The Modular Multilevel Converter (MMC) is a promising converter for medium-/high voltage applications due to its various features. The waveform quality could be enhanced further by expanding the number of generated voltage levels, which increases the number of submodules (SMs); however, this improvement enlarges the size and cost of the converter, posing a persistent challenge. Hence, there exists a trade-off between power quality and the size and complexity of the converter. To verify the performance of such a complex converter and to validate the effectiveness of the control system, especially in the absence of a physical system, Real-Time (RT) simulation becomes crucial. However, the large number of components of a MMC creates important numerical challenges and computational difficulties in RT simulation. This paper proposes a grid-connected MMC employing a Z Packed U-Cell converter as a SM to generate a higher number of voltage levels while minimizing the required number of SMs. The ZPUC-MMC is implemented on an FPGA-based RT simulation platform using Electric Hardware Solver to reduce computational burden and simulation time, while improving the accuracy of the obtained results. Conventional controllers of MMCs are applied to assess the effectiveness and robustness of the proposed system during steady-state and dynamic operations.