Pudgy Penguins Shuts Down Mobile Game After Millions in Losses

The Pudgy Penguins NFT project's mobile game, Pudgy Party, was launched in August last year but barely a year later, in June 2026, developers announced its shutdown. The game, initially touted as a flagship project, resulted in millions of dollars in losses for the company and would have incurred an additional $2.5 million in costs to maintain.

According to Lucas Netz, CEO of Pudgy Penguins, the game's failure was due to declining player engagement and lower-than-expected revenue. The game, which had a complex monetization system based on cosmetic items called 'skins,' saw some skins being sold for as much as $100,000, while their actual market value was often just a few cents.

Netz had earlier stated that the system could enable certain players to earn more than the minimum wage. However, the initial hype surrounding the game dissipated quickly, and by the time it shut down, only 200-300 daily active users remained.