From Bulbapedia, the community-driven Pokémon encyclopedia.
The Masuda method, also known as Masuda's method (Japanese: 国際結婚 international marriage), is a fan-made term which describes a way to obtain Shiny Pokémon more easily in Generation IV and V. Rather than encountering Shiny Pokémon with a probability of 1/8192, the Masuda method lets players breed Pokémon of differing real-world geographical origin with a 1/1639 (Generation IV) or 1/1366 (Generation V) probability of being Shiny upon hatching.
It is named for Game Freak director Junichi Masuda, who programmed it into Pokémon Diamond and Pearl. He documented the method in his blog, where he mentioned a way for "rare colored Pokémon's Egg [to] be found little easier." The mechanics behind this were discovered by Smogon.
The key to using the Masuda method is not to breed any two Pokémon, but to breed two Pokémon created in games of different countries. An Egg resulting from such a pairing will have a higher likelihood of being Shiny. The most common way to arrange such a pairing is to use one foreign Pokémon and one from the game in which the breeding occurs, although the method will work in any game provided at least one of the Pokémon in the pair is from a country different to the country of the game cartridge.
If both Pokémon are foreign to the cartridge but are both from the same country, then the Masuda method will not take effect. Foreign language Pokémon obtained via in-game trades, such as the Meister's Foppa and Lt. Surge's Volty, are treated as being from the same country as the game, because they are generated in the same cartridge, so they cannot be bred with another Pokémon from the same country for the Masuda method. In Generation IV, if the Masuda method is in effect, so both parents come from different countries, the Everstone will fail to increase the chance of passing on a nature.
A Pokémon traded internationally while still in its Egg will retain the internal marking which recognizes it as a foreign Pokémon even though it appears to be native to the cartridge it was hatched in.
Some examples are illustrated below; Pokémon bred in circumstances which invoke the Masuda method and have an increased chance of being Shiny are denoted by their Shiny sprite.
Mechanics and reasoning
The Masuda method is possible because of an internal marker on each Pokémon which identifies their "home location", 0x17. If the game recognizes the two Pokémon in the daycare as having different home locations, then the chances of the Egg hatching into a Shiny Pokémon will increase. In Pokémon Diamond, Pearl, Platinum, HeartGold, and SoulSilver, the odds will be increased by five times: from the usual 1/8192 to 1/1639. In Pokémon Black and White, the odds were increased again, to 1/1366. This is six times as likely as encountering a Shiny Pokémon in tall grass.
Reaction and purpose
From Generation IV onwards, trading with games from other countries became easier due to the Nintendo DS's ability to communicate through Nintendo Wi-Fi Connection. The Masuda method was likely coded as incentive for players to use the GTS's international trading services.
Though the odds of obtaining a Shiny Pokémon are still fairly low, the chances have now been increased so significantly that players have touted it as a more reliable method than the Pokémon Diamond, Pearl, and Platinum's Poké Radar. The Masuda method is even more appealing, since it allows players to customize their team further, with specific Egg moves and IVs that would be either unavailable or harder to obtain.