Disney Pinnacle is preparing to be the next big NFT failure

2

Image: Dapper Labs

NFTs aren’t gone yet — Disney will launch an “all-new socially driven collectible experience” called Disney Pinnacle later this year, turning characters from Pixar, Star Wars, and its classic animated films into tradable digital pins. The Disney Pinnacle website has a waitlist for interested traders and collectors; however, it doesn’t explain what the “digital pins” are actually like or why the company would bother to create a verifiable digital hoard.

While announcing Pinnacle, Disney and its partner Dapper Labs won’t even say the word “NFT.” Dapper Labs still calls itself “the NFT company,” but between a variety of scams, an eye-blistering episode at a recent Bored Ape event, and a market that has plunged since peaking in early 2021, that’s a term they apparently will steer clear of. The only thing available on the site right now is a privacy policy that makes clear this is a Dapper Labs effort that’s licensing content from Disney — not an in-house effort on the level of Disney Plus.

The NFT collection is being launched through an iOS app, and a spokesperson tells CoinDesk that web and Android applications will come later. Even without any appreciable details beyond a simple animation of the pins spinning around, there are reasons to believe Dapper Labs can get things off to a good start — it did that with NBA Top Shot in 2020 as well as with earlier projects like CryptoKitties.

However, anyone thinking about buying in should remember the history of Dapper’s previous projects. In 2017, flipping CryptoKitties was hot, with millions of dollars in sales. Now, CryptoKitties is remembered for its “spectacular fall,” while a channel for interested buyers in its official Discord has had messages from three people since September.

Dapper Labs followed that up with NBA Top Shot in 2020, replacing the cat artwork with “moments” collectibles commemorating players and highlights that appeal to basketball fans. Data from CryptoSlam shows the market peaked in February 2021 with over $220 million in sales, just before it broke 165,000 unique sellers. Top Shot hasn’t broken $2 million in monthly sales since the start of the current NBA season, there are fewer than 10,000 active sellers, and many people who bought into the hype aren’t happy with how things turned out.

Dapper Labs and its CEO, Roham Gharegozlou, are also facing a lawsuit accusing Top Shot of selling unregistered securities.

A similar effort with the NFL never reached those lofty heights, as NFL All Day NFT activity peaked with around 54,000 owners in the fall of 2022. The most recent data shows fewer than 1,000 owners are currently active.

A press release announcing Disney Pinnacle didn’t mention financial terms, but Disney’s IP can’t be cheap. This news was also revealed on the same day the ESPN Bet gambling operation is launching, with Penn Entertainment scheduled to pay Disney $1.5 billion over 10 years for a partnership that includes licensing the name of its sports channel.