The athletic apparel company filed seven patents in November of last year, revealing its intentions to produce and market virtual footwear and clothing. Nikeland, a Roblox universe with online games and virtual goods, was introduced a few days later. It acquired RTFKT (also spelled “artifact”), a non-fungible token (NFT) studio that creates digital collectibles like virtual sneakers, in December.
Nikeland attracted seven million visitors five months after it opened. Nike’s acquisition of RTFKT is now yielding millions of dollars.
When the shoe company reports its profits tomorrow (Sept. 29) after market close, will these digital triumphs be sufficient to stop the stock decline?
Nike shares have been sinking all year
Nike’s revenues between December 2021 and February 2022 increased 5% year over year to $10.9 billion thanks to strong direct sales. However, as supply bottlenecks plagued the company in the ensuing quarter, revenues dropped 1% to about $12 billion compared to the same period the previous year, and the company revised its guidance.
Profiteering in the Metaverse
Online sales are showing some promise as traditional sales are shaky.
Nike Digital, which includes the company’s forays into the metaverse, was already bringing in a quarter of its revenue by March, a significant increase from 10% three years ago.
In fact, according to August data from Dune Analytics, Nike is the NFT brand with the highest earnings. Even though Nike’s competitor Adidas registered more than 50,000 NFT transactions as opposed to Nike’s 67,000+, Adidas’ earnings fell short of a tenth of Nike’s NFT revenue.
Despite being impressive, Nike’s total revenue of $185 million is a drop in the bucket. Nike generates more than $12 billion in revenue every quarter, even in a bad year. However, Nike might stand to gain more as the global metaverse market expands—it’s expected to reach $41 billion in five years.
NFT shoes are popular with Nike
Nike released 20,000 “Cryptokicks” NFTs in April, and each pair sold for between $7,500 and $9,000. One of them—by contemporary Japanese artist Takashi Murakami—sold for an astounding $134,000 dollars.