As mobile game development continues to evolve, developers are faced with crucial decisions about their game's business model. One such example is Palworld, a phenomenally successful multiplayer survival crafting game that has captured the hearts of many players worldwide. But as the game's developer, Pocketpair, looks to the future, it must weigh the pros and cons of adopting a free-to-play (F2P) model with live service elements.

Palworld, often dubbed "Pokemon with guns" due to its inclusion of creatures called Pals, has been a sales powerhouse since its launch on Steam priced at $30. The game's massive popularity led to it breaking records for concurrent player numbers and sales figures. While the player base has declined slightly since its explosive launch, Palworld remains one of the most-played games on Steam, sitting comfortably in the top 100.

However, Pocketpair CEO Takuro Mizobe recognizes that the game's current pay-to-play (P2P) model may not be sustainable in the long run. In an interview with ASCII Japan, translated by Automaton, Mizobe acknowledged the need to make a decision between the two business models. "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," he said. However, this path is not without its challenges.

One major hurdle would be transitioning Palworld from a P2P game to an F2P model with paid elements such as skins and battle passes. "It's common for live-service games to be F2P with paid elements, but Palworld is a B2P game, so it's difficult to turn it into a live-service game from the ground up," Mizobe explained.

While there are examples of successful game developers who have made the switch from premium to free, such as Fall Guys and PUBG, doing so requires significant effort and risk. "Both games took several years to make the shift," Mizobe added. "While I understand that the live-service model is good for business, it's not that easy."

The decision has yet to be made, and Pocketpair is keenly aware of the potential backlash from players who have already paid $30 to play Palworld. However, it's worth noting that Palworld launched in early access form just over half a year ago, so it's still early days.

In related news, Pocketpair has announced plans to capitalize on Palworld's breakout success by forming a new business called Palworld Entertainment. This newly formed company, headed up by Mizobe himself, will be responsible for expanding the IP through non-video game products such as merchandise and music.

Rumors are also swirling that Palworld may be set for a PlayStation launch announcement at this month's Tokyo Game Show (TGS), which would come as little surprise given the game's popularity. TGS runs from September 26 to 29.

Despite its massive success, Palworld has also faced controversy, with some critics labeling it a "Pokemon rip-off." However, Pocketpair has denied these claims and emphasized that the game is an original creation.