Did Pudgy Penguins create a game "without encryption"?

Author: Deep Tide TechFlow

Two months ago, the little penguins of Pudgy Penguins just rang the bell on Nasdaq. Various institutions both inside and outside the industry, such as Coinbase and VanEck, even changed their profile pictures for it.

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

On August 30th, Pudgy Penguins' new game Pudgy Party was launched on major mobile game stores, further gamifying their IP. At the same time, according to some overseas KOL analyses, after the game's launch on the stores, it briefly reached the top 10 of the free games chart.

The editor recently downloaded this game and tried it out, finding that it is very different from the blockchain games that deliberately emphasized the integration of encryption and gaming in the last cycle.

There is no wallet connection, no NFT marketplace, no on-chain token rewards in Pudgy Party... nothing at all. This is just an ordinary mobile party game, no different from the casual games you can download from the App Store.

Interestingly, the game is quite fun.

If you have played Fall Guys, you must have smiled knowingly when entering the game interface, a mini-game where multiple players compete against each other to survive until the end, easy and relaxing without any "gold farming" vibes, pure and even devoid of any crypto flavor.

An NFT project created a game that doesn't mention NFTs at all. After experiencing it for a while, I also want to talk about this "not very Web3" Web3 game.

No chain, only play

When you open Pudgy Party, the first reaction is where to connect the wallet? There isn't one.

What about the NFT Marketplace? It's not there either. Token reward system? Still not there.

In comparison, for the last cycle's benchmark blockchain game Axie Infinity, you need to buy three NFT pets to start playing. StepN requires you to buy NFT shoes. Even for relatively "light" blockchain games, there is at least a "Connect Wallet" button placed prominently.

If it weren't for the iconic little penguin image of Pudgy Penguins appearing in the game, you might think this is 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. Everyone controls a cute and clumsy penguin, competing in various bizarre levels.

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

For example, in a typical obstacle course level, 20 penguins represent 20 players, racing on a track filled with traps, with spinning hammers, moving platforms, and suddenly collapsing floors ahead. All you have to do is not fall off and reach the finish line.

But when 20 penguins huddle together, the scene becomes particularly chaotic and funny: some are knocked away by hammers, some are pushed off a plank, and others, who are clearly close to the finish line, end up stepping into thin air and falling.

It is the kind of easy that has nothing to do with light and blockchain games.

First, there is no rank pressure. Although the game has a leveling system, it is purely for unlocking new penguin skins and emotes, and does not affect matchmaking.

Second, there are rewards even if you lose. Even if you get eliminated in the first round, you can still earn experience points and some costume fragments. The system also kindly displays "Better luck next time!" along with a comforting penguin emoji.

Third, you can exit at any time. There are no penalties for exiting midway, and there is no need to learn various upgrades and invest resources to mine.

I specifically looked for whether there would be any hidden crypto elements in the game, but the facts prove that there are indeed none, at least not at the beginning of the game.

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

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

First, each player will automatically create a wallet based on Mythos Chain (Polkadot ecosystem). However, this wallet is completely in the background, and users cannot see the address, private keys, or mnemonic phrases; they see nothing at all. You don't even know if this wallet really exists.

Finally, there is the PENGU token. The officials said "exploring integration solutions", but there is no trace of the token in the game at all. No staking, no rewards, no consumption scenarios.

In other words, all Web3 functionalities are in a state of extreme restraint in terms of "pie-in-the-sky" and design; this de-Web3ification is likely intentional.

Sir, the times have changed.

From a timing perspective, the Pudgy Party was released during a period of narrative reconstruction in the crypto market.

The GameFi narrative has cooled down, the Play to Earn model has proven unsustainable, and people have long been disillusioned with blockchain games and NFTs, with a kind of mockery that even "dogs don’t play it."

More importantly, Apple and Google still have many restrictions on applications that contain NFT trading features. There have been reports that major app stores require a 30% commission on all NFT transactions, which is almost fatal for Web3 games.

From the audience perspective, Pudgy Penguins clearly aims to reach a broader user group. There are over 3 billion mobile game players worldwide, while the number of active on-chain users may be less than 100 million. Setting a Web3 threshold from the beginning automatically excludes 99% of potential users.

From a product strategy perspective, this resembles a "Trojan Horse" strategy.

First, attract users with an entertaining free game to establish a user base and gaming habits, and gradually introduce Web3 elements in the future. Once users have developed a fondness for the game and the IP, the resistance to accepting wallets and NFTs will be much lower.

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

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

When Pudgy Penguins plush toys sold out at Walmart, buyers actually didn’t need to know what an NFT was; when penguin emojis went viral on social media, users didn’t even need to connect a wallet.

When Web3 no longer emphasizes Web3

The launch of Pudgy Party may mark a turning point in the development ideas of NFT projects.

In the past, the logic of NFT projects creating games was: I have NFTs → holders need more benefits → create a game for them to play → by the way, issue a token. This is a closed loop from the inside out, serving the thousands of existing holders.

Pudgy Penguins has turned it around: create a fun game → attract millions of users → they might buy toys → a very small number might buy NFTs. This is a funnel from outside to inside, targeting mobile game players outside the circle.

Relying solely on token incentives and speculative trading is not sustainable; true value must return to products and user experience.

A more interesting observation is that Pudgy Penguins seems to have turned Web3 elements into a "premium option":

• Regular users: Play free games, buy a $10 plush toy
• Advanced users: Collect limited edition outfits and participate in community activities.
• Core users: Purchase NFTs and hold PENGU tokens

This is somewhat similar to the "freemium" model of internet products, where free products attract a large number of users and then convert some of them into paying users.

It's just that here "payment" has turned into "on-chain".

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

But what about the tokens?

This is the biggest controversy of the Pudgy model: if success can be achieved without tokens, where is the value support for the tokens?

Currently, PENGU seems more like a stock of the Pudgy ecosystem; buying it is betting that this IP will grow bigger, rather than because it has any actual utility.

But from another perspective, owning Disney stock does not grant you free entry to Disneyland, yet that does not prevent it from being a quality asset. The key is whether the company can continuously create value, rather than what "empowerment" the stock itself has.

Of course, this analogy is not entirely appropriate.

Stocks have dividends and voting rights, while PENGU currently has neither. This is also a problem that 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 may be "Chain as backend": Blockchain retreats to the background, becoming a technology infrastructure rather than a product selling point.

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

As for whether this model can succeed and whether it can be replicated by other projects, it is still too early to draw a conclusion.

But at least, Pudgy Penguins offers a different possibility:

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