On 23 November 1996, Bandai put a plastic egg on a ball chain into Japanese toy shops in six colourways. It cost 1,980 yen. Inside was a pixel creature that beeped for food, sulked when ignored, and could die.
Eight months later, ten million of them had sold in Japan alone. By the spring of 1998 the figure was around forty million worldwide, split roughly evenly between Japan and overseas. By any normal measure, the Tamagotchi was the toy of the decade.
And it still lost money. A lot of it.
The phantom demand
The trouble started with a reservation list. Japanese retailers took orders for Tamagotchi they did not have, and customers — understandably — placed reservations at several shops at once. Each of Bandai's divisions read the same lists, set its own shipment numbers, and kept supplying stores that reported shortages. Nobody compared notes. The total on paper was several times the number of actual buyers.
Bandai was manufacturing for people who did not exist.
The boom ended early in 1998, quickly and everywhere at once. Boxes came back. Warehouses filled. In March 1999 the company scrapped 2.5 million unsold units and took a six billion yen extraordinary loss on them. The year closed with a net loss of 16.3 billion yen — the worst in Bandai's history to that point. Inside the company, the biggest toy of the 1990s was being described as a failure.
There is a persistent rumour that the surplus eggs were buried under Odaiba, Tokyo's man-made island, during its redevelopment — a Japanese cousin to the Atari cartridge landfill. It has never been substantiated. It is also the kind of story people tell about a product that embarrassed its maker.
What the crash actually taught
Two lessons stuck, and you can see both in how Tamagotchi is run today.
The first is that scarcity is cheaper than surplus. Bandai's own account of the period notes that counterfeiters moved in just as the company finally caught up with demand, and that the boom collapsed with substantial excess inventory on hand. Since the 2004 revival, releases have been paced, regional, and frequently collaborative — a Blue Lock shell here, a Maison de FLEUR ribbon there — rather than one enormous global push.
The second is that a toy can outlive its fad if you stop treating it as a fad. Bandai kept shipping new models every few years through the quiet 2010s, and the audience that grew up with the first egg came back with disposable income and a phone full of nostalgia.
The number that matters now
As of 31 July 2025, Tamagotchi had shipped 100 million units worldwide, according to Bandai Namco. More than half went outside Japan. The Original Tamagotchi reissue — the Western 1997 model, sold abroad since 2018 and in Japan since 2022 — had moved 11.52 million units on its own by the same date, which means the replicas now outnumber the first editions they imitate.
Bandai calls the current period the fourth wave. Tamagotchi Paradise, released in July 2025, drew more than four times the preorders of the Tamagotchi Uni and sold 1.5 times its first-week projection.
So the 2.5 million eggs in the warehouse were not the end of the story. They were the tuition fee. Thirty years on, the pet that once arrived by the tens of millions too many is being made carefully, in smaller batches, for people who choose it on purpose.
That is a stranger and better ending than a burial under Odaiba.