Here’s why a multi-million toy business is venturing into the metaverse
When Jackson Aw was introduced to blockchain technology in 2018, he “didn’t get it at all.”
“Can someone dumb it down even further for me? Like, can you just tell me what I can get as a consumer?”
That was four years ago. Today, Aw, seems to have the answer to that question.
The 32-year-old Singaporean, who runs Mighty Jaxx — a multi-million dollar toy company that produces collectibles and lifestyle products — has incorporated blockchain into his products.
A blockchain is a decentralized digital ledger that records every transaction that has taken place. It also cannot be tampered with or changed retroactively.
CNBC Make It finds out why it “makes sense” for the collectibles empire to tap into blockchain capabilities, and bet on the metaverse.
Mighty Jaxx, which was founded in 2012, has partnered with some of the biggest global brands and visual artists, producing trendy collectibles that incorporate pop culture and design.
Aw said the company has since sold millions of toy collectibles to people in more than 80 countries.
Mighty Jaxx’s limited-edition collectibles can cost up to $1,200 on its website, but in the secondary marketplace they can fetch “five to ten times” more than its original value, said Aw.
But there is one problem.
“When you want to sell the product, the number one question everywhere is ‘Is it authentic?'”
Aw added: “For collectibles, what [sellers] do is that they take photos of the figurine and post it on Facebook groups, asking people to do an authenticity check.”
However, Aw was not satisfied with this method of authentication.
“Whose word is it on? Where’s the provenance of it? So we thought, okay, that’s what we need.”
Mighty Jaxx designed a near-field communication chip and embedded one into each toy. NFC technology enables short-range, wireless communication between two devices.
“With our app, you can [scan the chip], register your ownership of the item [to show] it’s an authentic Mighty Jaxx product,” Aw said.
Powered by blockchain, the platform issues and validates unique, tamperproof certificates for every product. It also provides a digital footprint when ownership of an item changes.
“If Jay Chou or JJ Lin owned that figurine prior to you, that is definitely far more valuable than me owning it,” Aw jokes. Jay Chou and JJ Lin are popular Mandarin pop singers.
Providing reliable authentication through blockchain technology is just “the beginning” for Mighty Jaxx.
A ‘phygital’ edge
With the nonfungible token market seeing explosive growth in 2021, Aw said that was when there was “a change in culture as we knew it.”
“[Being] artists and creators in general … has always been more of a service-based work. But now it flipped. Now, content and intellectual property is key, because without any of this [visual] representation, that technology does nothing,” Aw explained.
“Nothing speaks louder than visual form.”
NFTs are crypto-based digital assets that also function like collectibles — something that Mighty Jaxx is no stranger to.
Hence, it “makes sense” for Aw to venture into the space, by offering fans exclusive digital experiences with physical collectibles.
“When you buy our NFTs, you get access and the opportunity to purchase the physical manifestation of it in that design. So only this bunch of people would be able to purchase this figure,” said Aw.
“Because only they could do it and they can combine both asset classes together, it generates even higher value for them.”
Aw believes that is Mighty Jaxx’s “phygital” edge over its competitors — being able to offer both digital and physical assets.
“The fact that we create digital assets before we produce the physical toys … means that we can go to market quicker as well,” he added.
“I can’t think of, you know, 10 other companies doing that in the whole world, simply because the work that goes into creating a hardware or a [physical] collectible, it’s naturally just a steeper learning curve.”
In 2021, Mighty Jaxx launched its first collection of NFT trading cards, featuring cats that look like the Chinese cuisine, dim sum.
“We launched 6,000 units, within … two seconds, they were just sold out,” Aw said.
Mighty Jaxx got its big break with DC Comics by scoring a licensing partnership in 2015, allowing it to “restyle” the creative intellectual property.
Since then, it has partnered with renowned brands to reach fandoms all around the world, from Adidas, Hasbro and Nickelodeon, to Formula 1, Sesame Street and Netflix.
Aw says “there’s a lot more work to be done,” with plans to expand its IP collaborations into the metaverse as well.
The metaverse is a set of virtual worlds where people live, work and play.