Already the largest shoe company in the world, Nike just bought a new brand. This one doesn’t exist in physical reality, though.
On Monday, December 13, Nike Inc. announced the acquisition of virtual sneaker creator and collectible creator RTFKT. After opening Nikeland on Roblox just two weeks ago, this is the apparel giant’s second major move establishing its metaverse presence. The purpose of acquiring RTFKT is to give Nike a digital edge with “a leading brand that leverages cutting edge innovation to deliver next-generation collectibles that merge culture and gaming,” according to a statement on Nike.com.
“This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture,” Nike, Inc. president and CEO John Donahoe said in a statement.
This digital metamorphosis is Nike’s effort to get in on the Web3 era, a coming internet iteration that seeks to seize control from platforms like Google, Amazon, Facebook, and Twitter and replace these masters of the digital universe with user-controlled social networks, search engines, and marketplaces. Roblox, for example, allows users to program games and play games created by other users. By buying RTFKT, Nike aims to ensure a footprint in the new Web3 world.
“We’re acquiring a very talented team of creators with an authentic and connected brand. Our plan is to invest in the RTFKT brand, serve and grow their innovative and creative community and extend Nike’s digital footprint and capabilities,” Donahoe said.
Founded in 2019, RTFKT has surged during 2021’s NFT boom. NFTs, or ‘non-fungible tokens,’ allow users to buy and sell unique digital items tracked via blockchain. NFTs can include any digital objects — apparel, drawings, animated GIFs, songs, or video game collectibles. NFTs are usually rare, either be one-of-a-kind or one of a limited few, with owners verified by blockchain. Brandessence Market research cited 328% growth in NFT transactions during the first half and third quarters of 2021. Major players driving this expansion are Microsoft, Home Depot, Tesla, Whole Foods, and Starbucks.
In February, RTFKT released several collaborative virtual sneaker designs with online artist Fewocious. Six hundred pairs sold out in seven minutes, netting a cool $3.1 million. In March, RTFKT partnered with Atari on a limited edition Atari-themed virtual sneaker. And in November, RTFKT hooked up with digital artist Takashi Murakami to sell 20,000 3D avatars as part of its CloneX NFT fashion collection. Now Nike is in on the action.
Adding RTFKT to its portfolio opens an entirely new revenue stream and marketplace for the sportswear giant. There’s no indication of a philosophical change at RTFKT enforced by Nike. The plan is to continue to entice users to use Metamask wallets (secure crypto vaults that allow for blockchain-verified exchanges) to purchase NFT sneakers, designed by both RTFKT and Nike visionaries, that will appear in virtual worlds and games. For RTFKT’s part, the company is excited to now be funded by one of the big boys.
“This is a unique opportunity to build the RTFKT brand and we are excited to benefit from Nike’s foundational strength and expertise to build the communities we love,” RTFKT co-founder Benoit Pagotto said in a statement. “Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity, and community.”
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