There are few stories in recent gaming history quite as dramatic as that of Palworld. In January 2024, a small Japanese indie developer named Pocketpair released a game that the internet immediately dubbed “Pokemon with guns,” and the world, it turned out, was very ready for exactly that.
An Overnight Phenomenon
Palworld launched on January 19, 2024, and within days it had become one of the most-played games in Steam history. At its peak on January 27, over 2.1 million players were logged in simultaneously, making it the second most-played game in Steam’s history, trailing only PUBG. It sold 8 million copies in six days and amassed 25 million players in its first month. These aren’t indie game numbers. These are the kind of figures that make major studios rethink their release strategies.
The appeal was easy to understand. Palworld blended creature-collecting mechanics familiar to anyone who grew up with Pokémon with open-world survival, crafting, base building, and third-person shooter combat. Players could capture cute monsters called Pals and put them to work in factories, breed them, or take them into battle. The game was simultaneously charming and irreverent, wrapping its violence in a pastel aesthetic that felt like a deliberate provocation aimed at Nintendo’s more sanitised franchise.
The timing was also perfect. Palworld arrived during a period of widely expressed dissatisfaction with the direction of official Pokémon games, particularly after the technically troubled launch of Pokémon Scarlet and Violet. Players were primed to embrace an alternative.
The Inevitable Decline
What goes up that fast tends to come down just as dramatically, and Palworld was no exception. Within a month of launch, daily concurrent player counts had already dropped from 2.1 million to around 440,000. By June 2024, the game was peaking at roughly 30,000 concurrent players on Steam, a decline of over 98 percent from its record high.
Pocketpair’s community manager, Bucky, pushed back on what he called lazy discourse around the numbers. The studio pointed out that Palworld was still in early access, that it had a limited content ceiling, and that players bouncing between games was simply normal behaviour in a crowded gaming market. “If you are still playing Palworld, we love you. If you’re no longer playing Palworld, we still love you, and we hope you’ll come back for round 2 when you’re ready,” Bucky wrote on social media, a genuinely warm response that earned the studio goodwill even as headlines were framing the drop as a catastrophe.
The reality was more nuanced. Palworld’s player count did stabilise. Regular updates including the substantial Sakurajima patch brought players back in waves. By early 2025, the game was still pulling six-figure peaks during update windows, and it received four nominations in Steam’s Best of 2025 Awards. The game was not dead, but it had clearly passed the cultural moment that made it unavoidable.
Nintendo Enters the Chat
The more consequential blow to Palworld’s momentum came from an unexpected direction: the courtroom. In September 2024, Nintendo and The Pokémon Company filed a patent infringement lawsuit against Pocketpair in Tokyo District Court, claiming that Palworld’s mechanics infringed three Japanese patents related to creature capture and character-riding systems. The suit sought approximately 10 million yen in damages, roughly $66,000 Australian dollars, a figure so modest it underscored that this was about precedent and intimidation as much as money.
The patents Nintendo was asserting were themselves controversial. They had been filed as divisionals from original applications dated December 2021 and only granted after Palworld was already a cultural phenomenon. Legal analysts noted the unusual optics of a company filing patent applications that appeared optimised specifically for litigation against an existing product.
The case forced Pocketpair into a defensive crouch. In November 2024, the studio released a patch that changed how players summon Pals, removing the throwing mechanic that echoed Pokeballs. In early 2025, they modified gliding mechanics that had been the subject of another contested patent. Pocketpair publicly described these changes as disappointing but necessary, an acknowledgment that even fighting a lawsuit has real costs to creative vision.
The litigation is still ongoing as of early 2026. However, the legal tide appears to be turning in Pocketpair’s favour. Japan’s Patent Office rejected a key Nintendo patent application in October 2025, citing a lack of originality and pointing to prior art across multiple games including ARK: Survival Evolved, Monster Hunter, and even Pokémon Go itself. Then in November 2025, the US Patent and Trademark Office director personally initiated a rare re-examination of one of Nintendo’s newly granted American patents, the first director-initiated review of its kind in over a decade. No trial date in the Tokyo case has been set, and proceedings are expected to extend well into 2026.
So Is Palworld Dead?
The short answer is no, but it is living a quieter life than the supernova of early 2024 might have suggested. The game has an estimated 13 million total players, maintains a dedicated community, and Pocketpair continues to develop new content. It is not, by any definition, a failure. The studio made enough money in its first weeks to operate indefinitely, and CEO Takuro Mizobe has spoken openly about wanting to remain indie and avoid growing too fast.
What Palworld represents is something more interesting than a simple rise-and-fall story. It is a case study in the mechanics of gaming virality in the streaming era, where Twitch and YouTube can funnel millions of players to a title in a matter of days but cannot sustain that interest once content is exhausted. It is also a genuinely fascinating moment in gaming IP law, raising legitimate questions about whether gameplay mechanics should be patentable at all, and whether incumbents with large patent portfolios can effectively use litigation to suppress competition rather than protect genuine innovation.
Pocketpair built something people genuinely wanted to play. The legal battle it triggered may ultimately matter more to the industry than the game itself does, depending on how the Tokyo courts eventually rule on whether you can patent the act of throwing a ball at a creature.
That is a pretty remarkable legacy for a mid-budget indie game featuring a Pikachu lookalike operating a sweatshop.
