It has been the year of mergers, acquisitions, and eyebrow-raising collaborations. Both formally in the business sense, and more philosophically. To name but a few: Kering picked up its stake in GOAT, eBay absorbed Sneakercon, Gucci and Balenciaga gave us their “hacked” collections, and two historic Italian houses came together for the first time to give us FENDACE. Once-clear lines have been worn away or, perhaps, we’re just now seeing how flexible those borders have always been.
Taking these flashpoints into account, the news yesterday that Nike has officially acquired the NFT sneaker brand RTFKT isn’t all that surprising. Another day, another buy-out, right? Well, yes and no. True: at a base level, what we’re looking at here is just another example of a smaller brand with a clear-cut USP being scooped up by a much bigger name with a view to getting in on a new game without having to start from the bottom. Not dissimilar, in that sense, to the aforementioned eBay acquisition. In other ways, however, it’s entirely different — and groundbreaking.
What Nike’s acquisition of RTFKT represents is a merger not of brands but of worlds — of realities. It’s a blurring of the evermore porous membrane between the virtual and the tangible. That is a massive deal.
Over the course of its history, Nike has built its reputation on both style and substance. Where the style element comes from is obvious, but when it comes to substance, the devil is in the technical details. Often, it’s engineering that sets Nike apart from its competitors; the innovative use of forward-thinking materials and the practical applications of its footwear and apparel in pushing the boundaries of athletic possibility. In short: very real, very tangible things.
Nike isn’t the first brand to make forays into the NFT, Augmented Reality, video game, or metaverse sphere. Gucci launched a virtual-only sneaker in collaboration with the AR platform Wanna earlier this year for a surprisingly democratic $12, while Balenciaga even went so far as releasing a full-on capsule collection with Fortnite back in September that combined both in-game skins with “v-bucks” price points and real-world apparel and accessories (with somewhat less affordable $700-plus tags).
Elsewhere, in November, the British Fashion Council launched a new category at its annual awards in London. In partnership with Roblox, presented by Gucci’s Alessandro Michele, and taken home this year by digital creative cSapphire, this new honor was dedicated to the concept of “Metaverse Design.” Which, if nothing else, amounts to official recognition.
And, of course, just a few weeks ago, adidas — Nike’s ever-present rival — made its own steps into The Metaverse in partnership with much-hyped NFT proprietors Bored Ape Yacht Club. That move will not have gone unnoticed across the Atlantic at Nike HQ.
Still, Nike’s acquisition is different. It’s not just a knee-jerk reaction to the movement of an old enemy (in large part because acquisitions like this take time). It's a sign of things to come.
The value of the deal, which isn’t public knowledge but is likely high when considering the kind of money RTFKT has been raking in through 2021, isn’t really the news. The real headline is that where competitors and adjacent brands have made tentative steps toward working with blockchain — usually in collaboration with a more experienced partner, ready to hold their hand, guide them through, and ultimately do most of the heavy lifting — Nike has jumped in at the deep end. In acquiring RTFKT and truly becoming a full-time player in the game, the company has effectively posted its intent to make NFT/Metaverse design a priority.
It’s a savvy move. The deal legitimizes the technology in a kind of self-fulfilling prophecy. Nike saw something in RTFKT, but only with Nike’s involvement does that something gain the kind of mass appeal that justifies the purchase. NFTs, while undoubtedly all the rage in online communities, with billionaires and crypto bros, are still a niche concept. Non-fungible sneakers, even more so.
This move has the potential to catapult them into the mainstream and, at the same time, gives Nike the infrastructure to capitalize on that shift. Nonetheless, there are questions about what this does to Nike’s brand moving forward and what it means for the future of its world-leading design. RTFKT’s principal attraction is that the “sneakers” they sell are essentially impossible designs. They cannot, at least not presently anyway, be made in the real world.
On one hand, that’s cool. It gives the boys in the design and engineering departments at Nike free rein to play with ideas that have previously been beyond their limits. That open-mindedness and boundless sense of scope may well have a knock-on effect on the possibilities of real-world design. It may, in the short-term at least, also have people asking why their NFT sneakers are more creative than the silhouettes they pump out on the earth-bound production line. Or, more problematically, why Nike is investing so much of its energy in what amounts to virtual trinkets for rich kids when its core base can very much be boiled down to “people who wear sneakers.”
There’s also the question of why RTFKT would sell right now. Granted, Nike money is hard to resist. On top of that, if the deal allows them to retain any sense of self, then being able to continue their work with the backing of Nike infrastructure seems like a no-brainer.
RTFKT has gone from strength to strength in its relatively short trading history; frequently claiming to generate millions of dollars in sales of its NFT sneakers ($3.1 million in seven minutes, for one release back in March). So, if they’re selling now, you have to wonder why. The presence of major brands in the NFT sphere may well serve to legitimize the form in the popular imagination, but it also breeds prolificacy and potentially democracy. That could mean a lower value for their items. In which case, selling to a big-name brand before others wade in to spoil the exclusive party makes a lot of sense.
Of course, it could also be because — as early adopters and innovators — RTFKT knows that, while the potential for design may be limitless, the potential for infinitely-increasing value and scale is not. All bubbles are destined to burst, and NFTs are likely no different on that front; the value is built on something that most people don’t understand, based on the assumption that someone out there knows what they’re doing in terms of blockchain purchases and sales. Just like the stock market or the housing market or the dot com market, it’s all good until it isn’t.
How things turn out is very much up in the air, of course. For now, at least, the NFT market is an attractive prospect and a chance to make a noteworthy stamp on The Metaverse in what still feels like its infancy. Brands that have the capability to do so, whether through collaboration or acquisition, should try to leave their digital mark. They just shouldn’t lose sight of reality. Whatever that means at this point.
