Palworld reveals enormous dedicated server costs — $6 million annual fees could bankrupt the studio, CEO quips and it will go higher

The CEO of Pocketpair, the studio behind hit game Palworld, has revealed that the cost of running the gaming company’s servers is becoming a major concern for the company amid soaring costs.

Pocketpair is behind many popular games, including Palworld, Craftopia, and Overdungeon, which are available on Steam, a popular video game distribution service and storefront.

In a post to X, Takuro Mizobe posted a screenshot showing a considerable 359% increase in costs, with the caption: “Wait, maybe they’ll go bankrupt due to server fees?”

Will server running costs mean games cost more?

The screenshot shows the running cost of the company’s servers: 70 million yen, or around $475,000. That’s the bill that the company expects to rack up in February alone.

In response to the CEO’s concern, many users commented that they would be willing to pay in-game donations to keep the games running. Others suggested payable add-ons to support the high costs of keeping servers running.

Another individual commented that large companies can “get through it as long as [they] have cash,” signalling that smaller developers and startups would likely face more existential threats.

Despite facing initial challenges in coping with an unexpectedly successful launch, Pocketpair has received fewer complaints about server issues recently, which could be attributed to more investment in maintenance costs.

Palworld, which was released fewer than three weeks ago, has already amassed a staggering 19 million players across Steam and Xbox combined. Steam sales alone have driven a revenue of more than $200 million since its launch.

Looking ahead, Palworld network engineer Chujo Hiroto said: “Following the order to never let the service go down no matter what, we have prepared servers without regard to cost.”

However, the stark reality that keeping game servers online is costing developers millions begs the question of whether gamers and consumers are set for price hikes across the industry, and wider, in the coming months.

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