How an NFT turned plushie thrives with GIFs and ‘Trojan horsing’

From Web3 to Walmart shelves, Pudgy Penguins has defied the odds.

Pudgy Penguins uses a technique known as "Trojan horsing" to thrive

Kennyatta Collins is a freelance brand strategist. Follow him on LinkedIn.

The most intriguing storyline in toys isn’t from industry giants like Mattel or Disney, but from a small team that transformed a struggling NFT project into a challenger brand. The Pudgy Penguins NFT project is now doing $10 million in sales and selling out inventory in over 2,000 Walmart locations thanks to GIFs and an adorable character.

On the heels of Rolling Stone’s scathing report on the worthlessness of NFTs, Pudgy Penguins announced over $400 million in digital collectible sales and a purchase order that would see the world’s largest retailer carry their plush toys and figurines in 2,000 stores.

“We went with Walmart because we wanted to make a big statement. It’s not just any store; it’s where everyone shops,” says Austin Lee, marketing director of Pudgy Penguins. “It’s not every day an NFT project hits the shelves of the largest retailer in the world.”



The toys come with QR codes that can be scanned to authenticate their Pudgy Penguin with a unique birth certificate that allows users to claim traits for a digital version of their character in Pudgy World, an open-world platform currently in its beta phase. Think of it as Club Penguin 2.0.

Building awareness was the first step to becoming a household brand in the toy space and GIPHY was the key to that strategy. GIPHY says it regularly serves more than 10 billion pieces of content to more than1 billion people, putting its reach on par with Meta platforms. “Foundationally, it was just a no-brainer to hop on GIPHY given the goal of mass adoption of our IP and open territory to explore our growth strategies on an otherwise unvalued platform,” Lee says.

The integration of GIFs across social media platforms like Instagram, Facebook, X and Whatsapp allows for a more subtle approach to increasing awareness through keyword associations and establishing familiarity without users having to interact with the brand directly. Whether you’re looking to celebrate a holiday, share positive affirmations, or let your friends know what kind of mood you’re in, there is a Pudgy Penguins GIF ready for use.  

“(Pudgys) have this charm that’s cute and rare — something anyone could see existing in the IP industry regardless of our NFT backstory,” Lee said.

“It starts with Trojan horsing —  using a familiar experience as the entry point to reshape the narrative of the space with a completely unique user journey and experience,” Lee says. And that strategy has seen big success: Disney boasts 16.2 billion GIF views on GIPHY, and Pudgy Penguins surpassed them with 16.5 billion.


View this post on Instagram


A post shared by Pudgy Penguins (@pudgypenguins)

But marketing the Pudgy Penguin characters through GIFs is just a supplement to a short-form video strategy focused on turning the Pudgy Penguins characters into mirror images of the audience they cater to. Often addressing the “if you know you know” cultural jokes and moments, you’ll find Reels and TikToks that address the difference between his and hers skincare routines, how expensive it is to leave the house, or that person who scrolls social media all night until they realize they didn’t get any sleep. By making the characters reflect the lived experiences of their audience, the brand bypasses the need to educate on NFTs and avoids the pitfalls that come with the sometimes scammy reputation of Web3. 

In May of 2023, the brand launched their first run of plush toys and figurines on Amazon and quickly became the “#1 Hot New Release” in the toy category, selling over $500,000 worth of toys in less than a week. The brand found success with parents buying plushies for their kids and young adults buying figurines to collect and show off to friends. Their e-commerce success and compelling experiences at conventions like the New York Toy Fair attracted the attention of the retail giants and gave Walmart the proof they needed to make their first purchase order. 


View this post on Instagram


A post shared by Pudgy Penguins (@pudgypenguins)

While NFTs may still mystify the everyday consumer, adorable plush toys, cool collectibles and GIFs are easier to understand. After a successful initial run, Walmart put in a second order of toys and expanded its footprint to now 3,100 stores. “Our vision is to make entering Web3 as easy as it gets. I believe we’re the gateway for the next wave of blockchain-curious folks to flood the ecosystem,” says Lee. With an almost 20% conversion rate on toy customers scanning their QR codes and claiming their free NFT certificates to unlock their Pudgy Penguin in the Pudgy World, Lee may be right.



PR Daily News Feed

Sign up to receive the latest articles from PR Daily directly in your inbox.