This promoted content is produced by a publishing partner of Open Mic. A paid-for membership product for partners of The Drum to self-publish their news, opinions and insights on thedrum.com - Find out more
How Nike and adidas forged different paths into the metaverse
January 6, 2022
Image credit: adidas Originals
As 2021 came to a close, global brands made a flurry of moves into the metaverse. In particular, two of the world’s most eminent sportswear, footwear and fashion brands, Nike and adidas, activated their metaverse and Web3 strategies.
That they did so is interesting. Just how they did so is fascinating, with two quite different approaches. Arguably, adidas forged a more community-driven path by partnering with a series of established companies and communities in the Web3 metaverse space. Nike initially focused on the Web2 metaverse platform Roblox, before diving into Web3 with the acquisition of the well-known digital apparel company, RTFKT
Why is this distinction between Web2 and Web3 important for brands’ metaverse strategies? In essence, Web2 is the current version of the internet we are all intimately familiar with, where metaverse platforms such as Roblox and Fortnite offer huge opportunities for brands. Web3 refers to the next phase of the internet which is decentralised rather than centred around a small number of leading tech platforms. It’s here that the relationship between brands and their audiences will truly be enhanced and redefined.
Only time will tell whether adidas or Nike offers the more effective blueprint for brands looking to engage their audiences in the metaverse. One thing is already clear: even global powerhouses with huge resources recognise the value of engaging with existing creator communities, rather than attempting to build the metaverse in their own image.
Roblox: an ideal starting point for brands
Nike initially headlined the late-2021 metaverse rush by releasing Nikeland on Roblox. It’s a hugely impressive persistent virtual world with experiences, minigames and apparel. Nike is in good company here, as brands such as Vans, Chipotle, Gucci and Hyundai have all created perpetual worlds, games or limited-time experiences on Roblox. Nike itself created a Roblox experience back in 2019. So, while amazing, it wasn’t a ground-breaking step.
As a proprietary platform, Roblox is what is commonly referred to as a walled garden. It is fuelled by creators, but those creators can use only the tools offered by Roblox to build and make money from the content they create. Built on ‘legacy’ Web2 technology and with established routes for brand partnerships, Roblox is clearly an ideal creative sandbox for brands to try out ways of engaging and adding value to their audiences.
Entering the decentralized metaverse
While partnering with a single tech platform such as Roblox is familiar and straightforward, Web3 platforms are decentralized – meaning they’re effectively owned by their users. This means brands must work closely with communities of fiercely passionate virtual landowners and content creators, and puts the onus on those brands to maximize their creativity to add value to their audiences.
While there are examples of brands successfully experimenting in Web3 ecosystems like Somnium Space, Decentraland and the Sandbox, adidas and Nike are in largely uncharted territory as they look to set the standard for brands in the metaverse.
adidas in the Web3 metaverse
That’s why adidas in particular pursued a softly-softly-catchy-apey strategy aimed mainly at enriching existing projects. The sportswear giant initially purchased Bored Ape Yacht Club (BAYC) NFT #8774 in September 2021, something that any (admittedly high net worth) individual could do. BAYC is probably the best-known collection of NFTs out there. Counting the likes of Steph Curry and Jimmy Fallon as owners, they have been on the cover of Rolling Stone, signed as artists by Universal Music Group, and act as a token to an exclusive membership organization.
As BAYC owners have commercial rights, adidas used #8774 to create an original character called Indigo Herz before, in December, announcing a formal partnership with BAYC, Gmoney and the creators of the Punks Comics. This collaborative NFT drop netted around $23 million and is already the second most-traded collection on the biggest NFT marketplace OpenSea (though it was plagued by technical hitches).
Further enhancing its Web3 credentials, adidas has purchased land in the Sandbox to build AdiVerse - think of it as a decentralized rival to Nikeland. The aforementioned NFTs will serve as access tokens for virtual merch in AdiVerse, so holders can kit out their Sandbox avatars in unique apparel. The company has also announced a tie-in with cryptocurrency exchange Coinbase, although the details are as yet unknown.
Nike in the Web3 metaverse
While adidas drew all the plaudits in early December, Nike was hard at work on its Web3 strategy in the background. Having already filed several patents for virtual merchandise itself, Nike was on the verge of acquiring RTFKT.
Credit: NZXT / RTFKT
Rubber-stamped on the 13th of December, the deal instantly put Nike in charge of the leading creator of virtual sneakers in the metaverse as well as the co-creator of the most-traded NFT collection on OpenSea (ahead of adidas’s BAYC drop). Depending on how Nike wields its new Web3 power, this move could come to be seen as a masterstroke or a clumsy misstep.
If Nike chooses to let RTFKT continue to take a creative lead in the metaverse while making manufacturing resources available to it, it is much more likely to be a masterstroke. In doing so, Nike and RTFKT would set the standard for blending virtual and physical apparel, combining exclusive virtual wearables with real-world counterparts. On the other hand, by folding RTFKT into the parent brand, Nike could steamroll a successful metaverse creator with a devoted community. While it may not have been quite as creative as adidas thus far, I expect Nike is far too savvy to do this.
This is only the beginning…
At Admix, as owners and developers of virtual land and experiences, we know the importance of brands having experienced guides to the metaverse. So it’s encouraging that both Nike and adidas have shown the awareness to partner with existing Web3 projects.
The reason I’d currently put adidas ahead by a nose in terms of building a Web3 brand is that it chose to delve more deeply into the community, owning land in the metaverse and creating a new NFT collection, while Nike focused on the Web2 community before acquiring a route into Web3.
While the financials involved in these metaverse entries aren’t necessarily bank breaking for the two sportswear giants, they’re only the beginning. Their success or otherwise will provide templates or cautionary tales for other brands wondering how to make their own moves into the metaverse, with wide-reaching implications for how brands interact with their audiences in the next phase of the internet.