Why chubby penguins turned to this toy guru to reach the masses

If the Pudgy Penguins brand were an island like Hawaii, it would be at the beginning of a years-long phase in which molten lava erupting from the ocean floor begins to cool and form new habitable land.

At least that’s according to Steve Starobinsky. With decades of experience in the toy business, Starobinsky was tasked in March to refine Pudgy’s approach to consumer packaged goods. But he acknowledged this in a recent interview with Declutter that Honolulu’s iconic beaches didn’t happen overnight.

As Pudgy’s director of business development and partnerships, Starobinsky said his latest role requires a relatively methodical approach to the reactionary sprints that many crypto-native projects undertake, especially when it comes to large stores.

For example, he said, the purchase orders will place goods with consumers during the period next holiday season have already been signed, following an event in Los Angeles that takes place annually in September for manufacturers and retailers.

“They saw the boxes, they saw the licenses, they saw the quantity,” Starobinsky said. “But if you miss that September cycle, you’ve missed [the following year’s] Christmas.”

Pudgy Penguins has managed to establish itself as a leader in the once hyped game NFT space since the project was taken over by CEO Luca Netz in 2022. But as the company looks for dollars beyond the cryptosphere, it’s putting more power in the hands of Starobinsky’s toy maker — and betting on its ability to govern an industry that’s foreign to most of its peers.

The company’s efforts in consumer packaged goods currently include partnerships with well-known brands such as Bearbrick, PEZ and book publisher Penguin Random House, but Starobinsky said the company’s commitment will look bigger next year.

“Most of my efforts will manifest in 2026,” he said. “We have a lot of physical merchandise available for this Christmas, but I don’t think we can be anywhere given the number of eyeballs we’re catching.”

As of December, Pudgy Penguins’ eponymous NFT collection was the third most valuable collection, with a market cap of approximately 47,000 ETH, worth $159 million, according to NFT price floor. It has also released two other collections with a combined value of more than $50 million.

In addition, Pudgy issued a token on Solana last year called Pengu. The token was recently valued at approximately $818 million Coin gecko. The company has also released a blockchain-based solution mobile game in combination with Mythical Games.

That’s a completely different world than cuddly toys and key chains.

Starobinsky described himself as “a kid at heart,” with experience on teams making goods for brands like Paw Patrol and Minecraft. He said he also worked on the team that launched PopSockets, the foldable phone accessories that come in numerous colors.

In that sense, he says he knows how Pudgy’s playful, hand-drawn look can appeal to younger generations and adults alike. That is why the children’s book published this year is intended for readers aged four to eight.

“Playful brands dominate pop culture,” he says. “I was fortunate to be able to work on a lot of intellectual property at that time, where it went from niche to mass.”

Winter is coming

On the other hand, Starobinsky and Netz, whose real name is Luca Schnetzler, have been friends for years. The two worked side by side at a company called Gel Blaster, where Netz served as Chief Marketing Officer. Satorbinsky worked as the company’s head of sales.

“We’ve created a new category, something between Nerf guns and paintball,” he said. “The most popular thing on the internet: Luca played a big role in that and was the driving force behind that story.”

Starobinsky’s work depends on Pudgy’s ability to penetrate 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 were available in several stores including Walmart, Target and Walgreens. Last October, the company said it had generated more than $13 million in total sales across more than 1 million units.

This year, Starobinsky said that “a proper renewal of new goods in retail” was not feasible, which is due to the company’s lack of experience in physical goods.

Looking to 2026, a Pudgy spokesperson said Declutter that the company is targeting more than $20 million in retail sales between licensed and self-manufactured products. They added that Starobinsky currently oversees six people, who work in business development, events and public relations.

Starobinsky is impressed with Pudgy’s foray into physical goods, but he said the company can do more to compete with established names. That means spending money on marketing and advertising at a time when competitors normally wouldn’t, he explained.

Starobinsky said manufacturers typically help retailers advertise their toys during the last months of the year, but that obligation often ends on Dec. 26 as stores reduce costs to motivate shoppers and make room for new inventory. From his perspective, that creates a 45-day “dead zone” that Pudgy can take advantage of as a winter-themed brand.

Starobinsky said striking deals with retailers, with the prospect of bigger advertising commitments, could help the company bridge the gap between New Year’s and Valentine’s Day. Moving forward, he said one of the Pudgys’ biggest goals is to “own winter.”

For example, Pudgy could go to a retailer and commit to an additional month and a half of advertising, meaning stores might not have to “take a price cut,” Starobinsky said. He raised the prospect of bigger bonuses at retailers for workers who improve margins.

“It makes thematic sense to do marketing at a time when others would feel like there should be a price toy,” he said. “That is a major strategic advantage for our brand.”

In the last two months of 2023, hobby, toy and game stores generated 26.2% percent of their annual revenue, compared to 18% across all categories, according to Statistical. But it’s not about avoiding the holidays, Starobinsky said, but about extending them.

“Any time you develop go-to-market strategies, it’s a lot better if you don’t have to compete against the competition,” he said. “If you actually attack the white space, you have a much better chance of success.”

It’s critical that companies can plan promotions around Pudgy’s products, he added, because the company comes up with its own campaigns that stack on top of each other. Still, Starobinsky underlined that post-New Year’s and Valentine’s Day will remain priorities.

“The way to win in retail – how to go from good to great – is to win promotional space,” he said. “That’s how you go from millions of dollars to hundreds of millions of dollars in retail sales.”