Company Profile - Pudgy Penguins

Pick up a Penguin

NFT-based IP Pudgy Penguins recently waddled into the toy space thanks to a licensing agreement with P.M.I., and it seems certain a wealth of new deals will follow across a vast range of consumer product categories. Toy World editor Rachael Simpson-Jones spoke to Pudgy Penguins CEO Luca Schnetzler about the IP’s focus on community, what it offers licensees, and how the characters are making collectibles cooler than ever before.

Luca Schnetzler

Chubby little penguins. Some in beanies or pirate hats, others rocking shades. Some with mohawks, others with afros, others still with bows or flowers atop their bald, round heads, tie-dye t-shirts and kimonos on their portly, colourful little bodies. Welcome, reader, to the fastgrowing digital world of Pudgy Penguins.

While some of you will be familiar with NFTs (Non-Fungible Tokens), others may appreciate a quick rundown. An NFT is a digital asset that can be bought and traded, often granting its owner access to exclusive perks such as events and experiences, licensing opportunities and more. Within the core Pudgy Penguin NFT universe there are exactly 8,888 characters (and no more will ever be created), and while the initial mint sold out long ago, you can still get your hands on one – if you have around $8,000 to spare. At the time of writing, that was 4.2 ETH (ether), the Ethereum cryptocurrency used to purchase them on sales platforms such as OpenSea or the Official Pudgy Penguins Marketplace. Those watching the pennies (or cents) can instead buy one of 22,222 Lil’ Pudgy NFTs, which, also at the time of writing, could be picked up for around $600 (0.32 ETH). NFT values rise and fall in line with market conditions, making them both a risk and a potentially lucrative investment: in February, Pudgy Penguin #6873, the rarest of the lot, sold for a record 400 ETH (around $600k). What makes that one so special, you ask? He’s the only Pudgy on a green background and faces left instead of right.

The Pudgy Penguins fanbase has been increasingly steadily since CEO Luca bought the company for 750 ETH, around $2.5m, in April 2022. Before the acquisition, Luca was a big fan with enormous confidence in the IP: in fact, Pudgy Penguins was his first PFP NFT (profile picture non-fungible token) back when buyers used NFTs as profile pictures on social media sites such as Twitter. Armed with the knowledge that people love penguins, Luca set out to build an entire brand based on cute and funny penguin characters that people couldn’t help but adore. Nowadays, the brand is a vast, community-driven ecosystem that promotes positivity, good vibes and happiness – and Luca says this is all down to the Pudgy Penguins fans.

“Regardless of where you are on the scale, everyone has a little ‘pudgy’ in them,” he tells me from his office in California. “We didn’t create the ethos of the brand. The Pudgy Penguins community did, and we just leaned into it. We had no way to know the IP would take off the way it has. We just set out to create a cute penguin character that could become the backbone of penguin IP, and to do something that hadn’t been done before – injecting technology into the IP business and completely shaking it up in the process.”

NFTs aren’t new. The first, a video clip, was created by Kevin McCoy and Anil Dash in May 2014. But in the years that followed, they’ve had their ups and downs, and it’s no secret that many people have expressed doubts about the viability, stability and longevity of the marketplace. Recently, one toy trade entrepreneur described NFTs as ‘having their winter’. I asked Luca whether he thought this was accurate. He told me that while holistically it is, he feels critics aren’t appreciating NFTs for what they are.

“Think about it: NFTs are a huge disruptor to the Collectibles market because they are digital,” he explains. “You’re not limited by shelf space, there’s no friction like packaging or shipping when you buy or sell, you don’t have to worry about insurance or damages once one leaves your house for the intended recipient, there’s no authenticity issues, and no room for scamming – NFT code has absolutely no room for editing. When you look at NFTs through that lens, you can see their time will come. Maybe next year, maybe in five years, NFTs will conquer the traditional collectibles market. And while they’re not currently as hot as they were in 2021, they will come back; when they do, they’ll be bigger and better than ever.”

Digital they may be, but NFT IPs like Pudgy Penguins lend themselves brilliantly to licensed consumer products. Having partnered with Retail Monster to help it jump from digital to physical, the brand is already being licensed within the toy space, with P.M.I. Kids World producing Pudgy Penguin action figures, collectibles and plush based on real NFTs hosted on the blockchain and owned by someone else. Included with each Pudgy Penguin toy is a hidden forever friend adoption certificate that unlocks a special digital experience including a loot box filled with NFTs that can be kept or sold to other collectors in real time. This means kids can buy a toy, make more money selling the NFTs it comes with than they spent in the first place, and still have their physical product at the end of the day. And each time a toy (or any other CP) is sold, the person that owns the NFT it’s based on earns money.

Outside of toys, bespoke LA dessert company, Last Crumb, has partnered with Pudgy Penguins to produce a collection of delicious, highly sought-after licensed cookies. Brand alignment is key – there’s no playing in the digital space without cookies, after all – while a healthy Kids CP segment will be bolstered by sales of $300 Pudgy Penguins-produced high-end collectibles to Kidults, the people collecting the NFTs. These debut this month.

“We have a large base of mature, affluent fans who buy Pudgy Penguin NFTS – we’re talking millions of dollars, for some people,” Luca says. “Pudgy Penguins isn’t just for toddlers, or 7-15-year-olds, or grown-ups. It’s for everyone. And the beauty is that it’s accessible to everyone as well. You don’t have to be a millionaire. You don’t have to be wealthy full stop. There’s a product and a path to brand engagement for all fans of all ages.”

Pudgy Penguins is heading to the Las Vegas Licensing Expo for the first time this year; indeed, it’s the IP’s first licensing fair full stop. Promising a disruptive, exciting presence at the show, Luca’s aim is to shake up the traditional IP world by showing it the beauty of an ‘emerging new era’ heralded by Pudgy Penguins. He also wants to walk away at the end of the show having secured a major licensing partnership. Who with? Unknown. What for? Also unknown. It’s fair to say the door is wide open to any and all interested parties who’d like to chat with Luca at the show. If you haven’t booked an appointment yet, I suggest you do so ASAP.

I asked Luca about his approach to licensing partnerships. What makes Pudgy Penguins a good partner? What kind of licensor will he be? He tells me he’s not interested in sitting back and simply gazing down upon a deal. Successful partnerships require much more than that, which is where Luca brings his winning mindset to bear. Product must sell, and sell it will, with Pudgy Penguins’ entire arsenal of passion and technical expertise behind it.

Luca has supreme faith in what he’s saying and his IP, promising me wholeheartedly that in five years, all leading toy companies will have their own collectible NFT programmes. Referencing the blending of ownership and licensing, the ‘strength of the story’ and the everincreasing value of NFTs – those $8,000 characters mentioned earlier were worth $1,000 a year ago, and based on current projections may well be worth $100,000 five years from now – he says it just doesn’t make sense for companies not to follow suit. For him, though, the focus remains solely on Pudgy Penguins and Pudgy Penguins alone. No other NFT IPs are in the works, meaning its unlikely we’ll see a Hefty Hippos or Chubby Chipmunks IP arriving in the digital marketplace any time soon. However, building out the Pudgy Penguins world will require new characters, and that’s something Luca and his team of ‘all stars’ is exploring behind the scenes.

Readers wanting to explore the world of Pudgy Penguins will discover there’s myriad ways to engage with the portly birds. There’s a Discord server, a Fam-powered Community Page, meme generator and daily penguin trivia. You can create Pudgy Penguin wallpapers and GIFs, become your penguin NFT using Hologram, shop for merchandise and watch animated shorts that have so far racked up tens of millions of views on Instagram. Long form content is a distinct possibility in the future. The perfect IP for social media, Pudgy Penguins’ Instagram audience is growing by around 5,000 users a day, while its Giphy channel tots up in the region of 30-40m views a day. Clearly, it’s time to join the huddle.

“We are reinventing one of the most archaic businesses of all, the Collectibles business, by bringing technology and innovation to toys and IP in a way that’s never been done before,” says Luca. “That’s the key takeaway for your readers: Pudgy Penguins is not just another collectible range sitting on a shelf. It’s so, so much more, and it’s going to totally disrupt the toy industry.”

Pudgy Penguins will be on Stand E220.