On May 18, the Pudgy Penguins NFT Twitter handle tweeted out a video announcing the release of Pudgy Toys, its physical line of family-friendly plushie and figurine toys. The video also unveiled Pudgy World, an online portal that provides non-Web3 native consumers their first blockchain wallet and soulbound and tradeable NFTs.
The video, which depicts a child playing in her bedroom with the NFT-inspired toys in an homage to the Toy Story franchise, marked a special moment in the project’s history and the first community-licensed mass-market product line from a Web3 brand.
“This will be the first time that NFTs and blockchain technology are introduced to the everyday consumer, in a seamless, non-intimidating way,” wrote the team in the tweet announcing the release.
Pudgy Penguins IRL
Those who purchase a Pudgy toy will receive a birth certificate that unlocks a trait box from season one of Pudgy World, an ecosystem that the Pudgy team describes as a “social immersive experience” where users can connect and communicate with fellow holders worldwide. Each box contains four to six “common” to “epic” traits that can be traded, sold, or used to equip their Forever Pudgy Penguin.
This allows consumers to customize their own unique NFT “without them knowing,” according to the tweet announcing the release. Once they are satisfied with their Forever Pudgy Penguin, they will mint it on the blockchain as a dynamic NFT whose traits can be changed and further customized at any time.
Part of Pudgy’s longstanding brand strategy has been to present a welcoming face to non-Web3 natives. With nearly 530,000 followers, Pudgy Penguins has a remarkably strong presence on Instagram. The account provides feel-good content based in the Pudgy aesthetic, and followers will find zero mention of the words “NFT” or “blockchain.” Much like the approach that brands like Candy Digital and Reddit have taken in the past year, a significant portion of Pudgy Penguins’ marketing strategy has been to downplay the technology behind its brand.
That tactic appears to be paying off for the company. According to Pudgy Penguins CEO Luca Schnetzler, they’ve sold nearly $500,000 of toys on Amazon, totaling over 20,000 individual toys, with an average order value of around $130.
“If the momentum on my Amazon seller dashboard continues as follows, it will be one of the most successful debuts of a product that I’ve ever been a part of,” Schnetzler said on a Twitter space detailing the release. “Over the last 48 hours, we’re just under half a million dollars in toys. We just launched pretty recently; I don’t think that’s too shabby.”
While the team has yet to release specifics, Pudgy Penguins toys will soon be hitting the shelves of “some of the most prominent retail and specialty stores in the world.”
Using IP to build sustainable NFT empires
Pudgy Penguins leadership has hinted at its IRL merchandise plans for some time now, teasing the toys in the run-up to the holiday season in 2022. While speaking to nft now last November, Schnetzler described how the team has a focused vision for the PFP space that heavily involves the retail market.
By changing the usage contract for the NFTs under the Pudgy banner, holders could take part in unique contracts Pudgy leadership had negotiated that focused on family-friendly IRL products. Aside from plushies and figurines, the team is also looking to produce children’s books. Furthermore, Pudgy holders can monetize their NFT individually, but if their commercial earnings exceed $500,000 in annual revenue, those holders are expected to work with the Pudgy team and enter into a licensing agreement.
Such IP leveraging is only becoming more commonplace in Web3, especially as teams and NFT holders alike increasingly ponder the utility and purpose of owning a non-fine art NFT. The team behind the Goblintown NFT project, Truth Labs, likewise announced this week that it had negotiated two unique contracts with members of The 187 collection that will allow holders to earn a portion of royalties and brand-based merch revenue.
The strategy could be a lifesaver for an industry facing some significant challenges in terms of sales volume, overall activity, and enthusiasm for the NFT space. While more time is needed to see how the retail market will ultimately respond to such products and whether or not they will prove effective in onboarding the crypto-skeptic, Pudgy Penguins have made an encouraging splash so far.