo is turning blind eye to a game that copied them in every way one could possibly copy a Pokemon game, then there's something else going on.
Remember, this is not a copyright case, this is a patent case. Considering Palworld is the only game vaguely similar to Pokemon in some minor ways that I've seen use spheres as a catching tool, I'm just (blindly) guessing it MIGHT have something to do with that.
There is also cassette bests. It just makes it obvious that they fon't care about their ip or it's not out of principle, it's just because someone else made a game that don't suck and people like, which is something they can not do.