Actually Pokemon is based off of bug catching and fighting, usually between stag beetles of the family Lucanidae, which have long jaws used for wrestling matches. After World War II, Japan was stricken with desperate poverty, so the fancy toys available during the Meiji period became scarce, so the only pastimes left were menpachi (a card game similar to pogs; in fact the Japanese immigrants in Hawaii simply substituted milk caps for the cards to create the game), marbles and beetle fighting. Even after the recovery of Japan, the sport continued, and nowadays many beetles are available with pedigrees and some, such as the Giant Stag Beetle, can sell upwards of $200 US dollars for one specimen. Still, many people simply go out into the woods to collect beetles, mostly the small stag beetle, or Ko Kuwagata, for battles. There are entire shops dedicated to the maintenance of prized beetles, including syurups specially designed for certain breeds, breeding kits, and housing. Some species can live upwards of 5 years, in it's adult stage, whereas it can spend many more years in it's larval stage inside a wood medium. The pokemon Pinsir is a nod to this origin.

It was only a short jump from the popular sport, to expanding to various different sorts of pet animals (dogs, cats, crows, catepillars) and fantasy animals (kappa, tengu, phoenix, spirit fox) as most Japanese children are raised with a extensive nature and ecology curriculum, as Japan has many natural preserves and the countryside is fairly close by in any part of Japan, and a cultural curriculum through the telling of classic folktales.

And lastly, everything in Japan, when popular, is merchandised. It it notoriously hard to open the purse strings of the public after the recession, since many people balled up their savings, and recycled everything in order to avoid spending as much as possible.

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We're unofficially better than you *countefeit blank stare*

"You don't know a thing about it! You just think it's something with 'class', don't you!? That's why you can act so high and mighty!!" Kentaro Takekuma on art