He only appears in-game during the Welcome to Toon World event, where he can additionally be unlocked as a playable character. Like Yami Bakura and Yugi Muto, he can also be found outside the Gate during his event on occasion.
When the player engages in the "Welcome to Toon World" event for the first time, they will be greeted by Pegasus. He introduces himself, before explaining that he's hosting a special event meant to parallel the Duelist Kingdom tournament (which he describes as the greatest tournament ever) as thanks to Kaiba creating an entire world dedicated to playing Duel Monsters. He then informs the player that they must collect Star Chips to earn the right to challenge him, and if they win, they will receive "unimaginable riches"; if they lose, he claims they will receive "UNIMAGINABLE AGONY". Pegasus then claims he's joking, and says he won't seal the player's soul into a card if they lose, before appending that statement with a "maybe." He concludes his dialogue by then addressing all Duelists, prompting them to set off for Toon World, become the champion, and earn their glory.
Each time the player defeats Pegasus, Pegasus will congratulate the player for the excellent Duel and tells the player to come again when they have enough Star Chips. At this point, the player's earned Points from the Duel are then counted. However, if the player defeated Pegasus who had used a certain Deck (from Level 10 to 30) that he had not been defeated with yet, an additional dialogue will play after the Point calculation. In this scenario, he states since the player is so eager to win, he must prepare a Deck that will provide a worthy challenge to the player. (After this, the player receives a notification that Pegasus can now be challenged with his next higher-Level Deck.)
When the player defeats Pegasus (who is using their Level 40 Deck) for the first time, Pegasus will express disbelief at his loss, even when he had the Millennium Eye to aid him. He falls silent for a moment, before commending the player on their outstanding skills and then preparing their prize. He adds that he also has many other prizes - too many to carry at once - and prompts the player to keep Dueling him to earn them all.
After the player manages to achieve a minimum of 250000 Points in the "Welcome to Toon World" event, Pegasus will be incredulous at his loss - as the creator of Duel Monsters - to the player. He wonders if he's lost his touch, since it has apparently been years since his Dueling skills were tested. He concludes that this is the case, and so commits himself to "joining the fray" as a Duelist and competing. Pegasus then warns the player that he doubts they will stand a chance against his Millennium Eye, and claims that no Duelist can survive the unstoppable might of his "Relinquished". He welcomes the player to try, but hopes the player's moves won't bore him to sleep; he then concludes his dialogue in laughter. (After this, the player receives a notification that Maximillion Pegasus is now unlocked as a playable character.)
After the player manages to achieve a minimum of 1500000 Points in the "Welcome to Toon World" event, Pegasus will contemplate the fact that strategies in Duel World are constantly evolving. He then admits that even though he's a game designer, he has seen new moves and tactics he's never dreamed of, with the player being on the leading edge; he also admits that it was amazing for him to Duel the player. He concludes his dialogue by awarding the player with his final prize for the event: a glossy "Toon Masked Sorcerer" card.
If the player participated in the "Welcome to Toon World" event, then after the event ends, the next time the player enters Duel World (from exiting the Shop, from logging-in, from completing a Duel, etc.), they will encounter Pegasus. In a subsequent brief dialogue, Pegasus observes that the player is quite talented and that his own Deck never stood a chance. He then determines that he'll rethink his Deck, considering which cards to use next time, before telling the player to "stay tuned" and giving a brief laugh. (After this, the player receives a notification that Pegasus will no longer appear at the Gate.)
If your Life Points are 3000 or more, you can see the cards Set in your opponent's field.
Master of Rites
Can be used each time your Life Points decrease by 1800. In the Draw Phase, instead of doing a normal draw, draw a random Ritual-Monster or Ritual-Spell card.
It's a Toon World
Begin Duel with the Continuous Spell Toon World activated.
Can be used if your Life Points drop below 2000. In the Draw Phase, instead of doing a normal draw, a powerful card, from outside of your Deck, is added to your hand. This skill can only be used once per Duel.
Can be used if your Life Points decrease by 2000. In the Draw Phase, a card you draw is duplicated.
Whenever Maximillion Pegasus Summons "Relinquished", a cut-in frame of Pegasus will briefly appear, and he'll announce "Here's my monster that's quite the looker!" followed by "Relinquished!" If that player hasn't already Summoned "Relinquished" during that Duel, a cutscene of "Relinquished" being Summoned will play afterwards.
Whenever he activates that monster's effect, he announces "Relinquished's special ability activates!" followed by "Hypnotic Attraction!"
Whenever Pegasus Summons "Toon Summoned Skull", a cut-in frame of Pegasus's face will briefly appear, and he'll announce "Here's the protagonist of a dark new comic book I'm writing!" followed by "Toon Summoned Skull!"
Most of the time when he declares an attack with that monster, he announces "I attack with Toon Summoned Skull!" followed by "Lightning Strike!"
Whenever Pegasus Summons "Blue-Eyes Toon Dragon", a cut-in frame of Pegasus's face will briefly appear. And he'll announce "Here's a legendary monster in its most supreme form - and it's much more cuddly too!" followed by "Blue-Eyes Toon Dragon!"
Most of the time when he declares an attack with that monster, he announces "I attack you with Blue-Eyes Toon Dragon!" followed by "White Lightning!"
Whenever Pegasus Special Summons "Manga Ryu-Ran", a cut-in frame of Pegasus's face will briefly appear, and he'll announce "I Special Summon Manga Ryu-Ran!"
Whenever Pegasus Special Summons "Bickuribox", a cut-in frame of Pegasus's face will briefly appear, and he'll announce "I Special Summon Bickuribox!"
Whenever Pegasus Summons "Toon Cannon Soldier", he announces "Make way for Toon Cannon Soldier!"
Whenever Pegasus Summons "Toon Gemini Elf", he announces "Step right up, Toon Gemini Elf!"
Most of the time when he declares an attack with that monster, he announces "Toon Gemini Elf's attack will leave you in stitches!" followed by "Gemini Double Radiation!"