Non-fungible tokens, or NFTs for short, are one of the most talked about trends in recent memory (aside from maybe the Metaverse). In essence, an NFT is an artwork that contains a unique digital certificate of ownership. We're not going to get into the nitty gritty of blockchain and cryptocurrency here, but all you need to know is that they form the foundations on which NFTs are built. Owning an NFT is like owning an original Rembrant, rather than owning a £1 postcard of The Night Watch. Collectability and ownership form the basis for most NFTs and that's why they are such an interesting development in the kids and family sector. If you're struggling to get a grip with the concept, why not take a look at this kid explaining them.
For decades now, young fans have fawned over collectables and rare items. NFTs have the unique ability to cater to these needs. They enable value on digital items through proof of ownership and scarcity. Think of the infamous "Fat Pikachu" or rocket firing Boba Fett, both valuable collectables fuelled by scarcity and demand. If you own a rocket firing Boba Fett, for example, you could keep it with your collection at home or you could choose to sell it (a recent one went for $150,000). While that's all well and good, physical collectables have their own downfalls. Firstly, they can become damaged, thus lowering the value. For example, the first issue of the Spider Man comic is worth a respectable $4,000+ when graded at a 2.0 by the CGC (the go to for comic book grading), but it's worth a whopping $130,000+ when graded at 9.0 or higher. Secondly, physical collectables leave themselves open to forgeries (see Logan Paul's $3.5 million acquisition of fake Pokémon cards). NFTs, on the other hand, manage to avoid such pitfalls. Every NFT can be traced back to the owner, while also proving scarcity and authenticity.
So how can kids and family brands get involved? LOL Surprise, the brand known for its dolls and unique "unboxing" selling point, have developed digital trading card NFTs. The company has made three categories of card; common, rare and ultra-rare. Each card can connect the owner to an immersive digital experience, where they can trade and discover new cards to unlock. NFTs can create a sense of community within a fan base through trading and comparing sets and LOL Surprise have locked in to exactly that. While some of the giants of collectables (e.g. Pokémon and Beyblade) haven't launched anything yet, many other kids companies are trying their hand at these new digital assets. TIME Studios are in the process of developing a kids TV show based around NFTs created by Pablo Stanley. Funko Pop, the creators of the big headed pop culture figurines, have started to create digital editions of their collectables to be sold as NFTs (much to the irritation of some journalists). They even went so far as to create a Funk Pop NFT of revered television artist, Bob Ross.
The hesitation from some companies to enter into the world of NFTs, might be in part due to their environmental impact. Toy companies could be waiting until more energy efficient ways emerge. Regardless, NFTs offer kids and family companies an opportunity to engage with their audiences like never before. Gone are the days of getting scammed for knock-off pogs, digital authentication is now here. Young people are already making the most of it, with a twelve year-old in the UK making an impressive £290,000 off NFTs based on a pixelated image of a whale. We look forward to seeing how (if at all) NFT technology is integrated into the kidsphere. The opportunities are there, we just need to wait and see how they are utilised.