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Blue-chip NFT peripheral products enter retail channels
Pudgy Penguins targets the infant doll market, providing collectors with licensing opportunities
Bored Ape canned water “APE Water” enters convenience stores
Pudgy Penguin NFT holders profit from physical product sales
Early founders exit, new founders are legendary teenage entrepreneurs
Strong challenges in entering physical channels
The NFT market has experienced ups and downs and constant fluctuations in the past three years, with the majority of teams exiting under accusations of being rug-pulled and scamming users. The authorization and development of peripheral products based on NFT avatars was once a hot topic. Currently, there are only two projects, Pudgy Penquins and Ape Water, that have successfully produced and listed their products in mainstream retail physical channels. The former has successfully entered the children and teenagers toy market, while the latter has placed mineral water on the shelves of convenience stores.
Pudgy Penquins is considered an outlier in the NFT industry. While bored apes and other blue-chip NFT holders have been earning money through staking, Pudgy Penquins has shifted the market focus to physical retail. Translated into Chinese, Pudgy Penquins means “fat penguins,” which is a highly attractive toy for children among the numerous avatar NFTs. The chubby and cute appearance of the penguins, combined with simple lines and casual clothing, is very soothing and loved by both adults and children.
Pudgy Penguins plush toys with penguin designs have been gradually stocked in Walmart, the largest retail giant in the United States. Walmart has a market value of 542 billion US dollars, second only to the e-commerce leader Amazon’s 1.9 trillion US dollars. Pudgy Penquins announced last month that it will also be available in another American department store, Target (NYSE: TGT). Target has a market value of 67 billion US dollars, ranking eleventh among all retail channels in the United States. The main customers of Pudgy Penguins are teenagers aged 16 to 24, both male and female.
PMI Children’s World, a toy manufacturer specializing in collaborations with gaming brands, has developed the second series of Pudgy Penquins products, which are now available at Walmart and Target. Target recently stocked six different designs of Pudgy Toys. The designs of these penguins are authorized by NFT avatar holders. Each Pudgy Penguin toy includes a QR code that links to the penguin character in the Pudgy World Web3 game. In addition, Pudgy World is an online adventure game developed by blockchain company zkSync Era. Players can customize their penguin characters and participate in missions. The physical plush toys of Pudgy Penguins are now claimed to have sold over 1 million units. They have also started collaborating with Lotte Market in South Korea.
Ape Water recently joined the Thank Ape accelerator, hoping to open the door for NFT licensed products in the food industry.
The once dominant Bored Ape series in the NFT community also began exploring opportunities to monetize their IP and metaverse games. However, only a California-based startup called Ape Water actually utilized the ape avatar authorization for manufacturing and production. APE Water promotes its product as natural spring water from the mountains of the United States, with packaging design and materials 100% made in the USA. Its distribution channels include 7 Eleven, Terrible’s, Green Valley Grocery, and more.
In terms of avatar designs, Bored Ape anthropomorphizes apes, and the expressions and accessories may not be suitable for developing a mass market. In comparison to the simple lines of Pudgy Penguins, the production of Bored Ape products that accurately depict the details of the apes in print poses a major challenge in packaging design.
Through the OverpassIP product licensing platform, Pudgy Penguin NFT holders can apply for NFT IP licensing to develop new Pudgy Toys production lines. Pudgy Penguin holders can receive 5% royalty from the authorized plush penguin toys. Pudgy Penguin NFT holders not only own the NFTs but also continuously generate profits from the real-world.
The early founders of Pudgy Penquins were Cole Villemain and Clayton Patterson. Cole Villemain was accused of making empty promises to the community, failing to deliver on token, game, and educational book projects, and embezzling funds for personal gain. This early founder was voted out and later sold the company’s equity to Luca Netz.
In April 2022, Luca Netz acquired Pudgy Penquins for 750 ETH (equivalent to $2.5 million at the time). This 25-year-old entrepreneur appeared on the cover of Forbes magazine with the headline “Furry: Forget the Bored Apes, Thank Walmart for Signing This Non-Flying Plush Bird – 25-Year-Old Entrepreneur Creates the Hottest and Cutest NFT Series.” Luca Netz’s rise to success is quite mysterious and inspirational. He was a homeless street youth at the age of 16, sleeping on other people’s couches. Born in Los Angeles, his family’s poverty forced him to drop out of high school. At the age of 18, he founded his first company, selling fake gold necklaces on Shopify, which made him a millionaire at the age of 19. He invested in the Von Dutch casual cap brand and has a good taste and experience in the retail market and e-commerce. Before taking over Pudgy Penguins, he was the marketing director of Gel Blaster toys, showcasing his excellent public relations skills and making it easier for him to enter retail channels.
As for the early founders who exited, what are they doing now? Cole Villemain (X @ColeThereum) announced today on X that he is selling his penguins with an asking price of $8 million.
The American retail industry is facing unprecedented inflationary pressures, with transportation, warehousing, and manufacturing costs soaring. In recent years, due to poor security, many department stores have chosen to close their storefronts due to frequent robberies. Combined with supply chain and product promotion issues, Pudgy Penguins founder Luca Netz is preparing to expand into the Korean and Japanese markets in Asia. Perhaps he will face challenges in another geopolitical economy. The anime and toy markets in Japan and Korea have loyal supporters that have remained strong for a long time. It is worth continuing to observe whether Pudgy Penguins can establish a foothold in these markets.
Ape Water
Pudgy Penguins
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