How Mattel built an NFT marketplace and generated millions in revenue with Magic

#Introduction

Mattel is leading the way in how Fortune 500 brands engage customers with digital collectibles. As the foremost creator of collectible toy brands (including Hot Wheels and Barbie), Mattel quickly identified the value of virtual collectibles and how they fit into their core brand. Mattel was the first toy company to launch virtual collectibles, powered by Rarible on the Flow blockchain, and continues to expand digital collectibles and experiences for their customers. Previous Mattel virtual collectibles projects include: Hot Wheels NFT Garage, Barbie’s collection in collaboration with fashion house Balmain, Cryptoys x Masters of the Universe, and Barbie x Boss Beauties.

An innovator who has been revolutionizing the toy and collectibles industry, Mattel recognized early on the potential of virtual collectibles to strengthen and expand their brand and wanted to enable customers to easily buy, sell, and trade virtual collectibles, redeem them for rare physical items and access token-gated drops of physical exclusives. However, for this strategy to work, every customer needed a web3 wallet for their digital assets. 

Enter Magic. 

Magic provided instant web3 wallets for Mattel's users, making user onboarding frictionless, secure, and non-custodial.

“Magic's wallet infrastructure played a critical role in the success of Mattel’s digital collectible marketplace. Their white-label wallet SDK seamlessly integrated with Mattel’s platform and helped us build a frictionless, user-friendly onboarding experience for mainstream audiences”, said Sara Govindarajan, Head of Engineering. “Thanks to Magic, we were able to offer a best-in-class virtual collectibles experience to Mattel fans and collectors, resulting in our Hot Wheels NFTs selling out in less than 30 minutes.”

#Challenge: Web3 onboarding for new users

For typical consumers, creating a web3 wallet can be difficult and onboarding to the web3 ecosystem can be a complex, lengthy process, particularly for new users. This poses a significant barrier to entry, preventing broader adoption. Brands that send their users to 3rd-party domains or require downloads and seed phrases repeatedly fail to convert customers beyond established web3 enthusiasts. Mattel cares foremost about preserving their global brand and upholding excellent user experience and wanted a solution that was easy to use and secure for their users.

#Solution: Instant web3 wallets for a seamless purchase experience

Magic offers a white-label wallet-as-a-service (WaaS) that enables a more streamlined and user-friendly onboarding experience. Our wallet-as-a-service solution abstracts away the complexities of crypto wallets and removes the need for seed phrases, browser extensions, or app downloads, thus making the experience indistinguishable from standard web2 login flows that everyday users are accustomed to. Magic’s WaaS also provides enterprise-grade security for digital assets and is SOC2 Type 2, GDPR, CCPA, ISO, HIPAA compliant. Magic’s patented Delegated Key Management System (DKMS) ensures that private keys are encrypted and secured, and only end users can access their assets.

Because Magic works with any identity provider, including custom authentication systems built in-house, Mattel was able to white-label and reduce the wallet generation experience to a single click. Designed specifically for mainstream consumers - who are less likely to understand web3 and blockchain technology - the Mattel Creations Digital Collectibles Marketplace does not require users to own cryptocurrency to make purchases. Making Mattel’s innovative virtual collectible offering accessible to the mainstream consumer was the right choice as Mattel sold out of their limited edition virtual collectibles within hours. Magic and Mattel delivered a seamless web3 experience to their web2 customers. 

#Results: Millions in revenue

Magic's expertise in secure, web3 onboarding in combination with Mattel’s deep understanding of the value of collectibles and their dedicated brand loyalists, produced a one-of-a-kind experience for customers. Mattel was able to launch their own virtual collectibles marketplace on Mattel Creations, the company's collector and direct-to-consumer platform. The marketplace is built on the Flow blockchain, a fast, decentralized, and eco-friendly blockchain designed to support consumer-scale decentralized applications serving mainstream audiences. 

Almost 40,000 wallets were created by Magic across just two drops:

• Dec 2022: Series 4 of the Hot Wheels NFT Garage was the first offering of Mattel Digital Collectibles to launch on the new marketplace. 30,000 packs (each pack sold for $25) sold in less than 12 hours and included seven Hot Wheels NFTs of varying rarities.

• Apr 2023: The platform introduced its own peer-to-peer marketplace, allowing owners of Mattel virtual collectibles to display, trade, and sell their assets. To coincide with the update, Mattel released Series 5 of the Hot Wheels® NFT Garage. Series 5 sold through 35,000 packs and sold out in 30 minutes (the company’s largest drop to date).

Since these two drops, Mattel has launched numerous more throughout the year, driving multi-millions in revenue. With the success of its Hot Wheels series, Mattel is continuing to explore and expand in digital collectibles with other brands and experiences. And because the new, easy-to-naviagate marketplace is powered by Rarible, customers can get the bost of both traditional collectibles and Web3 worlds! We’re excited to see what new innovations Mattel has planned next for collectors and fans.