Nike launches metaverse platform to enable users to create, trade original collectibles

Yahoo Finance sports reporter Josh Schafer looks at the Nike's metaverse platform ".SWOOSH" that will allow users to create and trade original Nike designs and collectibles.

Video transcript

DAVE BRIGGS: Nike is making a big push into Web3 with a new platform called Dot Swoosh. Yahoo Finance's Josh Schafer is here with more on this. Josh, this is an interesting project. A couple of reasons, there seems to be a physical element, at least in the backend, but they really want to open the aperture and speak to the masses somewhat here.

JOSH SCHAFER: Yeah.

DAVE BRIGGS: Fascinating.

JOSH SCHAFER: Definitely, Dave. So kind of look at what Dot Swoosh is supposed to be here. So it's a Web3 enabled platform, and it's meant to be a digital community akin to a lot of Nike's other shoe communities, right? And so things you can do are basically co-create a virtual product maybe with a Nike shoe designer, and then you can sell it in the Metaverse-ish, right, in the virtual world, and earn royalties from that. And then eventually the thought is that it can maybe turn into real life products.

When you sort of zoom out about what Nike's doing here, guys, it's a bigger part of their brand digital strategy, right, that we've seen grow a lot. That segment grew for them 16% year over year last quarter. And that was what one of the analysts I talked to pointed to. He's a big part of the digital growth. So David Schwartz at Morningstar told me earlier today. He said the move makes sense, given that there is already a big collector community for Nike shoes. And its core customers are the demo that is likely to be early adopters of this kind.

So he's sort of getting at the fact that shoe collectors are generally skewing younger, right? We're talking Gen-Z, younger millennials that are currently Nike shoe collectors. They may be more likely to be interested in the Metaverse per se or some kind of Web3 play.

SEANA SMITH: Yeah, and Josh, I know it's very, very early in the game. But just from what we've heard over the last year, you mentioned the fact that they have been investing in the Metaverse for several months at this point. The interest so far, what does that tell us of just about how big of a priority this could potentially be for a Nike down the road?

JOSH SCHAFER: Right, and we should note that the head of this project, Seana, is Ron Faris, who headed Nike sneakers app. And that's their big collectors app that's grown over the years. And so when they put a big name like that in front of our project, that means they want it to work out, right?

And I think what Nike is looking to do here is, as the Metaverse grows, as those apps grow, the characters have to wear some kind of clothes, right? And they want them to be wearing Nike shoes like they wear in the real world. Nike dominates the sneaker space, for the most part. Dave and I are both wearing Nike's right now.

DAVE BRIGGS: I was just taking a peek at you.

JOSH SCHAFER: And I think that they want that to be a part of what happens in the Metaverse and in Web3. One other interesting thing I wanted to point to here, Rachelle, is they mention-- they didn't mention the Metaverse once in the release. I think that's interesting that they don't really want to use that rhetoric when talking about the project.

RACHELLE AKUFFO: I mean, we did hear one guest calling it cringe to talk about the Metaverse, saying things are meta these days. But we did see that Nike told Complex, though, that Nike is going to be prioritizing Web3 education with this six-city tour. So really bringing the education part of it so people actually can understand it before they start selling things virtually, how important do you think that is so that people actually get an understanding of what they're getting into?

JOSH SCHAFER: Well, it's big, Rachelle, because as we know, knowledge of the Metaverse and Web3 and things like that and even those words, as you just mentioned, kind of scare some people away, right? But Nike shoe collector community is huge. So I think what you're going to see is them trying to merge those two things and bring in someone that maybe collects shoes, but isn't familiar with the Metaverse, isn't familiar with Web3, but is a collector at its core.

And this might have utility, Rachelle, too, which is the big thing, right? If it turns into a physical product eventually and becomes-- you create these shoes online and then maybe you can buy them in real life, or you can go to a real experience, or your player on NBA 2K can wear those shoes, that's where these projects tend to make a lot of sense. And that's where it seems like Nike wants to go.

DAVE BRIGGS: You got me with that. That's what intrigued me the most, the possibility down the road that I could actually-- well, I wouldn't wear the shoes I design because I got no skills, but I might wear the ones you design. Josh Shafer, good to see you, man. Thank you. Interesting stuff.