Testing using the co-simulation method of an algorithm is important to visualize the hardware performance of the algorithm. This study aims to introduce a method for comparing the hardware performance of two different algorithms with a focus on the existing compression system for capsule endoscopy as a case study. The size limitation of capsule endoscopy which constrains the power source and the complexity of the hardware utilization are the main reasons for selecting the capsule endoscopy compression system for this case study. Undertaking a comparison between different algorithms from the existing image compression algorithms in capsule endoscopy can highlight the main testing steps of the co-simulation testing method. To allow a fair comparison, the hardware co-simulation is implemented using the same FPGA device for the methods compared in this study and the results acquired are discussed.