Nike Share 2024 Web3 Roadmap

Nike is THE case study for most executives when planning their Web3 roadmap. So what have DOT SWOOSH got in store for 2024?

January 15, 2024

Introduction 🔌🔧

Last week was historic for crypto as the US finally greenlighted a Bitcoin ETF, allowing retail and institutional investors to get exposure to the underlying asset, without ever touching it.

Simon Taylor breaks down why this is so important here on LinkedIn.

It’s a huge moment for those who have been working to ‘clean up crypto’ and will go a long way to legitimising the space.

I’m already seeing (and hearing) the ripple effect firsthand.

Compliance and legal teams are getting a lot more comfortable with anything crypto-related, and that has been the case since rumours of the ETF began to appear in late 2023.

Brands that are aiming to build loyalty solutions or fan engagement applications are all pushing harder than ever — as a mixture of:1) Clearer regulations globally2) Healthier crypto markets 3) ETF approvals4) Big brand announcements (VISA Loyalty program rollout)

All paint a much clearer, safer and positive picture.

A Bitcoin ETF doesn’t mean everything is perfect, but it’s certainly a pillar in the foundation that Web3 can grow from.

🔌 A reminder to read my 2024 Sports x Web3 predictions → Find them here🔌 We are looking for sponsors for the newsletter throughout 2024 (mid-roll) and for partners for our events in Barcelona (February), NYC & Dubai (April) and London (June). Email me back at this address if you are interested!

The Sporting Crypto Newsletter is supported by The HBAR Foundation.

Whenever Nike announce something about DOT SWOOSH, their home for Nike Virtual Products, it gets a lot of coverage.

And it’s no different here on Sporting Crypto.

Some of our most-read newsletters are about DOT SWOOSH.

When presenting to stakeholders and industry leaders, some who get bored by the nitty gritty of blockchain suddenly perk up when Nike is mentioned.

It’s natural that, in an industry that is still trying to figure things out as it goes, we are desperate for a playbook — and sometimes peering over and copying homework is useful. It gives decision-makers confidence and clarity when their plans and strategies are vindicated by a large brand.

In a short blog post via medium, DOT SWOOSH outlined their plans for 2024 which caught the attention of many in this space. Discussed in this newsletter:

⌛ Nike’s plans for 2024→ 🎮Going deeper on gaming with in-game wearables → 👟Exclusive physical products→ 👛 Digital collectible self custody & creator royalties đŸ§  Concluding thoughts and analysis

Before we get stuck in, here’s a timeline of DOT SWOOSH by Nike, since its inception in November 2022:

  • In November 2022, Nike launched DOT SWOOSH. It is described as “a web3-enabled platform that champions athletes and serves the future of sport by creating a new, inclusive digital community and experience and a home for Nike virtual creation”. They onboarded Nike fans using Nike DOT SWOOSH ID, a non-token that acts your .SWOOSH account. Since then 379,095 DOT SWOOSH IDs have been claimed.

  • In January 2023, Nike launched the Your Force One contest, where members could co-design sneakers for the Our Force 1 collection.

  • In April 2023, Nike distributed 106,453 free virtual posters to DOT SWOOSH community members who had previously engaged in co-creation with Nike.

  • In May 2023, over 30,000 people bought almost 100,000 Our Force 1 boxes resulting in almost $2m in revenue for Nike

  • In June 2023, Nike announced that DOT SWOOSH NFTs were to appear in future editions of EA Sports video games. They also partnered with Fortnite to create ‘Airphoria’ — players who linked their Epic Games and Nike accounts while Airphoria is available were able to claim an "Achievement" on DOT SWOOSH.

  • In October 2023, Nike launched TINAJ (This is not a JPEG), a phygital sneaker release via the Nike SNKRS app for owners of the OF1 NFT collection.

⌛ Nike’s plans for 2024

This week DOT SWOOSH (by Nike) outlined, in a blog via medium, their plans for 2024.

It focused on the three following categories:

🎮Going deeper on gaming with in-game wearables 👟Exclusive physical products👛 Digital collectible self-custody & creator royalties 

Let’s dig into each of them.

🎮Going deeper on gaming with in-game wearables 

In this blog, DOT SWOOSH wrote:

“We’ll go way deeper into video gaming with the launch of a new line of virtual products — Nike In-Game Wearables.

In-Game Wearables are different than our digital collectibles (like OF1) because you can purchase and wear these collections directly in your favorite video games. 

You’ll also be able to unlock exclusive physical apparel and footwear in the real world based on the in-game wearables you purchased. You won’t need a wallet to store any of these new products — you’ll just link your game accounts to Nike. More on that later.”

At first glance, this is very exciting… if these In-Game Wearables are NFTs!But whether they are or not, is difficult to decipher.

As the quote in bold says — “In-Game Wearables are different than our digital collectibles (like OF1) because you can purchase and wear these collections directly in your favourite video games”.

That to me signals that the In-Game Wearables (IGWs) won’t be NFTs, because, why would a game publisher allow NFTs not created by themselves, onto their platforms?

That, however, does contradict announcements of yesteryear — in June 2023, Nike announced that their NFTs will be incorporated into EA Sports titles.

What ends up happening is anyone’s guess - but if I was the one guessing…

  1. Nike create a new bracket of virtual assets (IGWs) that aren’t NFTs, and can be utilised in any game, in a controlled environment, for partnerships with publishers that don’t want NFTs on their platform (Roblox, Fortnite?)

  2. Nike’s digital collectibles, past, present and future — are utilised in games where Nike have specific partnerships in place (EA being one?)

  3. Nike continue augmenting the digital collectible experience to be connected to DOT SWOOSH, but where an NFT does not go from one platform to another.

Nike then go on to say:

"You’ll also be able to unlock exclusive real-world apparel based on the in-game wearables. You won’t need a wallet to store any of these new products — you’ll just link your game accounts to Nike.”

This once more signals that the IGWs aren’t NFTs.

This is unless, of course, Nike are configuring Nike accounts to automate wallet creation on the backend, which seems unlikely. If they are, then it’s really smart, but I doubt that is the case considering they have already said they’re not building their digital marketplace, so a custodial wallet inside an already existing app seems more far-fetched than that.

To me, overall, this feels like a different ‘product’ in the DOT SWOOSH offering, one that has no on-chain attributes.

To launch big partnerships so far, Nike have become the experts in augmenting Web3 experiences beyond simply buying an NFT that is verified by a blockchain.

Take their Airphoria experience, for example, on Fortnite.

By linking your Epic Games and DOT SWOOSH account, and purchasing an Airphoria pack on the game, you were able to claim an Airphoria Achievement NFT.

Connect DOT SWOOSH to Epic Games → Buy Airphoria Pack → Claim NFT on DOT SWOOSH

The extra step in between augments the traditional NFT experience slightly, and means you don’t need NFTs inside Fortnite at all.

With IGWs, I think the path they’re going to take is one removed from NFTs.

This will give DOT SWOOSH an array of virtual products, from purely on-chain, a mixture of on and off-chain and completely off-chain (IGWs?).

This is speculative of course and the IGWs may well be NFTS, but I see Nike extending their traditional business to virtual goods via in-game stores.

This allows them to cater to the hardcore super fans who will want to buy, own and use their virtual items in a variety of applications and environments, all the way to the casual Nike shopper — who might buy some Fortnite skins if they have a swoosh on them, as they have proven out with their Airphoria experience.

👟Exclusive physical products

The next category Nike talk about is exclusive physical products.

The TINAJ AF1s, physical sneakers, were only available to purchase if you held a Nike Our Force 1 (OF1) NFT, and a digital version (digital twin) was airdropped to your DOT SWOOSH account.

 

On the topic, they said:

“These and other products were targeted based on traits in the virtual products you collected. We’re going to double-down this next year on more exclusive physical product — both in footwear and apparel — for those in our .SWOOSH community who buy our in-game wearables or digital collectibles.”

Again, this is a hint that IGWs won’t be on-chain NFTs — as they are directly differentiated from ‘digital collectibles’ in the blog post.

This is still exciting, however.

The idea of digital apparel being linked to physicals is going to be the norm in the future, and there’s a chance that the digital side will not all be on-chain. And even if it eventually is, DOT SWOOSH are looking to onboard as many people into their world as possible in the short term — and right now — gaming is the growth sector with young digital natives that everyone wants to tap into.

👛 Digital collectible self-custody & creator royalties 

The last section dives a bit deeper into the Web3 components of DOT SWOOSH.

Nike, in their medium post said:

All that said, we recognize how important it is for you to have control of your digital collectibles and so in the second half of this year, we’ll be allowing you to off-ramp your collectibles to your own wallet. That way, you’ll be able to trade them with others on marketplaces that guarantee royalties to creators. Having collaborated to co-create products this last year, it’s especially important to us that all creators benefit financially for the contribution of their art. To be clear, we will only be allowing for off-ramping to other marketplaces — we won’t be building our own. Simply put, building our own marketplace could distract from our product creation and storytelling, which we feel is most important to us — and to our members. We’ll be sharing more details about this later in the year as well.

There are three key points here I want to highlight:

  1. DOT SWOOSH will allow users to transfer their NFT from their DOT SWOOSH platform and custody them in their own wallets

  2. Users will only be able to trade these on platforms that guarantee secondary market royalty payments

  3. DOT SWOOSH won’t be building their own marketplace (this is a huge surprise to me)

I’ve been wondering for a while what part of their offering DOT SWOOSH will focus on most.

Is it the mainstream consumer with more ‘Airphoria’ like activations, or is it the more crypto-savvy consumer with deeper pockets likely to buy NFTs?

It seems as though they’re focusing enough attention on both. 🧠 Concluding thoughts and analysis

One passage from the blog post stood out to me:

We also confirmed that a virtual product’s value should be based on the enjoyment it gives you when using it to express yourself or unlocking access to physical product. It’s more about the joy of collecting — of being a true fan — not just a transaction.

That final quote in itself might be whimsical, airy PR, but it also shows that Nike know where the world of Web3 heading.

It’s more about the joy of collecting — of being a true fan — not just a transaction.

It’s crossing the chasm of speculative financial plaything to becoming the fabric of digital culture, and the rails in which it moves upon.

Nike has so far created something in DOT SWOOSH that can:

  • Create and house their digital creations

  • Allow their NFTs to plug into games (EA?)

  • Allow their members to claim commemorative NFTs by achieving something in-game (Airphoria with Fortnite)

  • Reward their users with physical creations, claimable through NFTs (TINAJ)

They also plan to create In-Game Wearables (TBC one whether they will be NFTs) as they double down on gaming, whilst continuing to expand their Web3 native offering, accentuating the ‘crypto nativeness’ of their virtual studio by allowing users to transfer creations off-platform.

The surprise to me is that they’re not building their own marketplace.

This felt like an absolute no-brainer to me, but I can imagine that there are regulatory barriers to entry here.

Nike continue to be one of the most progressive and interesting case studies from a brand perspective in Web3, and I’m sure they will create many headlines in 2024.

💡 Sporting Crypto Spotlight - Ep. 12 of the Podcast!

In Ep. 12 of the Podcast I was lucky enough to speak to Drew Austin, Founding Partner of Red Beard Capital!

Watch the episode on YouTube!

Or your podcast player of choice… if you’d prefer not to see our faces!

More Sports & Web3 Stories

  • Sorare launches daily fantasy football game; Sorare Rivals (Read more here)

  • FC Bayern and Bitpanda agree multi-year partnership (Read more here)

  • MeetKai & the NBPA announce new partnership; aims to offer metaverse experiences (Read more here)

  • UK Govt has published a response to the Culture and Sports Committee report; NFTs & Blockchain: The Risks to Sport and Culture (Read more here)

  • Web3 Sports Fantasy Manager Maincard.Io Is Breaking Into Esports With Big-Name Partnerships (Read more here)

  • OKX announces partnership with Matr1x, Web3 entertainment platform (Read more here)

General ‘Stuff’ that Could Impact You

  • Major League Soccer Launches Pioneering MLS Innovation Lab (Read more here)

  • BlackRock, Fidelity early winners among 11 spot bitcoin ETFs (Read more here)

  • BlackRock CEO Larry Fink Backs Ether ETF (Read more here)

  • Fox has publicly debuted a new blockchain platform called Verify to help media companies track how their content is being used online. (Read more here)

  • USDC stablecoin issuer Circle confidentially files for IPO (Read more here)

  • X removes NFT profile pictures (Read more here)

  • Apple Vision Pro available in the U.S. on February 2 (Read more here)

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