Palworld: A Case Study in Effective Product Management
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Chapter 1: The Phenomenon of Palworld
Palworld has rapidly become a sensation online, showcasing the power of product management in achieving impressive outcomes.
This game, often dubbed a "Pokémon clone" with firearms, has polarized opinions across the internet. While some criticize its design choices and lack of depth after the initial six hours, its remarkable achievement as the most-played title on Steam since its launch two weeks ago is undeniable. With a modest budget of approximately $6.8 million, a team of 40 has sold over 8 million copies, overshadowing the high-profile launches of late 2023, like Starfield and Modern Warfare III. Given its current early access status, further content updates are anticipated, suggesting a thriving user community is on the horizon.
However, the more intriguing narrative arises from a blog post by Takuro Mizobe, the CEO of Pocket Pair, the studio behind Palworld. This extensive 10,000-word article offers fascinating insights into the company's journey, but one quote stood out:
"If the response to the trailer had been negative, then the budget for the game wouldn't have been justified." With that perspective, they developed a trailer in just three months and showcased it at an event.
This approach reflects a solid Minimum Viable Product (MVP) strategy. Mizobe elaborates:
"We formed a compact team of about four members to expedite the creation process, allowing us to release quickly and gauge user feedback."
This sentiment raises the question: is he prioritizing a small team to mitigate risk and learn rather than solely aiming for profit? He checks all the essential boxes!
He also shares anecdotes from Palworld's development, including hiring a clerk without previous experience and how one of their most talented employees was initially rejected not only by them but by 100 other companies before being given a chance.
Yet, Mizobe downplays his contributions:
"I believe Palworld succeeded in creating a genuinely interesting game. I'm just lucky."
This isn't simply luck; it's a testament to strategic product management.
The first video explores the success of Palworld and questions whether it utilized assets from other games.
Chapter 2: The Product Management Approach
The second video is a detailed review of Palworld, analyzing whether it is worth players' time and investment.
Section 2.1: Understanding Product Management
To truly grasp the success of Palworld, one must distinguish between product management and project management. While the latter focuses on delivering projects within a defined time frame and budget, product management emphasizes creating the right product, regardless of constraints.
Mizobe discusses the disparities between games produced by large publishers and those developed by smaller teams. Large companies can often attach an established intellectual property to a lackluster game and still achieve modest success. In contrast, smaller teams must deliver high-quality, innovative experiences while navigating tighter budgets and resources.
Pocket Pair was not constrained by traditional budget controls typically found in larger firms. Their primary concern was existential risk, not merely adhering to time, budget, and scope constraints. They needed to get it right with their one opportunity.
This mindset is what positions Palworld as a success story in product management rather than project management. The development process was chaotic, inefficient, and heavily reliant on key individuals, taking longer than expected. Yet, despite these challenges, they produced a phenomenal hit.
Section 2.2: Risk Mitigation in Product Development
To create an exceptional product, a company must prioritize risk mitigation. I often refer to four critical product risks in my discussions, and they are essential to understanding product management:
- Does the user want it?
- Can the user utilize it?
- Can we build it?
- Will it be profitable?
When addressing these questions, a company can significantly enhance its chances for success. Palworld's development exemplified this approach. They crafted a trailer prior to game development to gauge user interest and built upon established genres with substantial player bases, such as survival, crafting, and collectible creature games. By drawing inspiration from titles like ARK, Rust, and Pokémon, they minimized innovation risks.
Despite uncertainties about development feasibility, they hired specialists, expanded their team, and even switched development engines mid-project. They chose to launch in early access on Steam, aware of the work ahead, but also recognizing the potential for revenue to support ongoing improvements.
These examples illustrate their commitment to risk mitigation, which was vital to their success.
Section 2.3: The Challenges of Successful Product Management
As Marty Cagan aptly states, "product is hard." Reflecting on Mizobe's insights reveals the challenges faced by small versus large developers. Larger organizations often get sidetracked by metrics that don't directly impact product quality, while smaller firms operate under the constant threat of failure.
For a product to genuinely excel, it requires a unique alignment of circumstances. Within larger organizations, products must navigate bureaucratic structures, while smaller firms face challenges such as limited resources, lack of specialized talent, and competition from well-established rivals.
What insights can we draw from this? The reality is that while stellar product management is not the sole ingredient for a successful product, it is crucial. Few companies achieve success without effective product management strategies.
Palworld stands as a prime example of the importance of product management—not because it guarantees success, but because it provides the best chance for a team facing overwhelming obstacles to thrive.
So, Takuro Mizobe, it's not luck. You're a visionary in product development.