Nintendo’s core strength is their IP. Sony lacks similar strength and has been performing poorly, so they backed Palworld to bring a popular Pokemon-like game t

Nintendo’s core strength is their IP. Sony lacks similar strength and has been performing poorly, so they backed Palworld to bring a popular Pokemon-like game to PlayStation. Nintendo wouldn’t win a copyright claim because Palworld would argue satire fair use in the US/other reasons in Japan. Nintendo doesn’t want to go to court with a trademark claim because any ruling that’s not totally in their favour would damage the value of their Pokemon IP. Going to court over patents is really about protecting the trademark, without risking a judgement against them that damages the trademark. A judgement against the patent(s) is a more acceptable risk.