As the NFT industry navigates through a phase of lukewarm public interest, some collections are diving deep, branching out into the physical world in an attempt to broaden their appeal and develop their brand.
Pudgy Penguins, a charming NFT collection that also functions as a web3 intellectual property enterprise, is launching a range of toys called Pudgy Toys, reveals Luca Netz, the company's CEO.
These penguin-themed soft toys are being crafted in partnership with PMI, which also manufactures toys for popular games like Fortnite and Among Us, according to Netz.
The company views these physical toys as a "trojan horse" for introducing the web3 ecosystem and NFTs to a broader audience. "Sadly, NFT revenue isn't sustainable or easily scalable," Netz confesses. However, he believes that the toys will provide a more stable income source for the company. "Also, we wanted to establish an IP that transcends this ecosystem, and I know that physical products are a way to do that."
Pudgy Penguins was launched in 2021 and acquired by Netz in April 2022. The collection, consisting of 8,888 NFTs, has since expanded to incorporate real-world products and experiences, ranging from live events to physical goods like the upcoming toy line.
The company has chosen and licensed 16 designs inspired by Pudgy Penguin NFTs from the original collection. The selected NFTs were based on aesthetics, various characteristics, and the level of engagement of the NFT's owner within the community, Netz explains.
"Each toy is an NFT that exists on the blockchain, and that NFT is licensed directly from the owner," Netz adds. "So, every time one of those toys is sold, the owner earns a royalty, in perpetuity."
The initial launch will consist of around 100,000 toys, priced between $5 and $35. These will be sold both online and through international retailers. Each toy comes with a birth certificate and a QR code, which reveals a series of NFTs or a trait box on its online platform, Pudgy World, according to Netz.
"Pudgy World is where you create your character, play mini-games, and interact with other users," he elaborates.
The company's strategy appears to be working: it has recently secured a seed funding round of $9 million. While it's not the first NFT-centric company to attract investment, this financial boost does suggest that venturing beyond the blockchain is a viable strategy for digital collections looking to build their brand and secure external funding.
