In brief
- Pudgy Penguin’s approach to consumer packaged goods is changing.
- A veteran of the toy industry is behind the NFT project’s shift.
- He wants to strike strategic deals with big-box stores.
If the Pudgy Penguins brand was an island like Hawaii, then it would be toward the beginning of a years-long phase, where molten lava erupting from the ocean’s floor has started cooling and forming newly habitable land.
That’s according to Steve Starobinsky, at least. With decades of experience in the toy-making world, Starobinsky was tasked in March with refining Pudgy’s approach to consumer packaged goods. But he acknowledged in a recent interview with Decrypt that Honolulu’s iconic beaches didn’t form overnight.
As Pudgy’s director of business development and partnerships, Starobinsky said his newest role requires a relatively methodic approach to the reactionary sprints that many crypto-native projects embark on, especially when dealing with big-box stores.
For example, he said the purchase orders that will put goods in front of consumers during the next holiday season have already been signed, following a Los Angeles-based event that takes place annually in September for manufacturers and retailers.
“They saw the boxes, they saw the licenses, they saw the piece counts,” Starobinsky said. “But if you miss that September cycle, you have missed [the following year’s] Christmas.”
Pudgy Penguins has managed to establish itself as a leader in the once-hyped NFT space since the project was acquired by CEO Luca Netz in 2022. But as the company searches for dollars beyond the cryptosphere, it’s placing more power in Starobinsky’s toy-making hands—and betting on his ability to navigate an industry that’s foreign to most of his peers.
The company’s push with consumer packaged goods currently involves collaborations with name brands like Bearbrick, PEZ, and book publisher Penguin Random House, but Starobinsky said the company’s bet will appear bigger next year.
“Most of my efforts will showcase themselves in 2026,” he said. “We have a lot of physical merchandise that’s available for this Christmas, but it’s nowhere where I think we can be, considering the amount of eyeballs that we capture.”
As of December, Pudgy Penguins’ namesake NFT collection was the third most-valuable overall, with a market capitalization of around 47,000 ETH, worth $159 million, according to NFT Price Floor. It has also released two other collections worth more than $50 million combined.
In addition to that, Pudgy released a token on Solana last year called Pengu. The token was recently valued around $818 million, according to CoinGecko. The company has also released a blockchain-based mobile game in tandem with Mythical Games.
That’s a far different world than plushies and keychains.
Starobinsky described himself as “a kid at heart,” with experience on teams that crafted goods for brands like Paw Patrol and Minecraft. He said he also worked on the team that launched PopSockets, the collapsible phone accessories that come in countless colors.
In that sense, he said he’s familiar with how Pudgy’s playful, hand-drawn look can resonate with younger generations and adults alike. Accordingly, the children’s book released this year is targeted at readers aged four through eight.
“Playful brands are dominating pop culture,” he said. “I’ve been very fortunate to work on a lot of intellectual property right at that moment where it goes from niche to mass.”
Winter is coming
Then again, Starobinsky and Netz, whose real name is Luca Schnetzler, have been friends for years. The two worked alongside each other at a company called Gel Blaster, where Netz served as chief marketing officer. Satorbinsky worked as the company’s head of sales.
“We created a new category, something between Nerf guns and paintball,” he said. “The hottest thing on the internet—Luca was a huge part of that, driving that narrative.”
Starobinsky’s work hinges on Pudgy’s ability to make inroads with the physical world, but at this point, the company is no stranger to shopping carts across the country.
Pudgy Penguins began selling toys in 2023, and its products have been available in several stores, including Walmart, Target, and Walgreens. As of last October, the company said that it had generated more than $13 million in total sales across over 1 million units.
This year, Starobinsky said “a proper refresh of new goods at retail” wasn’t achievable, chalking it up to the company’s lack of experience regarding physical goods.
Looking to 2026, a Pudgy spokesperson told Decrypt that the firm is aiming for over $20 million in retail sales between licensed and self-sourced products. They added that Starobinsky currently oversees six people, who work in business development, events, and public relations.
Starobinsky has been impressed by Pudgy’s foray into physical goods, but he said the company can do more to compete with established names. That involves spending money on marketing and advertising at a time when competitors usually would not, he explained.
Starobinsky said that manufacturers typically help retailers advertise their toys during the final months of the year, but that commitment often ends on Dec. 26, as stores markdown costs to motivate shoppers and make room for fresh inventory. From his perspective, that creates a 45-day “dead zone” that Pudgy can capitalize on as a winter-themed brand.
Starobinsky said that striking deals with retailers, with the prospect of bigger advertising commitments, can help it bridge the gap between the New Year and Valentine’s Day. Moving forward, he said one of the Pudgy’s’s biggest goals is to “own winter.”
For example, Pudgy could go to a retailer, commit to running an extra month-and-a-half of advertising, and as a result, stores might not have to “take a price reduction,” Starobinsky said. He floated the prospect of bigger bonuses at retailers for employees that improve margins.
“We thematically make sense to be marketing during the time when others would feel like a price play,” he said. “That is a deep strategic advantage for our brand.”
In the last two months of 2023, hobby, toy and game stores generated 26.2% percent of their annual sales, compared to 18% across all categories, according to Statista. But it’s not about avoiding the holiday season, Starobinsky said—it’s about extending it.
“Whenever you’re building go-to-market strategies, it’s a lot better when you don’t have to ram up against some competition,” he said. “When you’re actually attacking white space, you have much more likelihood of success.”
Allowing companies to plan promotions around Pudgy’s products is key, he added, as the company devises its own campaigns that stack on top of each other. Still, Starobinsky underscored that post-New Year’s and Valentine’s Day will stay as priorities.
“The way to win at retail—how to go from good to great—is to win promotional space,” he said. “Thats how you go from millions of dollars to hundreds of millions of dollars in retail sales.”
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
