Pudgy Penguins mobile game axed after losing millions of dollars
Pudgy Penguins CEO Lucas Netz claims his mobile game app Pudgy Party lost the NFT firm millions of dollars before it was shuttered last weekend.
The company announced the closure last Friday. It didn’t explain why Pudgy Party was shuttered, only that its web-based game, Pudgy World, is set to exceed Pudgy Party’s metrics.
“[Pudgy Party] being wholly ours, has everything we need to make it the flagship gaming product of the Pudgy Penguins universe,” the company said.
However, in a follow-up meeting with Pudgy Penguin NFT holders, Netz revealed the key numbers leading to Pudgy Party’s closure.
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According to X user and Pudgy Penguin holder @ChefJames_, Netz claimed that the game had lost the firm millions of dollars and that if it were to continue, it would cost it another $2.5 million.
Netz added that the game experienced a few short months of popularity before its player count sharply dropped to somewhere between 200 and 300 active users.
Pudgy Party promised users more money than a minimum wage job
Pudgy Party was a third-person platformer that drew inspiration from reality show obstacle courses such as Total Wipeout, and was similar to the game Fall Guys, which itself saw player count highs of 172,026 on Steam.
Developed by Mythical Games and launched in August 2025, the game’s monetization system involved selling skins of the game’s penguin character, which buyers could trade.
Some of these listed skins were on offer for up to $100,000 despite possessing an actual value (floor price) of just 50 cents. During the game’s initial launch, some users were paying above $1,000 for skins, while others supposedly spent up to $5,000.
At one point, Netz claimed that the skin system would allow users to make more money than a minimum wage job if they just played the game full time.
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As for what will happen to the skins, @ChefJames_ noted that during the Pudgy Penguin meeting, Netz claimed that there will be a portal put in place for rewards and that skins purchased for Pudgy Party will be transferable to Pudgy World.
More Pudgy Penguin closures to come?
Things could get worse for Pudgy Penguins with the possibility of more closures and cutbacks to come. Indeed, Netz warned that across the coming two weeks, “All Band-Aids will be ripped.”
Some users speculated that Abstact, the blockchain co-founded by Netz, will be on the chopping block next, but not everyone agreed.
During the meeting, Netz also claimed that Pudgy Party didn’t match the brand’s DNA, which is pushing for a social game, aka Pudgy World.
Pudgy World was launched in March 2026 and is another attempt from the firm to create a web3 game. According to Netz, Pudgy World dwarfed Pudgy Party’s player count, with daily player counts up to 20,000.
This game appears inspired by the once popular web game Club Penguin and attempts to recreate the same social experience, albeit with a 3D third-person perspective.
Like Pudgy Party, it also features an ecosystem based around buying and selling cosmetics.
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Web3 games have been struggling lately, with a growing number shutting down due to low player counts and insufficient revenues.
Among these is Uncharted, the developer behind crypto-based game Fishing Frenzy, which announced that the two were shutting down today.
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