"At the moment, we are exploring how to attract more players while still cherishing existing players." Palworld creator talks about potential for a free-to-play model

What you need to know

• In a recent interview with ASCII Japan, Palworld creator Takuro Mizobe mentioned that they are considering monetization models, including Palworld going free-to-play.
• Mizobe talks about Palworld as a live service game and how this is often hand-in-hand with the F2P model, but this being a challenge as Palworld has been released as a paid product.
• Mizobe also touched on the rumors around Palworld's use of AI, and confirmed while they don't use it in Palworld, the studio are using in it's aptly named 'AI Imposter' game.

Palworld took the gaming world by storm earlier this year, making crazy records for over 2 million concurrent users and becoming the biggest ever third-party launch on Xbox Game Pass . As the virality of the game has now calmed,
the game has still received regular updates including the Sakurajima Update introducing new Pals, a new island and Xbox dedicated servers to improve performance dramatically. Pocket Pair have even added PvP mode .

It seems the creators still face the challenge of how to monetize the game successfully going forward as the game comes out of Early Access, and many business models have been considered. In a recent interview with ASCII Japan CEO Takuro Mizobe discussed the prospect of making Palworld a free to play title.

"To be honest, it hasn't been decided yet "

Speaking to ASCII, Mizobe was asked about future developments for Palworld, specifically monetization. The interview is in Japanese, so be mindful that this is translated in part by Automaton :

“To be honest, things aren’t decided yet. When you think about it from a business perspective, making [Palworld] a live-service game would extend its lifespan and make it more stable in terms of profitability. However, the game was not initially designed with that approach in mind, so there would be many challenges involved in taking it down the live-service path.”

"And the most important thing is whether the players want it or not. As a prelude to a live game, it needs to be a F2P (free-to-play) game. It is common for managed games to make it a F2P game and then add paid elements such as skins and battle passes, but Palworld is a one-time purchase game, so it is difficult to turn it into a live game from the ground up. At the moment, we are exploring how to attract more players while still cherishing existing players. There are several successful examples of games that have shifted from pay-to-download games to F2P midway through. In that case, they often give guaranteed items or items worth the amount of money. "PUBG" and "Fall Guys" are successful examples, but both took several years to make the shift. While we understand that live games are good for business, it's not that simple."

"We also get opinions about ad monetization, but the basic premise is that ad monetization is difficult unless it's mobile. As far as I know, there are no examples of ad monetization working well for PC games. Even if the PC version were to work well, people who play on Steam hate ads. There are a lot of users who get angry when ads are inserted. So now we are carefully formulating a policy."

AI and Indie Games

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It's almost impossible to bring up Palworld in conversation and not get embroiled in a conversation about AI and it's use in games, at launch Palworld was plagued with rumors of it's use to create the Pals. This has since been debunked but Mizobe touched upon it again in this interview, and how they considered using it in Palworld but it just wasn't good enough. It is however being used in another of Pocket Pairs games, the aptly named 'Art Imposter'.

"This is often misunderstood, but Palworld does not use AI. We are currently developing AI Art Imposter as our third game, and while we are very interested in AI, we believe it's only now that we are starting to incorporate it into our workflow. AI Art Imposter is the first game in the world to utilize AI. At least on Steam, among games played by a significant number of people, we take pride in AI Art Imposter being the first innovative game that harnessed AI.

The open-sourcing of generative AI ' Stable Diffusion ' happened in August 2022. I thought, "This is amazing." While Midjourney was already around, I was deeply impressed by Stable Diffusion. Immediately, I decided to create a game using this AI, which led to the development of AI Art Imposter. We released it in November 2022, making it the fastest release, developed in just about two months.

Our company has always been highly sensitive to technology and naturally focuses on AI, always exploring ways to integrate it into our work. During the development of Palworld, we also experimented with using AI to generate creatures (Pals). However, we concluded that human creation was more accurate. While the quality of what AI generates on its own is high, getting it to produce exactly what we envisioned was incredibly difficult. So, in reality, we didn't use it. Looking ahead, I believe AI will be extremely useful for the gaming industry. Of course, there are many challenges, such as rules and legal issues that need to be addressed. However, AI is expected to dramatically improve workflows, and I think we'll soon reach a point where no one is not utilizing it. At the same time, I believe AI will become one of the factors leading to an increase in indie game creators.

Looking back, the spread of free game engines in the 2010s made it possible for individuals to create 3D games. The use of Unity and Unreal Engine led to a significant increase in the development of 3D games by individuals. The role of game engines was enormous.

I believe the same thing will happen with AI. By utilizing AI, the population of game developers will undoubtedly increase."

Balancing PC and Xbox experiences

In other Palworld news, a recent Twitch event rewarded players with skins for watching partner streams, and unfortunately, the event wasn't open to Xbox players. Pocket Pair has issued a statement on this over on X and is looking to release the skins to Xbox players in the near future.

Palworld is available for purchase on Xbox Series X , Xbox Series S , Xbox One, and PC via Windows or Steam. It is also currently available to download for free via Xbox Game Pass .