Viral ‘Pokémon with guns’ game Palworld sparks cloud service race between Alibaba, Tencent in China

A popular video game developed by a Japanese studio has set off an unexpected cloud-computing race between Tencent Holdings and Alibaba Group Holding, as the two Chinese tech giants rush to draw players to their respective servers.

Palworld, an open-world survival game developed by Pocketpair that lets players catch and raise creatures known as Pals to build structures and fight, has become a breakout hit since its release on game distribution platform Steam on January 19, selling more than 8 million copies in less than six days.

With Pocketpair struggling to accommodate the surge of gamers that has overwhelmed its servers, the Tokyo-based company has given players the option to host the game on private servers.

Chinese cloud service providers, including Tencent and Post owner Alibaba,…