NIKE made a huge announcement this morning, one that points to the company’s interest in the metaverse. According to this press release, the company has acquired RTFKT, a company that it says is “a leading brand that leverages cutting edge innovation to deliver next generation collectibles that merge culture and gaming. 

What’s that mean?

RTFKT is another sneaker maker, but not the type you would think. Unlike NIKE, the sneakers made by RTFKT can’t be held, worn, or even displayed in a showcase in your home. Nope, these sneakers are 100% virtual, and are sold as non-fungible tokens or NFTs. 

NIKE Acquires RTFKT

As mentioned above, NIKE announced this morning that it has acquired RTFKT, a digital sneaker manufacturer that creates NFTs featuring collectible digital sneakers. In fact, back in February, it collaborated with a teenage artist known as FEWOCiOUS, making a big splash when it did. 

The two teamed up to sell real sneakers that were paired with virtual sneakers. The collection was a hit, with the entire collection, around 600 pairs of shoes and accompanying NFTs, selling in just six minutes. That brought in over $3.1 million in net proceeds for the company and the artist. 

While the company has already made a smash hit, and grabbed the attention of NIKE enough to get the massive brand to stroke what was likely a massive check, it’s actually relatively new. In fact, RTFKT was founded by Benoit Pagotto, Chris Le, and Steven Vasilev in 2020. 

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Its claim to fame is leveraging game engines, NFTs, blockchain authentication, and augmented reality to create one of a kind virtual products and experiences, and it has done a great job of doing so thus far. 

So, what were the terms of the transaction? Unfortunately, that’s a question the world will never know the answer to. In the press release, NIKE said the terms of the agreement would not be disclosed. However, considering the overwhelming popularity of NFTs and massive amounts of money RTFKT has already made, I’m sure the amount paid in the acquisition was hefty. 

Management Commentary

In a statement, John Donahoe, President and CEO at NIKE, had the following to offer:

“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. 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.”  

The above statement was followed up by Benoit Pagotto, one of the co-founders of RTFKT. Here’s what he had to say:

“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. Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity and community, and we’re excited to grow our brand which was fully formed in the metaverse.”

The Bottom Line

The bottom line here is simple. NFTs aren’t just about a bunch of gamers getting together creating digital images. The metaverse is becoming a massive concept that has real potential to drive revenue for real brands. So much potential that brands like NIKE are making big moves to dive into the industry. 

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