Nike announced its first substantial foray into the metaverse yesterday (Dec. 13) with the purchase of RTFKT (pronounced “artifact,” of course), a non-fungible token (NFT) studio that produces digital collectibles, including virtual sneakers. They did not disclose the value of the deal.
“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,” said Nike president John Donahoe. Nike last indicated it was getting into the metaverse in November, when it quietly filed over half a dozen of its signature trademarks with the US Patent and Trademark Office (USPTO) “for use online and in online virtual worlds.”
With the acquisition of RTFKT, Nike is one step closer to offering goods emblazoned with its signature swoosh to online communities. The opportunity looks lucrative—while RTFKT has only been around since 2020, it’s already raked in millions of dollars for virtual sneakers.
What is RTFKT?
Benoit Pagotto, Chris Le, and Steven Vasilev launched RTFKT in January 2020. Prior to offering their digital products to the wider public, the studio was an undefined collective that produced designs and concepts for gaming companies and a few select fashion brands, according to its website.
Since the brand launched nearly two years ago, RTFKT’s projects have attracted quite a bit of attention. In February the studio released a series of rainbow-colored virtual sneakers as NFTs with the artist Fewocious. The studio sold 621 pairs through cryptocurrency purchases, bringing in a total of $3.1 million. Their hype soon migrated to the secondary market, where the digital sneakers were selling for double their launch price a few weeks later.
While RTFKT does offer some physical products, co-founder Pagatto has said they take cues from the gaming community and are most interested in serving these customers, as well as cryptocurrency investors with digital currency to burn. “These days, the new generations are used to demanding interactivity, and we think that one of the utilities is status and rarity, so you will want to display it,” Pagatto told the trade publication Jing Daily.
Nike’s shift to digital worlds is inevitable
Even before Facebook announced it would rebrand as Meta and accelerate its shift to the metaverse, it seemed inevitable that fashion brands would go that direction. In purchasing NFTs, consumers buy a unique digital asset that can’t be copied or found anywhere else, not unlike a pair of Virgil van Dijk’s game-worn Nike cleats.
Fashion brands have the potential to sell NFTs in exchange for both original and physical goods, LVMH’s former chief digital officer Ian Rogers said at a conference on fashion and technology in March. “There’s no reason that today you couldn’t buy a bag, get an NFT,” he explained.
Nike started thinking about NFTs as far back as 2019, when the footwear giant received a patent for blockchain-compatible sneakers known as “CryptoKicks.” The idea behind the patent is to give buyers a digital version of the physical shoes they purchase, which is then stored in a cryptocurrency wallet called a “digital locker.” In purchasing RTFKT, Nike looks to be one step closer to delivering on this vision of its metaverse.