diff --git a/CMakeLists.txt b/CMakeLists.txt
index 3c48e55..70e8aac 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -25,7 +25,7 @@ set(DUSK_TEMP_DIR "${DUSK_BUILD_DIR}/temp")
 set(DUSK_TOOLS_DIR "${DUSK_ROOT_DIR}/tools")
 set(DUSK_DATA_DIR "${DUSK_ROOT_DIR}/data")
 set(DUSK_ASSETS_DIR "${DUSK_ROOT_DIR}/assets")
-set(DUSK_BUILT_ASSETS_DIR "${DUSK_BUILD_DIR}/assets" CACHE INTERNAL ${DUSK_CACHE_TARGET})
+set(DUSK_BUILT_ASSETS_DIR "${DUSK_BUILD_DIR}/built_assets" CACHE INTERNAL ${DUSK_CACHE_TARGET})
 set(DUSK_GENERATED_HEADERS_DIR "${DUSK_BUILD_DIR}/generated")
 set(DUSK_TARGET_NAME "Dusk" CACHE INTERNAL ${DUSK_CACHE_TARGET})
 set(DUSK_BUILD_BINARY ${DUSK_BUILD_DIR}/Dusk CACHE INTERNAL ${DUSK_CACHE_TARGET})
diff --git a/assets/CMakeLists.txt b/assets/CMakeLists.txt
index 2cdb0ba..96118a1 100644
--- a/assets/CMakeLists.txt
+++ b/assets/CMakeLists.txt
@@ -3,4 +3,6 @@
 # This software is released under the MIT License.
 # https://opensource.org/licenses/MIT
 
-add_asset(entities.tsx)
\ No newline at end of file
+add_asset(test.palette.png)
+# add_asset(first.palette.png)
+# add_asset(entities.tsx)
\ No newline at end of file
diff --git a/assets/first.palette.png b/assets/first.palette.png
new file mode 100644
index 0000000..fc473aa
Binary files /dev/null and b/assets/first.palette.png differ
diff --git a/assets/test.palette.png b/assets/test.palette.png
new file mode 100644
index 0000000..aa512b7
Binary files /dev/null and b/assets/test.palette.png differ
diff --git a/src/CMakeLists.txt b/src/CMakeLists.txt
index f45e676..07ee834 100644
--- a/src/CMakeLists.txt
+++ b/src/CMakeLists.txt
@@ -10,6 +10,7 @@ target_link_libraries(${DUSK_TARGET_NAME}
   PUBLIC
     m
     cglm
+    zip
 )
 
 # Includes
diff --git a/src/asset/CMakeLists.txt b/src/asset/CMakeLists.txt
index afa05a7..364c0b2 100644
--- a/src/asset/CMakeLists.txt
+++ b/src/asset/CMakeLists.txt
@@ -8,4 +8,10 @@ target_sources(${DUSK_TARGET_NAME}
   PRIVATE
     asset.c
     assetsystem.c
+)
+
+# Compile definitions
+target_compile_definitions(${DUSK_TARGET_NAME}
+  PRIVATE
+    ASSET_TYPE=wad
 )
\ No newline at end of file
diff --git a/src/asset/asset.h b/src/asset/asset.h
index 0bf2138..9e82d59 100644
--- a/src/asset/asset.h
+++ b/src/asset/asset.h
@@ -7,11 +7,19 @@
 
 #pragma once
 #include "dusk.h"
+#include <zip.h>
+
+#define ASSET_FILENAME_MAX 256
 
 typedef struct asset_s {
   int32_t nothing;
+
+  const char_t *filename;
+  zip_file_t *fileHandle;
 } asset_t;
 
-void assetInit(void);
+void assetInit(
+  const char_t *filename,
+);
 
 void assetDispose(void);
\ No newline at end of file
diff --git a/src/asset/assetimage.h b/src/asset/assetpalette.h
similarity index 51%
rename from src/asset/assetimage.h
rename to src/asset/assetpalette.h
index 43ad2ef..88f0ddc 100644
--- a/src/asset/assetimage.h
+++ b/src/asset/assetpalette.h
@@ -7,8 +7,12 @@
 
 #pragma once
 #include "dusk.h"
+#include "display/color.h"
+
+#define ASSET_PALETTE_COLOR_COUNT_MAX 256
 
 typedef struct {
-  const int32_t width;
-  const int32_t height;
-} assetimage_t;
\ No newline at end of file
+  char_t header[3];
+  int32_t colorCount;
+  color4b_t colors[ASSET_PALETTE_COLOR_COUNT_MAX];
+} assetpalette_t;
\ No newline at end of file
diff --git a/src/asset/assetsystem.c b/src/asset/assetsystem.c
index 846823b..32900ae 100644
--- a/src/asset/assetsystem.c
+++ b/src/asset/assetsystem.c
@@ -7,14 +7,68 @@
 
 #include "assetsystem.h"
 #include "util/memory.h"
+#include "console/console.h"
+
+#define ASSET_SYSTEM_ASSET_FILE "dusk.dsk"
+
+const char_t ASSET_SYSTEM_SEARCH_PATHS[][FILENAME_MAX] = {
+  "%s/%s",
+  "./%s",
+  "../%s",
+  "../../%s",
+  "data/%s",
+  "../data/%s",
+};
+#define ASSET_SYSTEM_SEARCH_PATHS_COUNT (\
+  sizeof(ASSET_SYSTEM_SEARCH_PATHS) / FILENAME_MAX\
+)
 
 assetsystem_t ASSET_SYSTEM;
 
-void assetSystemInit(void) {
+errorret_t assetSystemInit(void) {
   memoryZero(&ASSET_SYSTEM, sizeof(assetsystem_t));
-  // threadInit(&ASSET_SYSTEM.thread, NULL);
+
+  // Open zip file
+  char_t searchPath[FILENAME_MAX];
+  consolevar_t *var = consoleVarGet("sys_path");
+  const char_t *sysPath = var ? var->value : ".";
+  for(int32_t i = 0; i < ASSET_SYSTEM_SEARCH_PATHS_COUNT; i++) {
+    sprintf(
+      searchPath,
+      ASSET_SYSTEM_SEARCH_PATHS[i],
+      sysPath,
+      ASSET_SYSTEM_ASSET_FILE
+    );
+
+    // Try open
+    ASSET_SYSTEM.zip = zip_open(searchPath, ZIP_RDONLY, NULL);
+    if(ASSET_SYSTEM.zip == NULL) continue;
+    consolePrint("Opened asset file: %s", searchPath);
+    break;
+  }
+  
+  // Did we open the asset?
+  if(ASSET_SYSTEM.zip == NULL) errorThrow("Failed to open asset file.");
+
+  // Get "test.palette.dpf" file.
+  zip_file_t *file = zip_fopen(ASSET_SYSTEM.zip, "test.palette.dpf", 0);
+  if(file == NULL) errorThrow("Failed to open test.palette.dpf in asset file.");
+
+  // Read it
+  char_t buffer[256];
+  zip_int64_t n = zip_fread(file, buffer, 256);
+  if(n < 0) {
+    zip_fclose(file);
+    errorThrow("Failed to read test.palette.dpf in asset file.");
+  }
+
+
+  errorOk();
 }
 
 void assetSystemDispose(void) {
-  // threadDispose(&ASSET_SYSTEM.thread);
+  if(ASSET_SYSTEM.zip != NULL) {
+    zip_close(ASSET_SYSTEM.zip);
+    ASSET_SYSTEM.zip = NULL;
+  }
 }
\ No newline at end of file
diff --git a/src/asset/assetsystem.h b/src/asset/assetsystem.h
index 14efe0e..aee3566 100644
--- a/src/asset/assetsystem.h
+++ b/src/asset/assetsystem.h
@@ -7,9 +7,16 @@
 
 #pragma once
 #include "asset.h"
+#include "error/error.h"
+
+#if ASSET_TYPE == wad
+#else
+  #error "Unsupported ASSET_TYPE"
+#endif
 
 typedef struct {
   int32_t nothing;
+  zip_t *zip;
 } assetsystem_t;
 
 extern assetsystem_t ASSET_SYSTEM;
@@ -17,7 +24,7 @@ extern assetsystem_t ASSET_SYSTEM;
 /**
  * Initializes the asset system.
  */
-void assetSystemInit(void);
+errorret_t assetSystemInit(void);
 
 /**
  * Disposes/cleans up the asset system.
diff --git a/src/asset/assettileset.h b/src/asset/assettileset.h
index fbdb261..8d51439 100644
--- a/src/asset/assettileset.h
+++ b/src/asset/assettileset.h
@@ -11,9 +11,10 @@
 typedef struct assetimage_s assetimage_t;
 
 typedef struct {
-  const int32_t tileWidth;
-  const int32_t tileHeight;
-  const int32_t tileCount;
-  const int32_t columns;
-  const assetimage_t *image;
+  char_t header[3];
+  int32_t tileWidth;
+  int32_t tileHeight;
+  int32_t tileCount;
+  int32_t columns;
+  char_t tilesetName[256];
 } assettileset_t;
\ No newline at end of file
diff --git a/src/console/CMakeLists.txt b/src/console/CMakeLists.txt
index 4a436a7..dbcfa14 100644
--- a/src/console/CMakeLists.txt
+++ b/src/console/CMakeLists.txt
@@ -18,6 +18,6 @@ add_subdirectory(cmd)
 if(DUSK_TARGET_SYSTEM STREQUAL "linux")
   target_compile_definitions(${DUSK_TARGET_NAME}
     PRIVATE
-      DUSK_CONSOLE_POSIX=1
+      CONSOLE_POSIX=1
   )
 endif()
\ No newline at end of file
diff --git a/src/console/console.c b/src/console/console.c
index 99576a9..d41deee 100644
--- a/src/console/console.c
+++ b/src/console/console.c
@@ -45,11 +45,32 @@ consolevar_t * consoleRegVar(
   const char_t *value,
   consolevarchanged_t event
 ) {
-  consolevar_t *var = &CONSOLE.variables[CONSOLE.variableCount++];
+  consolevar_t *var;
+
+  // Existing?
+  var = consoleVarGet(name);
+  if(var != NULL) return var;
+
+  assertTrue(
+    CONSOLE.variableCount < CONSOLE_VARIABLES_MAX,
+    "Too many console variables registered."
+  );
+
+  // Create
+  var = &CONSOLE.variables[CONSOLE.variableCount++];
   consoleVarInitListener(var, name, value, event);
   return var;
 }
 
+consolevar_t * consoleVarGet(const char_t *name) {
+  assertNotNull(name, "name must not be NULL");
+  for(uint32_t i = 0; i < CONSOLE.variableCount; i++) {
+    consolevar_t *var = &CONSOLE.variables[i];
+    if(stringCompare(var->name, name) == 0) return var;
+  }
+  return NULL;
+}
+
 void consolePrint(const char_t *message, ...) {
   char_t buffer[CONSOLE_LINE_MAX];
 
diff --git a/src/console/console.h b/src/console/console.h
index 2653ecd..64d9462 100644
--- a/src/console/console.h
+++ b/src/console/console.h
@@ -85,6 +85,14 @@ consolevar_t * consoleRegVar(
   consolevarchanged_t event
 );
 
+/**
+ * Gets a console variable by name.
+ * 
+ * @param name The name of the variable.
+ * @return The variable, or NULL if not found.
+ */
+consolevar_t * consoleVarGet(const char_t *name);
+
 /**
  * Sets the value of a console variable.
  * 
diff --git a/src/engine/engine.c b/src/engine/engine.c
index 915c67a..887857c 100644
--- a/src/engine/engine.c
+++ b/src/engine/engine.c
@@ -26,7 +26,7 @@ errorret_t engineInit(void) {
   timeInit();
   consoleInit();
   ecsSystemInit();
-  assetSystemInit();
+  errorChain(assetSystemInit());
   errorChain(displayInit());
 
   sceneTestAdd();
diff --git a/src/error/error.h b/src/error/error.h
index c83c7df..65c202d 100644
--- a/src/error/error.h
+++ b/src/error/error.h
@@ -115,7 +115,7 @@ errorret_t errorPrint(const errorret_t retval);
 #define errorThrow(message, ...) \
   return errorThrowImpl(\
     &ERROR_STATE, ERROR_NOT_OK, __FILE__, __func__, __LINE__, (message), \
-    __VA_ARGS__ \
+    ##__VA_ARGS__ \
   )
 
 /**
diff --git a/src/main.c b/src/main.c
index e710323..0aa8028 100644
--- a/src/main.c
+++ b/src/main.c
@@ -6,6 +6,7 @@
  */
 
 #include "engine/engine.h"
+#include "console/console.h"
 
 // PSP_MODULE_INFO("Dusk", 0, 1, 0);
 // PSP_MAIN_THREAD_ATTR(PSP_THREAD_ATTR_USER | THREAD_ATTR_VFPU);
@@ -14,6 +15,9 @@ int main(int argc, char **argv) {
   errorret_t ret;
   ret = engineInit();
 
+  // Set console variable
+  if(argc > 0) consoleRegVar("sys_path", argv[0], NULL);
+
   if(ret.code != ERROR_OK) {
     errorCatch(errorPrint(ret));
     return ret.code;
diff --git a/tools/assetstool/assethelpers.py b/tools/assetstool/assethelpers.py
index a9060c3..8ae56c9 100644
--- a/tools/assetstool/assethelpers.py
+++ b/tools/assetstool/assethelpers.py
@@ -4,3 +4,7 @@ from args import args
 def getAssetRelativePath(fullPath):
   # Get the relative path to the asset
   return os.path.relpath(fullPath, start=args.assets).replace('\\', '/')
+
+def getBuiltAssetsRelativePath(fullPath):
+  # Get the relative path to the built asset
+  return os.path.relpath(fullPath, start=args.output_assets).replace('\\', '/')
\ No newline at end of file
diff --git a/tools/assetstool/assets.py b/tools/assetstool/assets.py
index 95ba826..f1fc386 100644
--- a/tools/assetstool/assets.py
+++ b/tools/assetstool/assets.py
@@ -1,6 +1,8 @@
 import sys, os
-from args import inputAssets
+from args import inputAssets, args
 from processasset import processAsset
+from assethelpers import getBuiltAssetsRelativePath
+import zipfile
 
 # Setup headers directory.
 # setOutputDir(args.output)
@@ -10,5 +12,29 @@ from processasset import processAsset
 # if not os.path.exists(args.output):
 #   os.makedirs(args.output)
 
+files = []
+
 for asset in inputAssets:
-  processAsset(asset)
\ No newline at end of file
+  asset = processAsset(asset)
+  files.extend(asset['files'])
+
+# Take assets and add to a zip archive.
+outputFileName = args.output_file
+print(f"Creating output file: {outputFileName}")
+with zipfile.ZipFile(outputFileName, 'w') as zipf:
+  for file in files:
+    relativeOutputPath = getBuiltAssetsRelativePath(file)
+    zipf.write(file, arcname=relativeOutputPath)
+
+# Finalize build
+if args.build_type == 'header':
+  print("Error: Header build not implemented yet.")
+  sys.exit(1)
+
+elif args.build_type == 'wad':
+  # Nothing to do, already created above!
+  pass
+
+else:
+  print("Error: Unknown build type.")
+  sys.exit(1)
\ No newline at end of file
diff --git a/tools/assetstool/constants.py b/tools/assetstool/constants.py
new file mode 100644
index 0000000..4537adb
--- /dev/null
+++ b/tools/assetstool/constants.py
@@ -0,0 +1 @@
+ASSET_FILE_NAME_MAX_LENGTH = 256
\ No newline at end of file
diff --git a/tools/assetstool/processasset.py b/tools/assetstool/processasset.py
index eb53bc6..032e8e0 100644
--- a/tools/assetstool/processasset.py
+++ b/tools/assetstool/processasset.py
@@ -1,4 +1,5 @@
 from processtileset import processTileset
+from processimage import processPalette, processImage
 
 processedAssets = []
 
@@ -10,5 +11,9 @@ def processAsset(assetPath):
 
   # Handle tiled tilesets
   if assetPath.endswith('.tsx'):
-    processTileset(assetPath)
-    return
\ No newline at end of file
+    return processTileset(assetPath)
+  elif assetPath.endswith('.png'):
+    if assetPath.endswith('.palette.png'):
+      return processPalette(assetPath)
+    else:
+      return processImage(assetPath)
\ No newline at end of file
diff --git a/tools/assetstool/processimage.py b/tools/assetstool/processimage.py
new file mode 100644
index 0000000..5a3fbfa
--- /dev/null
+++ b/tools/assetstool/processimage.py
@@ -0,0 +1,64 @@
+import os
+from args import args
+from PIL import Image
+
+def extractPaletteFromImage(image):
+  # goes through and finds all unique colors in the image
+  if image.mode != 'RGBA':
+    image = image.convert('RGBA')
+  pixels = list(image.getdata())
+  uniqueColors = []
+  for color in pixels:
+    if color not in uniqueColors:
+      uniqueColors.append(color)
+  return uniqueColors
+
+def savePalette(pixels, outputFilePath):
+  # Pixels is a list of (R, G, B, A) tuples
+  data = "DPF"  # Header for Dusk Palette Format
+
+  # Count of colors (int32_t)
+  colorCount = len(pixels)
+  data += colorCount.to_bytes(4, byteorder='little').decode('latin1')
+
+  for r, g, b, a in pixels:
+    data += bytes([r, g, b, a]).decode('latin1')
+
+  os.makedirs(os.path.dirname(outputFilePath), exist_ok=True)
+  with open(outputFilePath, 'wb') as f:
+    f.write(data.encode('latin1'))
+
+def processPalette(assetPath):
+  # Process the image file
+  print(f"Processing palette: {assetPath}")
+
+  # Load the image
+  image = Image.open(assetPath)
+  pixels = extractPaletteFromImage(image)
+
+  # Save the processed image to the output directory
+  fileNameWithoutExt = os.path.splitext(os.path.basename(assetPath))[0]
+  outputFilePath = os.path.join(args.output_assets, f"{fileNameWithoutExt}.dpf")
+  os.makedirs(os.path.dirname(outputFilePath), exist_ok=True)
+  savePalette(pixels, outputFilePath)
+
+  outputRelative = os.path.relpath(outputFilePath, args.output_assets)
+
+  return {
+    "outputFile": outputRelative,
+    "paletteColors": len(pixels),
+    "files": [ outputFilePath ]
+  }
+
+def processImage(assetPath):
+  print(f"Processing image: {assetPath}")
+  
+  # Load the image
+  image = Image.open(assetPath)
+  pixels = extractPaletteFromImage(image)
+
+  return {
+    # "outputFile": os.path.relpath(assetPath, args.input_assets),
+    # "paletteColors": len(pixels),
+    "files": [ assetPath ]
+  }
\ No newline at end of file
diff --git a/tools/assetstool/processtileset.py b/tools/assetstool/processtileset.py
index baad0ea..2e5db01 100644
--- a/tools/assetstool/processtileset.py
+++ b/tools/assetstool/processtileset.py
@@ -1,6 +1,9 @@
 import sys, os
 import xml.etree.ElementTree as ET
 from assethelpers import getAssetRelativePath
+from args import args
+from constants import ASSET_FILE_NAME_MAX_LENGTH
+from processimage import processPalette, processImage
 
 def processTileset(assetPath):
   # Process the tileset file
@@ -25,18 +28,58 @@ def processTileset(assetPath):
     return
 
   # Exactly one image element is required
-  images = root.findall('image')
-  if len(images) != 1:
+  imagesNode = root.findall('image')
+  if len(imagesNode) != 1:
     print(f"Error: Tileset {assetPath} must have exactly one image element.")
     return
 
-  image = images[0]
-  if 'source' not in image.attrib:
+  imageNode = imagesNode[0]
+  if 'source' not in imageNode.attrib:
     print(f"Error: Tileset {assetPath} is missing image source.")
     return
-  
-  imageSource = image.attrib['source']
+
+  imageSource = imageNode.attrib['source']
+
+  directory = os.path.dirname(assetPath)
+  image = processImage(os.path.join(directory, imageSource))
 
   # Build 
-  relative = getAssetRelativePath(assetPath)
-  print(f"Relative path: {relative}")
\ No newline at end of file
+  relativeFile = getAssetRelativePath(assetPath)
+  relativeDir = os.path.dirname(relativeFile)
+
+  data = "DTF"  # Header for Dusk Tileset Format
+  # Write width (int32_t)
+  data += tilewidth.to_bytes(4, byteorder='little').decode('latin1')
+  # Write height (int32_t)
+  data += tileheight.to_bytes(4, byteorder='little').decode('latin1')
+  # Write tilecount (int32_t)
+  data += tilecount.to_bytes(4, byteorder='little').decode('latin1')
+  # Write column count (int32_t)
+  data += columns.to_bytes(4, byteorder='little').decode('latin1')
+  # Write row count (int32_t)
+  rows = (tilecount + columns - 1) // columns
+  data += rows.to_bytes(4, byteorder='little').decode('latin1')
+
+  # Write image source file name, padd to ASSET_FILE_NAME_MAX_LENGTH
+  imageSourceBytes = image["outputFile"].encode('utf-8')
+  data += len(imageSourceBytes).to_bytes(4, byteorder='little').decode('latin1')
+  data += imageSourceBytes.decode('latin1')
+  paddingLength = max(0, ASSET_FILE_NAME_MAX_LENGTH - len(imageSourceBytes))
+  data += '\x00' * paddingLength
+
+  # Write to output file
+  fileNameWithoutExt = os.path.splitext(os.path.basename(assetPath))[0]
+  outputFilePath = os.path.join(args.output_assets, relativeDir, f"{fileNameWithoutExt}.dtf")
+  os.makedirs(os.path.dirname(outputFilePath), exist_ok=True)
+  with open(outputFilePath, 'wb') as f:
+    f.write(data.encode('latin1'))
+
+  return {
+    "outputFile": os.path.relpath(outputFilePath, args.output_assets),
+    "tileWidth": tilewidth,
+    "tileHeight": tileheight,
+    "tileCount": tilecount,
+    "columns": columns,
+    "rows": rows,
+    "image": image
+  }
\ No newline at end of file