Pudgy Penguins just hired a toy-industry veteran to do something simple but hard: turn an NFT cult favorite into a mass-market brand.
Steve Starobinsky—who cut his teeth on products tied to Paw Patrol, Minecraft and the PopSockets phenomenon—joined Pudgy Penguins in March as director of business development and partnerships to lead the project’s push into consumer packaged goods (CPG). The move signals a deliberate shift: rather than sprinting like many crypto-native teams, Pudgy is trying to build slow, sustainable traction on supermarket shelves and mall displays.
“This is not instantaneous,” Starobinsky told Decrypt. He used a vivid metaphor: if the Pudgy brand were an island, it’s only just starting to cool from fresh lava into habitable land. The implication is strategic patience—hit the right retail cycles or miss an entire year’s holiday selling opportunity. “They saw the boxes, they saw the licenses, they saw the piece counts,” he said of retail buyers. “But if you miss that September cycle, you have missed [the following year’s] Christmas.”
Why it matters for crypto
Pudgy Penguins is one of the better-known success stories from the NFT boom. After Luca Netz (also known as Luca Schnetzler) bought the project in 2022, the brand stabilized and began expanding beyond on-chain collectibles. As of December, Pudgy’s namesake NFT collection ranked as the third most-valuable overall with a market cap of roughly 47,000 ETH (~$159 million), per NFT Price Floor. The project has released two additional collections worth more than $50 million combined and launched a Solana token, Pengu, which was recently valued at about $818 million on CoinGecko. Pudgy has also released a blockchain-based mobile game in collaboration with Mythical Games.
But crypto assets alone don’t put stuffed animals in shopping carts. That’s where Starobinsky’s remit begins: translate on-chain fandom into physical products people see, touch and buy.
Retail footholds and product partners
Pudgy began selling toys in 2023 and has already secured distribution in major retailers including Walmart, Target and Walgreens. By last October the company reported more than $13 million in sales across over one million units. Pudgy’s current CPG push includes licensed collaborations with Bearbrick, PEZ and book deals with Penguin Random House. Starobinsky says more consequential rollouts will arrive in 2026: “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.”
Starobinsky’s background helps explain why he’s driving that bet. He and Netz go way back—both worked at Gel Blaster where Netz was CMO and Starobinsky ran sales. He also helped launch PopSockets and other mass-market toy products, giving him experience translating niche IP into cultural ubiquity. “Playful brands are dominating pop culture,” he said. Pudgy’s children’s book this year, aimed at 4–8 year olds, is an example of how the brand is being adapted for younger audiences.
A playbook for “owning winter”
Starobinsky is candid about what the brand needs to scale: more expertise, more marketing spend, and smarter retailer partnerships. He identified a retail “dead zone” that creates opportunity—after the typical flurry of holiday advertising ends on Dec. 26, many toy campaigns drop off and stores mark down prices to clear inventory. Pudgy’s winter-themed IP can fill that gap. By committing to extra post-holiday advertising and tying promotions to retailer incentives (even bonuses for store employees who improve margins), the brand can keep selling through New Year’s and into Valentine’s Day.
“Thematically we 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.” Statistics underline the payoff of a long holiday season: hobby, toy and game stores capture a disproportionate share of annual sales late in the year—26.2% of their yearly revenue falls in the last two months, according to Statista.
Operational reality and targets
Starobinsky admits 2024 was a learning year—Pudgy couldn’t execute a full retail refresh in time because it lacked experience producing physical goods. Looking ahead, the company is setting firm targets: a spokesperson told Decrypt it aims for over $20 million in retail sales in 2026 across licensed and self-sourced products. Starobinsky currently oversees a six-person team covering business development, events and PR as they build the systems needed to scale.
Why this move matters to crypto watchers
Pudgy Penguins is testing a crucial thesis for web3 IP: NFTs and tokens can attract passionate communities, but long-term growth often depends on traditional channels—physical products, retail partnerships and mainstream marketing. If Starobinsky can “own winter” and extend the holiday lifecycle for a brand born on-chain, Pudgy could provide a template for other projects seeking to move from Discord servers and marketplaces into shopping aisles and family book nooks.
Either way, the experiment will be watched closely: it’s a live case study in whether crypto-born IP can turn cultural momentum into repeatable, mass-market commerce.
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