Tencent Holdings ADR (OTC:TCEHY) is drawing inspiration from the breakout success of Palworld to rejuvenate its core business.

According to Bloomberg, the company's leading studios, Timi and Lightspeed, are independently developing mobile games that blend open-world exploration with the novelty of pet companionship and action elements, akin to the viral hit.

This strategy reflects Tencent's broader aim to cultivate in-house hits that can spur growth and offset recent challenges, including a 2% dip in gaming revenue and increased competition in its cloud services and software offerings.

The focus on games similar to Palworld, known for its engaging mix of "Pokémon with guns" gameplay, highlights Tencent's pursuit of quick, impactful projects supported by its significant resources.

This approach not only aims to capture the attention of a global gaming audience but also to leverage the potential for rapid development and monetization.

Additionally, Tencent is enhancing its talent pool and shifting resources to support these new projects.

Lightspeed moved developers from existing games like High Energy Heroes into its Palworld-like project, Bloomberg noted.

Timi, maker of Call of Duty Mobile, is hiring Unreal Engine programmers, 3D artists and combat designers for its project, the report noted, citing a job post for a "fantasy adventure world with cute pets."

Palworld, an independent PC title, was created by a small studio operating with restricted resources. Despite its modest beginnings, the game skyrocketed to become the most downloaded new title globally upon its January release.

Image created using photos from Shutterstock and Steam.