Tencent Holdings Ltd.’s premier creative studios, Timi and Lightspeed, are embarking on the development of mobile games inspired by this year’s breakout success, Palworld, with the aim of revitalizing the company’s core business.
According to insiders, teams at Timi and Lightspeed are independently working on games reminiscent of Palworld, blending genres with pet companions and stylized action. This strategic shift comes as Tencent seeks another hit akin to Honor of Kings, capable of propelling its future growth trajectory.
While Tencent anticipates the launch of Nexon Co.’s Dungeon & Fighter Mobile in China to stimulate near-term growth, the company recognizes the greater profitability potential of in-house hits over external adaptations. This approach could invigorate Tencent’s gaming business, which experienced a 2% revenue decline in the holiday quarter.
Facing competitive pressures in its cloud business and stagnation in software offerings domestically, Tencent is in dire need of a blockbuster game. NetEase Inc.’s Eggy Party has already captured a significant market share in the emerging party games genre.
To accelerate recovery, Tencent is fostering internal competition with multiple projects, aiming to cultivate the most promising outcomes. Notably, past successes like Honor of Kings and Peacekeeper Elite emerged from fierce internal competition.
Palworld, an indie PC game, achieved unprecedented success upon its January release, attracting over 2 million simultaneous players.
Despite requests for comment, Tencent spokespeople remained silent on the matter.
The forthcoming games blend elements of open-world exploration, survival, and crafting with virtual pet nurturing, mirroring Palworld’s winning formula, dubbed “Pokémon with guns,” by enthusiasts. Tencent is also bolstering its talent pool, acquiring assets from ByteDance Ltd.’s gaming division.
Lightspeed has redirected developers from existing projects, such as the underperforming High Energy Heroes, to its Palworld-inspired venture. Meanwhile, Timi, renowned for Call of Duty Mobile, is actively recruiting talent, including Unreal Engine programmers and 3D artists, for its fantasy adventure project featuring adorable pets.
The Palworld phenomenon has caught the attention of industry peers, with NetEase incorporating a pet system into its upcoming survival game, Seven Days World, as seen in recent trailers. The similarities between these games and Palworld have not escaped the notice of avid gamers.
