Gaming’s Metaverse Lessons for Nike

The topsy turvy world of non-fungible tokens (NFTs) just got a little shakier. StockX, the self-anointed “stock market of things,” recently began minting its own non-fungible sneaker tokens. The initial release included nine virtual sneakers, eight of which were made by iconic apparel company Nike.  

Nike swiftly filed a lawsuit claiming that StockX is, “blatantly freeriding, almost exclusively, on the back of Nike’s famous trademarks and associated goodwill.” 

However, the resale platform insists that its NFTs are tied to real-life shoes kept in a vault and that owners will be able to redeem them for physical shoes – all despite token prices which are significantly higher than the actual sneakers. 

While the looming conflict will help shape application of intellectual property law in virtual worlds, it is also indicative of a massive commercial opportunity. To capitalize on as much, Nike should instead proactively embrace NFTs according to the following principles espoused in the video game industry.

Empowering creators

Online gaming shattered the stereotype of the typical gamer being a socially isolated young male with limited sex role identity. In fact, a key driver for gaming communities is social connection with others who share interests and passions.  

This powerful sense of connection and belonging encourages the use of games as a channel for self-expression. Similarly, as a unique fusion of art and technology, games empower people to create new forms of content and experiences. The result is a new generation of gaming creators who have amassed loyal followings ranging from millions to tens of millions.  

Game publishers not only allow, but actively encourage this use of their intellectual property (I.P.) by engaging creators to help meet their marketing objectives. Nike, which already has millions of dedicated fans and lifelong customers, is similarly positioned to embrace the creative use of its I.P.  

Nike can employ NFTs to build a creator community

Namely, instead of pursuing legal action, Nike should mint creator NFTs that license owners to use some brand symbols in the Metaverse. This move offers an alternative to companies like StockX, which could purchase a creator NFT and thereby use certain trademarks legally.  

Each Nike creator would serve as a marketing partner the same way that gaming creators on YouTube and Twitch amplify game title popularity. In turn, the Nike brand would double as a powerful driver of yet-to-be-imagined immersive experiences versus simply an off-limit trademark.

Servicing economy

Online worlds like Second Life have transformed virtual economies from concept into reality. Likewise, video game publishers have fashioned economies around the sale of virtual goods. Valve’s distribution service and storefront (Steam) is home to cosmetic items from thousands of games which can be sold for hundreds, or even thousands of dollars.  

Steam’s model shows that the best way to battle video game piracy is to offer a better service, not necessarily a cheaper price than pirates. Similarly, Nike can combat brand piracy in the Metaverse by offering their brand-as-a-service. Where ownership of a creator NFT permits individuals and/or companies to integrate the Nike brand into a new generation of Web 3.0 offerings.

Valve’s Steam has spawned an economy of virtual goods

The brand-as-a-service model allows Nike to fluidly evolve its brand to meet the tastes of a new generation of customers – in a decentralized manner. It would also create economic incentives which exceed those offered by piracy. This dynamic is especially important because StockX is one of the first companies, but certainly not the last, to potentially benefit from misuse of Nike’s intellectual property. 

Creator NFTs would drive a legal economy of third-party actors who subscribe to Nike’s brand-as-a-service – to tap into the company’s millions of fans and existing customers. The same way that 40,000+ game developers utilize Steam to reach millions of gamers. 

Experiences > Ownership

Contrary to the excited bluster surrounding the Metaverse, the prospect of digital items which can be carried across virtual worlds is massively complex. Not to mention, the entire concept of digital ownership is inherently illusory. Especially since everything digital is data (bits and bytes), which means it is perfectly replicable. Besides, what is the point of owning something that can be duplicated infinitely

Plus, the idea that digital ownership is a major driver of commercial viability has been undermined by the last 20+ years of online gaming history. Where the only widely accepted notion of ownership is related to the purchase of game titles. And even that is countered by the massive success of free-to-play games.

Contrary to the excited bluster surrounding the Metaverse, the prospect of digital items which can be carried across virtual worlds is massively complex. Not to mention, the entire concept of digital ownership is inherently illusory. Especially since everything digital is data (bits and bytes), which means it is perfectly replicable. Besides, what is the point of owning something that can be duplicated infinitely

Plus, the idea that digital ownership is a major driver of commercial viability has been undermined by the last 20+ years of online gaming history. Where the only widely accepted notion of ownership is related to the purchase of game titles. And even that is countered by the massive success of free-to-play games.

Nike’s brand presence can level up experiences across the Metaverse (Original image courtesy of Epic Games)

The $100+ billion video game industry is itself a testimony to the fact that people are perfectly willing to spend considerable time in and income on playable worlds in exchange for meaningful experiences. Likewise, employing brand integrations which level up experiences is a more effective strategy than simply hawking digital items, which may or may not ever become transferable across the Metaverse. 

However, this approach requires companies like Nike to embrace a more diverse creator ecosystem. One that is flexible enough to engage anyone from emerging digital fashion designers to video game publishers to other rights holders. To the point that they are free to create innovative forms of advertising inventory.



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