I don't think it's required. I found it between levels 2 and 3 I think. Every ten levels you get a card for one of the pixl's. I'm not sure if you get anything better at the end. It's a pain in the ass, and I basically wasted two hours playing it because it goes back to your save point when you die.

I think it's worth waiting until you get at least Bowser before you attempt it.