Alibaba, Tencent Spark Cloud Computing Showdown With Server Offers for ‘Palworld,’ a Hit Game Compared to ‘Pokémon With Guns – Alibaba Gr Holding (NYSE:BABA)

Alibaba Group Holding Limited BABA has quickly entered a cloud-computing race with Tencent Holdings Ltd TCEHY, spurred by the unexpected success of the video game “Palworld,” developed by Japanese studio Pocketpair. 

Released on January 19 on Steam, “Palworld” sold over 8 million copies in under six days, challenging Pocketpair with server overload issues due to the game’s massive popularity. 

This game allows players to catch and raise creatures known as Pals, build structures, and engage in battles, earning the nickname “Pokémon with guns” among its global fanbase, including China, SCMP reports.

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Facing the need for more server capacity, Pocketpair encouraged players to host the game on private servers, a move that Alibaba and Tencent leveraged by offering dedicated server plans for “Palworld” players in China.

Alibaba’s plans cater to groups of eight or 20 players, with monthly fees ranging from 26.5 yuan to 271.8 yuan, while Tencent similarly priced its packages. This situation underscores the ongoing competition between Alibaba and Tencent in China’s cloud computing market, where both have previously engaged in price wars to attract more users.

Despite Steam being inaccessible in mainland China, “Palworld” has found a significant audience there, with players accessing the game via virtual private networks and its availability on Microsoft Corp’s MSFT Xbox, demonstrating the extensive reach and impact of digital games in today’s tech-driven world.

Earlier this year, China’s gaming regulator removed proposed rules curbing video game spending from its website, triggering a rally in the gaming stocks.

The Chinese gaming regulator reversed its stance following a series of developments that dramatically affected the country’s gaming industry. Announced in December, the proposed rules triggered a market sell-off amounting to $80 billion, including a $54 billion loss in market value for Tencent alone.

Price Action: BABA shares closed lower by 0.21% at $72.30 premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Wikimedia Commons

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