The Kicks You Wear, Vol. 245. — 👍 Nike is still doing the digital dash
Everyone is cooling on the Metaverse, but Nike is still thriving.
Goooood morning, family. Welcome back to the Kicks You Wear. Thank you so much for rocking with me.
Hope you had a fantastic weekend. Thank you for letting me kick your Monday off with some hot sneaker goss. Did I really just say that? Yup. Wow. Please don’t stop reading.
Let’s jump in.
Nike still has big plans for digital
If it feels to you like everyone has cooled off a bit on the metaverse talk, you’re not tripping. They have.
By the numbers: The latest quarterly report from data tracking site Nonfungible in July paints a bleak picture.
The USD traded this year between Q1 and Q2 on NFTs dipped by 25%.
There’s also been a 46% decrease in resell profits through that same period.
But here’s the thing: Nike — the leader of the sneaker world — is still diving deep into the digital landscape. And it’s working, per sales data from Dune Analytics.
Nike has brought in $184 million in revenue off of NFT sales so far. That dwarfs its sneaker competitors like Adidas and even high fashion luxury brands.
About half of that is from primary sales ($93 million) while the other half is from secondary market royalties ($91 million).
So the question is: If everything is cooling, then why is this working so well for Nike?
To dive into that, we need to talk about why folks are backing away. The answer is pretty simple. It’s just too speculative. We just had the biggest interest rate rise we’ve had in a quarter century. Digital assets are too risky in this market.
Nike is shielded from this. That’s because they built their infrastructure by investing big into two pillars of this digital world.
First, they built Nikeland via Roblox, which was already a massive moneymaker on its own.
Second, they copped RTFKT, which is by far the biggest player in the digital sneaker world.
Those are two entities that already came with passionate audiences that weren’t going to fade with trends. People dishing out hoards of cash for these digital assets are doing it mostly for fun and status — it’s not the profit.
Before Nike, RTFKT had already built itself up as a leader after just one year with projects with Takasi Murakami and collections that sold for millions.
Roblox has an audience of more than 50 million even after a decline from its pandemic high and is a billion-dollar industry on its own.
It is through those passionate (and also rich!) bases, that they’ve created assets that have sold for over $1 billion and counting on the secondary market.
Now, now: It’s still smart to be skeptical of all this. The market has cooled for good reason. The speculative nature of this digital market presents an inherent risk only the most financially secure folks are able to dive the deepest into so far.
Without the buy-in from the mainstream, there will always be a cap on how this thing can grow. That buy-in is not guaranteed, obviously. That’s why we are where we are now.
But, regardless of all that, Nike is still all-in. And that’s not changing anytime soon.
An interesting wrinkle in the Kanye-Adidas saga
Adidas and GAP aren’t the only ones who stand to lose something in their respective breakups with Kanye West.
What’s the word: Kanye might end up losing his billionaire status if he goes through with clipping his Adidas deal, per Forbes.
“It’s his beef with Adidas that jeopardizes the billionaire status Ye campaigned so long for. Losing the footwear giant would knock his fortune to well below $1 billion, based on Forbes estimates, a fall that would come even as he shakes up his inner circle.”
The breakdown:
West is currently valued by Forbes at $2 billion. That includes a stake in Kim Kardashian’s Skims company, real estate investments and more.
His Adidas deal reportedly pays him $220 million annually and is worth $1.5 billion in total
If he nixes the deal, he loses that capital completely.
This puts things into a bit of perspective. West’s relationship with Adidas goes way deeper than it ever did with GAP, which is why he can’t just cut ties so simply. He has more to consider here.
What’s next: This will almost certainly come into play as West tries to make his jump to independence with Yeezy. If we’re being honest, the smart thing to do here is to ride the deal out and prepare to move on after its done.
But hey, man. Jeen Yuhs. Or something like that.
Breanna Stewart breaks a decade-plus long streak that needed to be broken
Breanna Stewart blessed Special Delivery with her presence this week to talk about her new signature sneaker model, the “Stewie 1.”
Why it’s a big deal: It’d been an unconscionably long time — over a decade— since the sneaker industry had seen a woman’s signature shoe with this sort of rollout.
Elena Delle Donne, apparently, has a signature model but it’s not on sale anywhere yet.
Parker might have another signature model but it’s unclear if the Exhibit B is a Player Exclusive or an actual signature shoe.
There are no questions or caveats here with Stewie’s new joints. She talked to us all about it on this week’s episode of Special Delivery. Tap in.
Puma, why y’all do this to Kuz?
I know last week was New York Fashion Week and all. And when it’s New York Fashion Week, people really get to wearing just about anything.
But aye, man. Puma. Did y’all really have to have Kyle Kuzma out here looking like this?
I don’t even know what that is, y’all. I think it’s a skirt made out of two humungous bubble coats but, honestly, I’m unsure. It’s definitely giving me big Ursala vibes, though. Somebody said Kuz was auditioning for a role next to Halle in The Little Mermaid and now I can’t unsee it.
I’ll refrain from too many jokes for now. But Kuz better bring this same confidence to the court this season for the Wizards. Otherwise? It’s curtains, buddy.
What’s droppin, bruh?
Nike Dunk Low “Medium Olive” — Tuesday, September 20
Nike Air Kukini “Leopard” — Tuesday, September 20
Air Jordan 1 “Demin” — Thursday, September 22
Air Jordan 1 Low “Split” — Thursday, September 22
Air Jordan 1 “Taxi” — Saturday, September 24
Thank you so much for rocking with me. Appreciate y’all. You’ve got a fantastic week ahead of you. Attack it!
Let’s chat again Friday. Until then, peace and love. Be easy. Be safe. Be kind. We out.
-Sykes 💯