Why did Nike buy a crypto collectables studio?
Nike said on Monday that it acquired RTFKT, a London-based studio for non-fungible tokens (NFTs), in another sign that management believes the metaverse will be about much more than engaging with online gamers.
RTFKT (pronounced “artifact”), founded in 2020, has quickly become known for NFT partnerships with crypto artists that quickly sell out. Some virtual sneakers sell for up to $10,000 a pair. NFTs, utilizing blockchain technology to verify authenticity and ownership, can be traded, sold or worn by digital avatars on social media and in virtual reality.
Nike in recent months has applied for several trademarks for “downloadable virtual goods” and became one of the first brands to create a virtual world on the Roblox online gaming platform. The brand recently established a goal to have owned digital reach 40 percent of sales by 2025, up from 25 percent currently.
“This acquisition is another step that accelerates Nike’s digital transformation,” said Nike’s CEO John Donahoe in the statement.
In a note, Piper Sandler’s Erinn Murphy said the RTFKT acquisition could be a major revenue opportunity “if Nike is able to somehow connect the digital and physical realms and successfully tie their most collectible and rare sneakers to NFTs, which allow for royalty structures to provide recurring revenue in the aftermarket — especially with the growth of sneakers as social currency as spotlighted by the immense and accelerating popularity of rare Jordan silhouettes on secondary market platforms.”
Adidas, Vans, Ralph Lauren, Gucci and Burberry are among other fashion behemoths exploring the alternate reality space.
In a note from early December, BTIG analyst Camilo Lyon predicted continued strong interest in NFTs within fashion in 2022. He wrote, “Ownership in fashion apparel or sneakers, like in the art world, would create the ability to port that purchased good from platform to platform or on social media with the intent of personalizing your style in the metaverse. What’s more, we believe brands are on the path to marrying the digital sale with a physical sale of the same goods, which would have the benefit of cementing an experiential connection between brand and consumer in a new and unique way with ownership qualities.”
- NIKE, Inc. Acquires RTFKT – Nike
- NIKE, inc (NKE) Q1 2022 Earnings Call Transcript – The Motley Fool
- With Rtfkt acquisition, Nike invests in the metaverse – Vogue Business
- Nike acquires NFT collectibles studio RTFKT – TechCrunch
- Nike buys virtual sneaker maker RTFKT – whose digital shoes fetch up to $10,000 a PAIR – for undisclosed sum to make wearable NFTs in the metaverse – Daily Mail
- Nike just bought a virtual shoe company that makes NFTs and sneakers ‘for the metaverse’ – The Verge
- Will fans visit Nike in the metaverse? – RetailWire
- Is retail ready to enter the metaverse? – RetailWire
DISCUSSION QUESTIONS: What do you think is behind Nike’s acquisition of RTFKT? Where do you see the retail opportunities with NFTs and the metaverse?