Interview: Kean, Foresight News
Interviewee: Luca Netz, DWF Labs
Compiled by: Karen, Foresight News
This interview with Luca Netz covered discussions on Pudgy Penguins’ core competitive advantages, plans for 2024, the possibility of token issuance, and the likelihood of similar airdrops to DYM.
In 2023, “King of NFT” trophy belongs to none other than Pudgy Penguins. While the entire NFT market was experiencing a downturn, with blue-chip NFTs like Bored Ape Yacht Club (BAYC), Moonbird, Doodles, and others seeing a significant drop in trading volume and floor prices, Pudgy Penguins went against the trend. The floor price continued to rise, consistently setting new all-time highs, and last month, it even surpassed the 18 ETH mark.
Pudgy Penguins’ rise is evident in not only the significant increase in floor prices and their understanding and implementation of IP creation, community development, and offline integration. Simultaneously, Pudgy Penguins’ diverse expansion into physical toys, games, and other areas has achieved noteworthy success. These factors set them apart in the fiercely competitive NFT market and establish a solid foundation for future development.
How were Pudgy Penguins developed? What significant plans are in store for 2024? Is there a possibility of token issuance? Will NFT holders receive airdrops similar to DYM in the future? Addressing a series of questions from the community, Foresight News conducted an exclusive interview with Pudgy Penguins CEO Luca Netz to gain insights into the project’s core strengths and future development plans.
What are the core competitive advantages of Pudgy Penguins?
The remarkable success of Pudgy Penguins did not happen overnight. From brand building and IP creation to the accumulation and consolidation of online and offline joint marketing efforts, each step has laid a solid foundation for the development of Pudgy Penguins.
Regarding the core competitive advantages of Pudgy Penguins, Luca Netz stated, ‘We have a globally recognized IP, and we have conducted large-scale marketing and distribution. Branding and marketing are crucial for the development of this industry. This is also where Pudgy Penguins leads the NFT industry. When the technology is more or less the same, it is essential to focus on branding and marketing, and the power of a brand is immeasurable.’
Brand Building
An excellent IP possesses strong identification, high recognizability, and appropriate character positioning. The image of Pudgy Penguins, coupled with its character positioning, not only aligns with the aesthetic preferences of young people for Penguis and a “pudgy style” but also evokes emotional resonance from audiences of different age groups, achieving a multiplier effect.
As Luca Netz mentioned, apart from macro factors, a significant reason many NFT series faced stagnation in 2023 was the lack of substantive elements or content. Pudgy Penguins, on the other hand, has been consistently building a genuine brand over the past two years.
Furthermore, the introduction of physical dolls, plush toys, decorative pins, and the like has made the character image of Pudgy Penguins more three-dimensional and complete. This consistency in the image allows fans to quickly establish a connection with the virtual character when encountering physical products, further deepening their sense of identification with Pudgy Penguins. Regarding physical toys, Luca Netz told Foresight News that Pudgy Penguins sold over 750,000 physical toys within seven months.
Marketing
According to Luca Netz, marketing is also one of the most crucial core competitive advantages for Pudgy Penguins. In today’s highly developed digital era of social media, a successful IP needs to leverage these platforms to expand its influence, dissemination, and exposure, while also enhancing fans’ sense of belonging and engagement. Pudgy Penguins also emphasizes the rapid and frequent release of interesting and creative content to meet users’ demands for freshness and immediacy.
Pudgy Penguins has adopted a series of targeted strategies, utilizing channels such as social media and the sale of offline physical products to convey the brand philosophy and product information to the target audience.
Speaking in terms of data, Luca Netz mentioned that Pudgy Penguins receives billions of exposures every month.
- Pudgy Penguins has over 8,300 related GIFs on the dynamic GIF image search engine (https://giphy.com/pudgypenguins/), with a cumulative view count exceeding 13.8 billion.
- Pudgy Penguins has 1.235 million followers on Instagram, with tens of thousands of likes on each post.
- Pudgy Penguins has 250,000 followers on the international version of TikTok, with a cumulative likes count of 7.1 million. Notably, the first pinned video has garnered nearly 13 million views.
In addition to online marketing and events, Pudgy Penguins also frequently appears at offline events such as the Miami Basel Art Fair, adding more exposure and influence to its brand. Regarding offline events, Luca Netz revealed that there are some more significant plans for 2024.
IP Licensing
Pudgy Penguins has established closer ties and a shared value concept with NFT holders, sharing its success and commercial value with the holders to make Pudgy Penguins more competitive in the market.
Luca Netz stated, ‘Pudgy Penguins recently paid millions of dollars in licensing fees to Pudgy Penguins NFT holders who authorized IP, we will subsequently receive more Pudgy Penguins licenses. We aim to be the first licensed IP in the Web3 space, becoming the next IP like Hello Kitty or Pokemon.’
Just last month, Pudgy Penguins launched the IP licensing platform, OverpassIP, supporting large-scale, transparent, on-chain authorization of IP holders. This marks a significant step for Pudgy Penguins in promoting NFT licensing and materialization.
Meanwhile, Pudgy Penguins introduced the second chapter of the Pudgy Toys toy licensing application, bringing 88 Pudgy Penguins and Lil Pudgys into real life, creating physical toys such as plush toys and dolls. This allows more fans and consumers to experience the charm of these chubby penguins firsthand.
Pudgy Penguins Ventures into Gaming
To further expand its brand influence, explore new business models, and provide a more diverse and enriching interactive experience, Pudgy Penguins is also venturing into the gaming arena. Luca Netz has previously emphasized the importance of consumer-facing products in the Web3 space.
In 2024, Pudgy Penguins plans to launch two arcade games, and Pudgie World is a manifestation of this perspective. Luca Netz also mentioned that delivering outstanding gaming products is their next short-to-mid-term goal and priority. Currently, 15 people are working full-time on Pudgie World.
Regarding the two arcade games, one is a crane game, and the other is a two-player Runner Game. These games will be filled with fun and challenges, providing players with a relaxed and enjoyable atmosphere, allowing them to have fun and deepen their understanding of Pudgy Penguins.
In addition to the arcade games, Pudgie World is another priority for Pudgy Penguins in 2024. Pudgie World, planned for release in the first or second quarter of this year, is supported by zkSync and aims to create a fun, on-chain open-world narrative experience playable by millions.
Pudgy World is the digital experience completing the loop of Pudgy Penguins’ physical products, seamlessly integrating the real world with a digital experience. Owners of Pudgy physical toys can scan the accompanying QR codes, create an account, redeem features, and customize their Forever Pudgy Penguin. An important part of the Pudgy World Alpha release is the introduction of the new characters, Pudgy & Peaches.
Luca Netz’s description of Pudgy World is highly anticipated, likening it to an MMO RPG game with enjoyable, user-friendly features. Although the game will include NFTs and wallets, these aspects will be abstracted to make the gaming experience more akin to conventional video games.
More importantly, Pudgy physical toys are not just simple dolls; they come equipped with unique QR codes that, when scanned, grant access to the Pudgy World game. This combination of physical toys and gaming experience introduces a novel way of interaction and a business model for Pudgy Penguins. It breaks the limitations of traditional toys, allowing fans to freely traverse between the real and virtual worlds, enjoying a more immersive entertainment experience. Simultaneously, this integration significantly contributes to elevating Pudgy Penguins’ brand image and IP value.
In conclusion, Pudgy Penguins’ success in the NFT space is indeed attributed to its identifiable character positioning, brand and IP development, online and offline interactive experiences, innovative marketing strategies, and the upcoming gamified experience. These factors collectively form the core competitive advantages of Pudgy Penguins, making it unique in the NFT space.
Scripts are easy to replicate, but culture is irreplaceable. However, the experience of Pudgy Penguins holds valuable lessons for other NFT projects and entrepreneurs, inspiring more teams and individuals to drive development and innovation in the NFT space.
Other Questions From the Interview
Foresight News: how many people are working at Pudgy Penguins?
Luca Netz: Currently, the Pudgy Penguins team consists of 60 people, and we are planning to expand the team, hiring positions such as Creative Director, Art Director, 2D Illustrators, 2D Animators, and Web GL Developers.
Foresight News: Could you roughly disclose the financial situation of Pudgy Penguins?
Luca Netz: After completing the seed round last year, we had $10 million in the bank, and currently, we still have over $10 million in the bank. We have just delivered $10 million in retail sales. In terms of expenses, we spend between $400,000 to $500,000 per month. I believe we are doing well in terms of revenue and expenses.
Foresight News: What plans and ideas do you have for the future of Pudgy Penguins? What are your personal goals for 2024?
Luca Netz: I hope Pudgy Penguins becomes the first licensed IP in the Web3 space, the next Hello Kitty, the next Pokemon. Building a brand like Pokemon or Disney takes a long time, but I believe we can go viral and quickly break into the mainstream market. I hope that by the end of this year, the mainstream market truly recognizes us.
Foresight News: After Pudgy Penguins has gained attention, it is expected that some other NFT projects will explore the toy and licensing route. Do you think this is replicable?
Luca Netz: I do believe many other NFT projects will try to replicate, but the difference is that we have the cutest, most unique characters and the strongest community.
Foresight News: Is there a possibility that Pudgy Penguins will issue tokens?
In response to this question, Luca Netz gave an ambiguous answer. He stated, “We will do what is always in the best interest of the community and have always operated on that principle. I made a commitment to them very early on, and I plan on fulfilling that commitment, so that’s the only answer I can give you.” Luca Netz responded to the possibility of issuing a token three times in a row with “no comment.”
Foresight News: Dymension’s DYM airdrop includes Pudgy Penguins NFT holders. Will Pudgy Penguins NFT holders receive similar airdrops in the future?
Luca Netz: I believe so. The Pudgy Penguins community consists of some of the most important builders in cryptocurrency, many of whom are whales and early participants in cryptocurrency. Therefore, when you airdrop tokens to the Pudgy Penguins community, you can attract attention. Currently, at least four protocols are in touch with us, and Pudgy Penguins NFT holders are likely to receive similar airdrops in the future.
Foresight News: What are your thoughts on the trends in NFT development? In your opinion, when do you think the NFT hype will explode again?
Luca Netz: I believe the NFT hype will explode again in the next 6 to 12 months. There is a significant growth potential in the digital collectibles market, currently only occupying 1% of the collectibles market (physical collectibles account for 99%). For NFT investors, now is a very good opportunity, and it’s crucial to actively follow and participate in the market’s development.