Nike wants to bring sneakerheads into the Metaverse

Nike wants to bring sneakerheads into the Metaverse

An Analysis of Empirex Capital

Why Nike is interested in the Metaverse

For those as of yet unfamiliar with the concept, the easiest — yet very incomplete — way of imagining the Metaverse is imagining yourself existing in a real-life video game. Nike enters and provides very cool meta-stuff.

Patent filings dating way back to the pre-Metaverse universe in 2018 reveal that Nike has seriously been stockpiling the tools with which it can do business in the Metaverse. These digital tools will include sneakers but also avatars and other forms of virtual branding. Sure, Nike intends to sell you digital products (and you will buy them because Nike knows how to make you want them), but the meta-plan revolves around entire digital worlds.

Is this just Nike being Nike? Sure, but if we choose to define that as creating net-new revenue streams, as it has throughout its entire history, then good for it. Someone’s going to own the Metaverse swag, and it might as well be Nike.

The Metaverse has rules that will be new for Nike

Nike needs to be prepared for the notion of destruction by duplication. In this temporal world, Nike has been very litigious of late with its intellectual property (IP). Yet, in the Metaverse, duplication will transcend our current conceptions of what’s legal. The value of Nike’s meta-wares will absolutely be affected by what the company would deem to be pirates yet others would call artists.

In the real world, there is a recent art project called the Museum of Forgeries with significant commercial application. In brief, Brooklyn art collective Mschf bought an original Warhol for $20,000 and made 999 exact forgeries. It then mixed in the original and sold all 1,000 “might be real” Warhols for $250 each for a grand total of $250,000, of which $230,000 is profit.

The same thing will happen in the Metaverse. Some rare Nike drops (what we sneakerheads call a new release of a shoe or even a color — known as “colorway” — of a shoe) will be real, some may be real, and some will be either knowingly or unknowingly fake.

Can Nike help build a Metaverse legal structure?

Patel sees a real opportunity here. “Nike has the resources to educate judges through trial because they can afford to pay their lawyers to drag out litigation, but other smaller petitioners would have a hard time convincing a judge that they own virtual property that exists on a virtual land registry, maintained by a decentralized blockchain,” he said.

Patel explained that if he were to buy virtual land in the Metaverse, the judge would probably view the transaction as a sale of goods and not a transfer of the real estate. Because statutory regulations do not contain nor entertain the notion of virtual real estate, this virtual land can’t be recorded in a virtual land registry because that registry is not governed by a municipality or sovereign.

Created on 26th Nov 2021