No Wallet, No Token, Just Fun: Pudgy Penguins’ New Playbook

Two months ago, Pudgy Penguins made waves by ringing the bell at Nasdaq. Prominent organizations both inside and outside the crypto space, such as Coinbase and VanEck, even changed their profile pictures to Pudgy Penguins in a show of support.

For Pudgy Penguins, expanding its IP reach appears to have become the central focus for one of the few NFT projects still thriving in the market.

On August 30, Pudgy Penguins took a new step by launching its latest game, Pudgy Party, on major mobile game stores. Some overseas KOLs noted that the game briefly climbed into the top 10 rankings of free games shortly after its debut.

Curious about the hype, I downloaded the game to see what it was all about. What I found was a game that feels completely different from the blockchain games of the previous cycle, which often sought to merge crypto and gaming.

In Pudgy Party, there is no wallet connection, no NFT marketplace, and no on-chain token rewards. It is simply a regular mobile party game, no different from the casual games you might find on the App Store.

The most surprising part? It is genuinely enjoyable.

If you have ever played Fall Guys, you will immediately recognize the vibe when you enter the game. It is a lighthearted multiplayer competition where players race through obstacle courses to be the last one standing. There are no token rewards, no play-to-earn mechanics, and no grinding. It is a straightforward and relaxing game, entirely free of any crypto elements.

An NFT project releasing a game that does not mention NFTs at all is intriguing. After spending some time with it, I wanted to share my thoughts on this Web3 game that feels anything but Web3.

No Blockchain, Just Gameplay

When you open Pudgy Party, your first reaction might be to look for a wallet connection button. However, you will not find one.

What about an NFT marketplace? It is not there either. A token reward system? Still absent.

For comparison, consider Axie Infinity, the flagship blockchain game from the last cycle. Players needed to purchase three NFT pets just to begin playing. StepN required NFT sneakers to participate. Even lighter blockchain games often featured a prominent "Connect Wallet" button on the main screen.

If not for the recognizable Pudgy Penguins characters appearing in the game, you might mistake it for a regular party game.

By clicking "Play," you are matched with 19 other players within seconds and dropped into the first round. Each player controls an adorable penguin, competing in a series of quirky obstacle courses.

From the gameplay experience, this feels like a casual game infused with the Pudgy Penguins IP.

For example, in a typical obstacle race level, twenty penguins controlled by twenty players dash along a trap-filled track. The course includes spinning hammers, moving platforms, and collapsing floors. The objective is simple: avoid falling and reach the finish line.

However, when twenty penguins are packed together, chaos and humor take over. Some get launched into the air by hammers, others are pushed off narrow bridges, and a few fall just short of the finish line.

This is a type of lighthearted fun that feels completely unrelated to traditional blockchain gaming.

• First, there is no pressure to rank up. While the game includes a leveling system, it serves only to unlock new penguin skins and emotes, which do not affect matchmaking.

• Second, losing still comes with rewards. Even if you are eliminated in the first round, you will still earn experience points and some cosmetic fragments. The system even provides a comforting message, "Better luck next time!" along with a cheerful penguin expression.

• Third, you can leave the game at any time. There are no penalties for quitting mid-game, nor are there any mechanics requiring grinding for upgrades or resource investment.

A deliberate search for hidden crypto elements in the game confirms that there are none, at least not at the start.

The in-game store does feature two types of cosmetics: non-tradable items and limited-edition ones. In theory, the limited-edition items could eventually become NFTs. However, there is no visible option to mint or trade them.

The game’s developer, Mythical Games, has stated that the game does include Web3 elements:

First, every player automatically receives a wallet built on the Mythos Chain, part of the Polkadot ecosystem. However, this wallet operates entirely behind the scenes. Users cannot access the address, private key, or recovery phrase, and there is no visible indication that the wallet even exists.

Additionally, there is the PENGU token. The developers have mentioned that they are "exploring integration options," but the token is completely absent from the game. There are no staking features, no rewards, and no mechanisms for spending the token.

In summary, all Web3 functionalities appear to be either in a conceptual stage or deliberately hidden. This approach of minimizing blockchain elements seems to be an intentional design choice.

The Trojan Horse Strategy of Pudgy Penguins

From a timing perspective, the release of Pudgy Party coincides with a period of narrative reconstruction in the crypto market.

The GameFi narrative has cooled off, and the Play-to-Earn model has proven unsustainable. Enthusiasm for blockchain games and NFTs has long faded, with some even joking that "nobody plays these games anymore."

More importantly, Apple and Google continue to impose significant restrictions on apps featuring NFT trading functionality. Reports have also highlighted that major app stores demand a 30% commission on all NFT transactions, a nearly fatal blow for Web3 games.

From an audience perspective, Pudgy Penguins clearly aims to reach a broader user base. There are over 3 billion mobile gamers worldwide, while active on-chain users likely number fewer than 100 million. Setting Web3 barriers from the outset would automatically exclude 99% of potential users.

From a product strategy standpoint, this resembles a "Trojan Horse" approach.

The idea is to first attract users with a fun, free-to-play game, building a user base and fostering gaming habits. Web3 elements can then be gradually introduced in the future. Once players have developed an attachment to the game and its IP, the resistance to adopting wallets and NFTs will be significantly reduced.

In fact, many blockchain game projects from the previous cycle adopted similar strategies in their later stages, but few managed to sustain them over the long term. The key difference here may lie in the stronger brand appeal of Pudgy Penguins, making this approach more likely to succeed.

This leads to an intriguing paradox: the most successful product of a Web3 project might actually be the least Web3-oriented one.

When Pudgy Penguins plush toys sell out at Walmart, buyers do not need to know what an NFT is. When penguin-themed stickers go viral on social media, users do not even need to connect a wallet.

The New Playbook for Web3: When Web3 Becomes the Backend

The launch of Pudgy Party may signify a turning point in the development strategies of NFT projects.

In the past, the logic behind NFT projects creating games was: "I have NFTs → NFT holders demand more benefits → create a game for them → issue a token in the process." This was an inward-focused loop, serving only the existing few thousand NFT holders.

Pudgy Penguins has flipped this approach: "Create a fun game → attract millions of users → some may buy toys → a very small number might purchase NFTs." This is an outward-focused funnel, targeting the broader mobile gaming audience.

Relying solely on token incentives and speculative trading is unsustainable. True value must ultimately return to the product and user experience.

What’s even more interesting is that Pudgy Penguins seems to treat Web3 elements as an "advanced option":

• General users: Play the free game, buy a $10 plush toy.

• Intermediate users: Collect limited-edition skins and participate in community events.

• Core users: Purchase NFTs and hold PENGU tokens.

This is somewhat similar to the "freemium" model used in internet products, where a free product attracts a massive user base, and a smaller portion of those users are converted into paying customers.

The only difference here is that "paying" becomes "on-chain."

If this model succeeds, it could mean that some Web3 projects have discovered a sustainable business path—one that does not rely on bull markets or new speculators, but instead generates revenue like a traditional company through its products and intellectual property.

But what about the token?

This is the most contentious aspect of the Pudgy model: if success can be achieved without the token, then what supports the token's value?

At present, PENGU seems more like a stock in the Pudgy ecosystem. Buying it is essentially a bet that the IP will grow stronger, rather than relying on any practical utility the token might offer.

However, consider this from another perspective: owning Disney stock does not grant you free entry to Disney theme parks, yet that does not stop it from being a valuable asset. The key lies in whether the company can consistently create value, not in whether the stock itself has "utility."

Of course, this analogy is not entirely accurate.

Stocks come with dividends and voting rights, whereas PENGU currently offers neither. This is a challenge the team needs to address—how to provide tangible benefits to token holders without compromising the product experience.

If the narrative of the last cycle was "Everything on chain," then this cycle might be "Chain as backend": blockchain moves to the background, serving as the technical infrastructure rather than the product's main selling point.

Pudgy Penguins may have unintentionally provided a practical example of this approach. Instead of trying to make everyone crypto-native, the goal is to make crypto invisible to the average person.

As for whether this model will succeed or be replicated by other projects, it is still too early to draw conclusions.

At the very least, Pudgy Penguins has opened up a different possibility:

In an era where everyone is shouting "Web3," the most successful project might just be the one that does not mention "Web3" at all.