Pokemon Movie Rights Bidding War as China's Legendary Makes Big Play for Japanese Property

Warner Bros. and Sony also are vying for the popular children's game property.

Can Chinese and Japanese companies come together over a hot children's property?

A top-secret auction for film rights to the Pokemon franchise is nearing completion with Thomas Tull’s Legendary Entertainment attempting to nudge aside Warner Bros., which has pursued the property aggressively, according to sources. Sony also is said to be very interested.

A spokesperson for Legendary, which since January is a division of China's Dalian Wanda Group, declined to comment. But the notion of a Chinese-owned company acquiring a beloved Japanese property could raise a stir given historic tensions between the two countries.

The Pokemon Co., the Japanese outfit that manages the rights to the franchise spun from the hit Nintendo game, has been courting Hollywood to launch a big-budget live-action movie. Warner Bros. was among the early favorites to take on the task, considering it already released the animated Pokemon: The First Movie in 1999 (it grossed $165 million worldwide) and two low-budget sequels.

However, Legendary has now emerged as a potential victor to bring Pikachu and other Pokemon characters to theaters, according to a source. And that could pose a potential problem considering Legendary's ownership by the Chinese real estate and investment conglomerate Wanda. There have been long simmering political tensions between Beijing and Tokyo, which most recently peaked with Japan’s criticism of China’s territorial ambitions in the South China Sea. Those pressures have also led to a cultural strain between the two countries in which China effectively banned Japanese films for three years, which was only recently broken.

Legendary, for its part, already has made inroads into Japan’s film industry. Tull’s company, in partnership with Warner Bros., brought Godzilla to the big screen in 2014 in tandem with Japan’s Toho Co. (which owns the rights to the iconic monster and, coincidentally, made the animated Pokemon films). Legendary and Warner Bros. plan to release other movies in the franchise, including Kong: Skull Island next year, Godzilla 2 in 2018 and later Godzilla Vs. Kong.

Warner Bros. and Sony declined to comment.