NFTs have a lot of critics, and rightfully so. While the technology can add a new level of digital ownership to virtual goods, the majority of NFTs amount to nothing more than digital lotto tickets. For the industry to grow and shed the stigma earned by all of the scams and fly-by-night cash grabs, we need to move past this lottery-like mentality. NFT creators still have a lot to learn about branding, scarcity, availability, and fun in order to gain wider adoption. To demonstrate exactly what I mean, let’s compare NFTs to one of the most popular collectibles on the market—Pokémon Cards.
Pokémon Cards Are Inclusive, Affordable, and Fun
Anyone who follows pop culture or trends on the internet can tell you, Pokémon cards have seen a huge uptick in popularity over the past several years. With graded holographic Charizards being worn around the neck of celebrities like jewelry (Logan Paul) and Twitch streams teeming with box openings, you can’t really miss it. The interesting thing about Pokémon cards, at least in terms of how they relate to NFTs, is how different their approach is. When it comes to things like availability, affordability, and the overall fun of it all, Pokémon has a lot to offer collectors.
If we look at data from PSA , one of the top grading companies in the world, there are over 1,000 holographic Charizards graded between a PSA8-10, all of which would be fairly good quality cards. Keep in mind, this is one of, if not the most sought after cards in the entire Pokémon card world. That rare holographic Charizard can sell for tens to hundreds of thousands of dollars. This puts them directly in line with the top tier of NFTs with regard to value.
The interesting thing is that you could have bought just one random pack to get one, and that pack only costs around $4.99-$6.99. This level of affordability makes Pokémon cards much more approachable than many NFTs that mint for hundreds (if not thousands) of dollars. Pokémon cards also have no requirements for mandatory participation, no exorbitant fees, or time limits to get one before they’re gone. If you want them, you just go ahead and buy them.
The level of availability makes them inclusive for all types of collectors without the barriers to entry that plague most NFT collections
All of these factors add up to an experience that is much more approachable by a larger number of collectors, and it makes it way easier to onboard new users. In fact, they sold 3.7 BILLION Pokémon cards just in 2020-2021. But it’s not just the mechanics of distribution that make them popular—Pokémon cards are also a collectible card game, and not a bad one at that. The utility of the collectible is baked in from the start.
While some people will of course keep the rarer cards safe from the wear and tear of the tournament scene for the sake of monetary value, many of the common cards are regularly used by players. This utility as a collectible as well as a fun card game to play with friends is something that most NFTs are just missing entirely.
NFTs are Exclusive, Expensive, and Boring
Speaking of NFTs, the contrast couldn’t be any more obvious. While both Pokémon cards and NFTs can be seen as collectibles, that’s about all they have in common. When it comes to the areas in which Pokémon cards really shine (like availability and affordability), NFTs go in the completely opposite direction.
Where Pokémon cards are an inclusive collectible, NFTs typically pride themselves on the exclusive nature of their brands. The problem with exclusivity is that it hurts growth potential. In fact, the average number of individual accounts holding the top NFT collections is somewhere between 3,500-4,500 collectors. Compare that to the millions of players who buy and collect Pokémon cards, and it’s not even close.
Now, we hear you, it’s not really fair to compare a mega-brand like Pokémon to anything—it’s simply in a class all its own. But just like any brand, it started at 0 and had to work to get to where it is today. As we mentioned previously, a pack of Pokémon cards is roughly $4.99. Do you think that Pokémon would be what it is today if those cards had cost $1,499 per pack? Or if you had to buy a membership VIP token for $999 to get access to view the cartoon? I think it’s safe to say the answer is a resounding “No.”
On the flip side of that, many NFT collections mint for hundreds, if not thousands, of dollars. This price tag simply isn’t reasonable for the vast majority of collectors out there, and it keeps them from even getting their foot in the door. Not only that, but the artificial scarcity used in NFT mints means that most collections have 10,000 or less total available collectibles, ensuring that many people, even if they CAN afford it, are left out of the initial launch and stuck trying to buy on the secondary market at already inflated prices.
The problem here is that the exclusive nature combined with the cost of admission equates to a monstrous barrier to entry for the majority of people. Not only that, but the culture is toxic (we discuss the problems with NFT culture in another article). This combination of toxicity and the strong barrier to entry keep the majority of collectors on the sidelines and really hurt the potential of the NFT market as a whole.
Which brings us to the nail in the coffin—utility. Most NFTs don’t have any. While Pokémon cards had a cartoon and toy line very early on to help promote the brand, along with video games and plenty of other merchandise, the cards themselves are also a game. This built-in element of fun brings a lot of value to the collections. NFTs, on the other hand, focus on idiotic value-propositions like staking, DeFi, and DAOs, which not only mean nothing to the average collector, but are generally seen as scammy and dangerous (which makes sense, because they are). Most tokenomics don’t favor collectors, and staking has no place in collectibles like NFTs.
The bottom line is that, once you get past the initial hype of the launch, most NFTs are simply boring. You buy it, you hold it, and there really isn’t much else going on. Which is fine if it’s an amazing piece of art from a popular artist that you can hang on your wall and guests can see. But when we’re talking about spending $3,000 for a cartoon image of a “dickbutt,” well, it just doesn’t hold the same kind of weight now, does it?
So Who Wins?
I think it was obvious from the start who the winner was going to be, but that doesn’t mean NFTs are dead or can’t improve over time. The exercise at the core of this article was examining what could be learned from top tier collectibles like Pokémon cards and drawing a clear distinction between their model and where we think NFTs get it wrong.
Nintendo is amazing at building brands. From Mario to Pokémon, they have more than a few characters who have become iconic across multiple generations. Even lesser known characters like Kirby have become huge franchises with games, toys, cartoons, and all kinds of merchandise with some pretty hefty sales numbers. The Pokémon franchise alone has an estimated lifetime sales of $100 billion . But that’s the thing—they focus on their brands, they make them approachable to everyone, and they make them fun.
The lesson here, in my opinion, is that by being more inclusive, making NFTs more available and affordable, and focusing on fun rather than the bottom line, the industry can appeal to a much broader audience and hopefully defeat some of the current stigma associated with the term. In many circles, NFT is already frowned upon because of the predatory tactics used by creators. Until we can get past the dollar signs and focus on building real, successful brands that are accessible to everyone, the industry will never see growth on the scale of Pokémon.
But hey, if we wait long enough, maybe Nintendo will just issue their own NFTs and show everyone how it’s done…
What do you think? Are Pokémon cards better collectibles than NFTs? Should NFT creators look at Nintendo and how they handle their brands for inspiration? Let us know your thoughts!