Viral ‘Pokémon with guns’ game Palworld sparks cloud service race between Alibaba, Tencent in China

A popular video game developed by a Japanese studio has set off an unexpected cloud-computing race between Tencent Holdings and Alibaba Group Holding, as the two Chinese tech giants rush to draw players to their respective servers.

Palworld, an open-world survival game developed by Pocketpair that lets players catch and raise creatures known as Pals to build structures and fight, has become a breakout hit since its release on game distribution platform Steam on January 19, selling more than 8 million copies in less than six days.

With Pocketpair struggling to accommodate the surge of gamers that has overwhelmed its servers, the Tokyo-based company has given players the option to host the game on private servers.

Chinese cloud service providers, including Tencent and Post owner Alibaba, have seized on the opportunity to promote their server packages to mainland gamers.

Alibaba is offering dedicated server plans for groups of eight or 20 Palworld players, with monthly fees ranging from 26.5 yuan to 271.8 yuan (US$3.71 to US$38.06). Tencent has also introduced similar packages, priced between 26 yuan and 580 yuan per month.

“In view of the popularity of Palworld … which led to problems on the official servers, setting up private servers is the most stable and comfortable solution for those who are financially well-off,” read a post on Tencent Cloud’s official WeChat account published on January 25.

Alibaba and Tencent have repeatedly engaged in price wars in China’s competitive cloud computing market.

Alibaba Cloud announced last April that it was cutting the prices of its core products and services in China by 15 to 50 per cent. Tencent followed suit soon after, pledging to slash the costs of some of its cloud servers by as much as 40 per cent.

Alibaba and Tencent are capitalising on the popularity of Palworld, which is currently the most-played game on Steam despite its hefty price tag of US$29.99. The average price for games sold on Steam, the world’s largest digital distribution platform for computer games, is US$15.50.

Players are mostly impressed by the game’s clever mash-up of elements, including the thrill of monster-catching and the cute animated designs of those creatures, according to Zhang Shule, a game analyst at CBJ Think Tank.

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However, the game – known among players as “Pokémon with guns” – has also run into controversy. The Pokémon Company said last week that it planned to investigate claims that Palworld infringed on the intellectual property rights of its iconic franchise.

“We have received libellous comments about our artists and some tweets that seem close to death threats,” Pocketpair CEO Takuro Mizobe wrote last week on X, known formerly as Twitter.

While Steam’s global platform is inaccessible in mainland China, Palworld has caught on in the country, where players are known to buy and play games on Steam through virtual private networks.

Palworld is also available on Microsoft’s Xbox.