Between December 2021 and February 2022, Nike’s revenues climbed up 5% year-on-year to $10.9 billion on the back of solid direct sales. But the next quarter, revenues fell 1% to around $12 billion compared to the year prior as supply bottlenecks plagued the company, and it reeled back its guidance.

The sneaker maker is still facing a number of persistent problems affecting its stock price:

🇨🇳 Volatility in the Chinese market has caused revenues in the region to fall almost 20% last quarter, and factory closures are squeezing supply;

🇺🇸 Too much shoe inventory in the US is creating an oversupply crisis;

🇪🇺 Weaker currencies in Europe translate into fewer dollars earned.

Profiteering in the Metaverse

As offline sales teeter, the online world shows some promise.

Already by March, Nike Digital, which includes the brand’s metaverse forays, was pulling in a quarter of its revenue, up a lot from 10% three years ago.

In fact, Nike is the highest-earning brand in the NFT business, August data from Dune Analytics revealed. Even when rival Adidas clocked over 50,000 NFT transactions compared to Nike’s 67,000-plus, its earnings didn’t even reach a tenth of Nike’s NFT revenue.

While impressive, $185 million is a drop in the ocean that is Nike’s total revenue. Even in a not-so-good year, Nike is making over $12 billion each quarter. But as the global metaverse market grows—it’s poised to reach $41 billion in five years—Nike may stand to gain more.

Nike gets a kick out of NFT sneakers

In April, Nike launched 20,000 “Cryptokicks” NFTs, which sold for $7,500-9,000 each. One of them, by Japanese contemporary artist Takashi Murakami, sold for a whopping $134,000.

And it’s no fleeting fad. Nike had the patent for blockchain-based sneakers since 2019.

Related stories

🚶 All signs point to Nike walking into the metaverse

👀 Nike’s purchase of RTFKT hints at what its metaverse will look like

🧭 Investments in the metaverse are coming with important strings attached

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.