Author: TechFlow

Two months ago, Pudgy Penguins rang the bell at Nasdaq. Major institutions, including Coinbase and VanEck, even changed their profile pictures for it.

It seems that for the little penguin, spreading its IP more widely has become the main development line of one of the few surviving NFT projects in this circle.

On August 30th, Pudgy Penguins' new game, Pudgy Party, launched on major mobile game stores, further gamifying its IP. According to analysis by some international KOLs, the game briefly reached the top 10 free games charts after its release.

I recently downloaded this game and tried it out, and I found it very different from the blockchain games of the previous cycle that deliberately emphasized the integration of encryption and gaming:

Pudgy Party has no wallet connection, no NFT store, no on-chain token rewards... nothing. It's just an ordinary mobile party game, no different from any casual game you download from the App Store.

What’s more interesting is that the game is quite fun.

If you have ever played Fall Guys, you will definitely smile knowingly when you enter the game interface. It is a mini-game in which multiple people compete with each other to pass levels and survive to the end. It is easy and casual without any "gold farming" atmosphere. It is pure and does not even have the flavor of encryption.

An NFT project made a game that doesn't mention NFT at all. After playing with it for a while, I also wanted to talk about this "not-quite-Web3" Web3 game.

No chain, only game

When I open Pudgy Party, my first question is where is the wallet connection? There is none.

What about an NFT marketplace? No. Token rewards system? No.

By comparison, Axie Infinity, the benchmark blockchain game from last cycle, requires you to buy three NFT pets before you can even start playing. StepN requires you to buy NFT shoes. Even relatively "light" blockchain games at least have a prominent "Connect Wallet" button.

If it weren't for the iconic Pudgy Penguins penguin character appearing in the game, you might think it was just an ordinary party game.

Click "Play" and after a few seconds of matching, you will enter the first round of the game with 19 other players. Each person controls a cute penguin and competes in various strange levels.

From the experience point of view, this is a pure casual + Little Penguin IP game.

For example, in a typical obstacle course, 20 penguins represent 20 players, running wildly on a track full of traps, with rotating hammers, moving platforms, and suddenly collapsing floors in front of them. All you have to do is not fall down and run to the finish line.

But when 20 penguins were crowded together, the scene became particularly chaotic and funny: some were hit by hammers, some were pushed off the single-plank bridge, and some even missed a step and fell when they were almost at the finish line.

It's the kind of light and relaxing that has nothing to do with the words "light" and "chain game".

First, there's no rank pressure. While the game has a rank system, it's purely for unlocking new penguin skins and emotes, and doesn't affect matchmaking.

Second, there are rewards for losing. Even if you're eliminated in the first round, you'll still earn experience points and some cosmetic fragments. The system even thoughtfully displays "Better luck next time!" accompanied by a comforting penguin emoji.

Third, you can quit at any time. There is no penalty for quitting midway, and there is no need to learn various upgrades or invest resources to earn gold.

I specifically looked for some encryption elements hidden in the game, but it turned out that there were none, at least not at the beginning.

There are indeed two types of costumes in the game store: untradeable and limited edition; theoretically, limited edition costumes can be turned into NFTs. But the problem is that you can't find any entry for minting or trading.

But according to developer Mythical Games, the game does have Web3 elements:

First, each player automatically creates a wallet based on the Mythos Chain (Polkadot ecosystem). However, this wallet is completely hidden behind the scenes, and users cannot see the address, private key, mnemonic phrase, or anything else. You can't even tell if the wallet actually exists.

Finally, there's the PENGU token. Officials say they're "exploring integration options," but there's no trace of the token in the game at all. There's no staking, no rewards, and no spending scenarios.

In other words, all Web3 features are in a state of "pie in the sky" and extremely restrained design; this de-Web3ization is likely intentional.

My Lord, times have changed.

In terms of timing, Pudgy Party was released at a time when the narrative of the crypto market was being restructured.

The GameFi narrative has cooled, the Play to Earn model has proven to be unsustainable, and people have long been disenchanted with blockchain games and NFTs, with some even joking that “even dogs wouldn’t play them.”

More importantly, Apple and Google still have many restrictions on applications that contain NFT trading functions. Previous news has shown that major app stores require a 30% commission on all NFT transactions, which is almost fatal to Web3 games.

Judging by its audience, Pudgy Penguins clearly aims to reach a wider user base. There are over 3 billion mobile gamers worldwide, while there are probably less than 100 million active on-chain users. Setting a Web3 threshold from the outset automatically excludes 99% of potential users.

From a product strategy perspective, this looks like a "Trojan Horse" strategy.

Start by attracting users with a fun free game, building a user base and gaming habits, and then gradually introduce Web3 elements in the future. Once users have already fallen in love with the game and IP, the resistance to accepting wallets and NFTs will be much lower.

In fact, in the last cycle, many blockchain game projects also adopted this model in the later stages, but none of them were able to sustain it for a long time. The key difference here may be that the Little Penguin has a stronger IP appeal, making it easier to achieve results with this gameplay.

This brings up an interesting paradox: the most successful product of a Web3 project may be the least Web3 product.

When Pudgy Penguins plush toys sold out at Walmart, buyers didn’t actually need to know what NFTs were; when penguin memes went viral on social media, users didn’t even need to connect their wallets.

When Web3 no longer emphasizes Web3

The launch of Pudgy Party may mark a watershed in the development of NFT projects.

In the past, the logic behind NFT-based gaming projects was: I have NFTs → holders want more equity → I make a game for them to play → I issue tokens along the way. This was a closed loop, serving the thousands of existing holders.

Pudgy Penguins did the opposite: create a fun game → attract tens of millions of users → they might buy toys → a very small number of them might buy NFTs. This is an outside-in funnel, targeting mobile gamers outside the industry.

Simply relying on token incentives and speculation is unsustainable; the true value must return to the product and user experience.

A more interesting observation is that Pudgy Penguins seems to have turned the Web3 element into an “advanced option”:

• Ordinary users: Play free games and buy a $10 plush toy
• Advanced users: Collect limited edition costumes and participate in community activities
• Core users: Purchase NFT and hold PENGU tokens

This is a bit like the "free value-added" model of Internet products, which first uses free products to attract a large number of users and then converts them into paying users.

The only difference is that the "payment" here has become "on-chain".

If this model is successful, it means that some Web3 projects have found a sustainable business path, that is, not relying on the bull market or new investors, but making money through products and IP like normal companies.

But what about tokens?

This is the biggest controversy of the Pudgy model: if you can succeed without tokens, then what is the value support of the tokens?

At present, PENGU is more like a stock in the Pudgy ecosystem. You buy it to bet that this IP will become bigger and bigger, not because it has any practical use.

But think about it another way: Disney stock doesn't buy you free admission to Disneyland, but that doesn't stop it from being a high-quality asset. The key lies in the company's ability to consistently create value, not the inherent "capabilities" of the stock itself.

Of course, this analogy is not entirely appropriate.

Stocks come with dividends and voting rights, but Pengu currently offers neither. This is a challenge the team needs to address: how to provide tangible benefits to token holders without sacrificing the product experience.

If the narrative of the last cycle was "Everything on chain", then this cycle may be "Chain as backend": blockchain retreats behind the scenes and becomes a technical infrastructure rather than a product selling point.

Pudgy Penguins may have inadvertently provided a practical example, which is not to make everyone a crypto native, but to make crypto invisible to ordinary people.

As to whether this model can be successful and whether it can be replicated by other projects, it is too early to draw conclusions.

But at least Pudgy Penguins offers a different possibility:

In an era where everyone is shouting "Web3", the most successful one may be the one who doesn't mention "Web3".