Tamagotchi Boom Cost Bandai $38 Million And Unsold Stock Was Buried, Atari-Style

The Tamagotchi virtual pet is one of the defining toys of the 1990s, and following its 1996 launch had managed to sell a staggering 20 million units worldwide by spring 1998.

However, as reported by Automaton West, the bubble burst pretty quickly, and soon Bandai was seeing stock being returned from disgruntled retailers who were struggling to shift them.

This trend was reported in Japan back in 2022 via the TV show Shikujiri Sensei and recently resurfaced on social media as Gundam fans questioned why Bandai was so reluctant to produce more of its popular 'Gunpla' model kits, which often sell out as soon as stock is available. The Tamagotchi situation was cited as one of the key reasons for Bandai's deliberate attempts to make sure demand always outstrips supply.

According to Shikujiri Sensei, it got to the point where new Tamagotchi models were being designed at a breakneck pace because those departments within Bandai assumed sales remained brisk when, in fact, unsold stock was being returned to the manufacturer at an alarming rate.

Apparently, Bandai was wrong-footed by the fact that customers were making multiple reservations for new stock at different stores but only buying one unit when stock arrived, painting the picture that demand was still sky high.

The end result was that the company massively overproduced Tamagotchi units, and this resulted in 2.5 million units being disposed of – a 6 billion yen (around $38 million USD) loss.

Shikujiri Sensei also alludes to a rumour that a large number of unsold Tamagotchi were buried on Tokyo’s manmade island of Odaiba, echoing the stories of Atari dumping stock in the desert – an urban legend which later turned out to be true.

Despite this wobble, Bandai has periodically kept faith in the Tamagotchi brand and even relaunched it in recent times – although nowhere near on the same scale as it did back in the 1990s.