Nike's metaverse includes NFT shoes for a virtual world
After spending part of 2021 taking shoe customizers to court, Nike is spending its final months of the year staking a claim in the emerging metaverse.
In October, the sporting goods giant filed trademarks with the U.S. patent office to sell branded sneakers in a virtual world. Last month, the company launched an online game zone on Roblox called Nikeland where fans can create an avatar of themselves and play sports in a virtual space. In its latest foray, Nike said Monday it has acquired digital collectibles company RTFKT Studios, which will allow the retailer to sell virtual sneakers that people can use to outfit their online avatars.
"Brands have an incentive to be there because that's where people are and they want to follow them," Michael Pachter, an analyst with Wedbush Securities, said of the move by major retailers to start building their presence in the metaverse.
But what is the metaverse, exactly? In general, it describes a network of augmented and virtual reality hubs accessed via smartphones or headsets. Users can also create a digital stand-in to represent them in the virtual world, customizing their avatar for work and play using hats, sunglasses and now even Nike-branded sneakers.
The market for transactions in the metaverse is expected to reach $6.1 billion this year and nearly $42 billion globally by 2026, according to research firm Strategy Analytics. In Nikeland, users can customize their look, display collectibles in a digital showroom and play games.
RTFKT Studios makes non-fungible tokens of sneakers, among other things. Non-fungible tokens are virtual items that use blockchain technology and smart contracts to assure each item, or asset, is unique and unchangeable. The sneaker NFTs are not tangible items that customers can wear, say, to a grocery store or hair salon in real life. Instead, the shoes will go on the feet of an avatar that walks around a virtual world, such as Nikeland.
RTFKT, pronounced "artifact," was launched in 2020 and made a splash in March when it sold out of a line of real sneakers paired with NFTs in seven minutes and made $3.1 million in the process. "Since we started, we always looked up to Nike with the goal to create the Nike born on the Metaverse," RTFKT co-founder Benoit Pagotto tweeted after the acquisition was announced.
Nike did not disclose how much it paid for the studio. In a statement, Nike CEO John Donahoe called the purchase another step "to serve athletes and creators at the intersection of sport, creativity, gaming and culture."
It's unclear what specific plans Nike has for its new NFT arm, but Pachter speculated on one possibility: Letting users who bought a new pair of Nikes scan a QR code using their mobile phone so the shoes can be displayed on their avatar in Fortnite or other apps.