Floptober is in full force in NFTs, with sales now down for the seventh week in a row. It’s not just the market that’s suffering this season, as some of NFT’s biggest native brands, like Yuga Labs and Proof Collective, announced significant layoffs last week. Never before has the impact of the recession on the market been so tangible.
Along with their first major layoffs, Yuga Labs announced that they would be changing the core focus of their company. Instead of building supporting games themselves, they are now turning entirely to third parties who bring more experience and allow them to focus on their Otherside metaverse and on the community.
As a poster or roadmap for NFT projects, many projects followed Yuga Labs’ lead in game development. But the difficulty of building fun and engaging games cannot be underestimated, and we now see where that game plan may lead. While Yuga Labs has the resources to outsource future games and focus on their Made with Apes intellectual property licensing platform, many projects went all-in on gaming. It could prove to be a costly mistake.
The Pudgy Penguins are winning this crypto winter with a similar two-tiered gaming and IP-focused model, but their brute force marketing outside the existing NFT community shows that money can be raised in a bear market. Thanks to viral social media campaigns and business acumen, Pudgy Penguins toys are now on the shelves of 2,000 Walmart stores in the US, and since last week in Smyths stores in Britain
So far, 25% of Walmart’s Pudgy Penguins toy inventory has sold out, and while it’s impossible to know the value of those sales at this point (Walmart’s total supply is estimated at around $300 million), it’s safe to say that the Pudgy Penguins have come up with a recipe for success.
This success translates directly into their NFT value, which is where the average Pudgy Penguin NFT price rose in October $8,875, an increase of more than 11% compared to January. NFT holders whose NFTs are listed as toys also benefit every time their corresponding toys are sold, earning royalties that are currently estimated this year will be approximately $2,000.
The difference between the Yuga Labs and Pudgy Penguins licensing platforms seems to be that the Pudgy Penguins team does the heavy lifting of finding deals for holders, while Yuga Labs acts as a middleman for anyone willing to trade. Ultimately, both strategies can work, but the real takeaway here is that the Pudgy Penguins are achieving success that was elusive to most during a bear market.
The current game plans of both projects point to the importance of IP for NFT projects, with it being the main focus of Pudgy Penguins, and Yuga Labs now making it a much bigger focus. In the infancy of the new IP meta, we can sit back and watch as today’s elite NFT companies blaze a trail for the rest to follow. Future NFT builders, I hope you’re paying attention, because this is a path you’ll likely be taking soon. It’ll just be less bumpy thanks to the efforts of a few bored and weathered animals.
The NFT market fell almost across the board last week and will continue to fall until collectors find value. How low that can go depends on what NFTs are offering, but so far not much is being offered. Closed last week with net $55 million in global NFT sales, marking the first time sales have fallen below $60 million since the week of February 8, 2021. Unique sellers, buyers, and transactions are all down from the week before, although they are all still up exponentially from February 8. , 2021.
- DMarkt and their gaming skin NFTs (CounterStrike, DOTA2, etc.) generated sales of over $8.9 million, once again outperforming the #2 and #3 ranked collections combined.
- Cryptoadz are in the top ten this week thanks to a single “fat finger” 1,055 ETH sale from Cryptoadz #4030. The offer was actually intended as 1,055 ETH.
- Pudgy penguins sales soar to over $1.3 million this week and have quietly climbed to the #19 ranked NFT collection of all time.
- The gods are back in style this week with US$877,000 in, and a fresh new collection “reset” to look forward to.
- Ethereum revenue is down 9.14% this week to $36 million, and wash trading continues to decline as speculators still operate SoFi platforms.
- DMarket again accounts for 99% Mythos Chains US$8.9 million in revenue, even with the launch of the blockchain’s newest game, Nitro Nation World Tour.
- Solanas $6.7 million in sales was generated from multiple collections that appeared in the 24-hour top 10 last week, including Bozo Collective, Reavers and Fidelion.
- Polygon saw $4.7 million in sales in a week when co-founder Jaynti Kanani announced he was taking a step back from the “daily grind.”
