Nike Vs. Adidas: Their Web3 Battleground

We compare each NFT project released by Nike and Adidas this week, .SWOOSH and Virtual Gear, examining their similarities, differences, and implications for the future.

Nike Vs. Adidas: Their Web3 Battleground

Nike and Adidas are each lining up to claim the future of the sneaker industry.

This week, the world’s two biggest sneaker brands both launched new projects in the NFT space. On Monday, November 14, Nike announced their new Web3 platform .SWOOSH and on Wednesday, November 16, Adidas dropped their “Adidas Virtual Gear - Genesis” NFT collection. Let’s compare how Nike and Adidas are respectively approaching their own projects.

Nike:

Nike’s new Web3 platform .SWOOSH was created in collaboration with RTFKT, the NFT fashion brand acquired by Nike at the end of 2021. There appear to be several different elements housed under the .SWOOSH brand.

One part of this is a platform for creators and designers to co-create virtual products like sneakers and hoodies, to contribute to future Nike drops, and to earn royalties from their work. These virtual products will be wearable across metaverse experiences and presumably also available as physical products. Another part of the .SWOOSH brand is a marketplace for people to buy and sell these virtual elements. And yet another large pillar of .SWOOSH is an education platform, where Nike plans to provide educational content that onboards people into Web3. AND Nike is going on a multiple city tour to do real life activations around .SWOOSH and Web3 education.

Essentially, .SWOOSH is a creator hub, an NFT marketplace, and an education site all-in-one. The first .SWOOSH drops are expected to come out in 2023. While Nike has released several NFTs with RTFKT over the last year, including the MNLTHs and CryptoKicks, .SWOOSH appears to be an entirely new business unit within Nike and not just an individual project.

Adidas:

This week, Adidas dropped an NFT collection called “Adidas Virtual Gear - Genesis Collection.” These were sixteen different NFTs of hoodies and puffer jackets, some of which were inspired by or co-created by Adidas’ partners. This is the latest round of Adidas NFTs. The first NFT drop, “adidas Originals - Into the Metaverse’ was released in December 2021 as a collaboration between Adidas, Bored Ape Yacht Club, NFT collector/artist Gmoney, and NFT project PUNKS Comic. Owners of these original NFTs were able to redeem a physical merchandise drop earlier this year and the same owners were eligible to receive an airdrop Capsule NFTs as part of this week’s virtual gear collection. Owners could ‘burn’ these Capsule NFTs in order to reveal which of the sixteen NFTs they received.

The sixteen types of NFTs are essentially Adidas virtual clothes that you can expect to wear on your own digital avatar across different metaverse experiences. Adidas didn’t specify exactly where you can wear these digital items but considering Adidas owns a plot in The Sandbox blockchain game, that may be one of the first compatible platforms. It’s unclear whether they will be available to redeem as physical items.

Nike .SWOOSH vs. Adidas Into the Metaverse

For decades, Nike and Adidas have competed against each other as the two biggest shoe brands. Now they are approaching a digital battleground with similar, but different strategies. From a pure numbers perspective, Nike has already earned several hundred million dollars from royalties on NFT sales. Adidas has earned tens of millions in NFT revenue so far. What about other elements?

Partnerships

Nike

  • Since Nike acquired NFT brand RTFKT in 2021, they have been able to leverage RTFKT’s pre-existing cultural cache within the digital fashion space. Since RTFKT has produced several NFT drops this year (including a collaboration with suitcase brand RIMOWA) and will be dropping more NFTs shortly (such as the upcoming Animus project), Nike has been involved in more NFT experiments than Adidas. The RTFKT founders themselves have also become prominent thought leaders in the NFT space, helping build Nike’s credibility as a Web3-friendly brand.

Adidas

  • While Adidas’s original ‘Into The Metaverse’ NFT project included a partnership with Bored Ape Yacht Club, GMoney, and Punks comics, it’s unclear to what extent these parties are actually deeply involved in Adidas’ Web3 strategy. Apart from contributing to this week’s NFT drop, these Adidas partners have not been very vocal about their connection to the company. And compared to Nike x RTFKT, Adidas has launched far fewer NFT projects over the last year.

Positioning:

Nike

  • Whether this is merely slick marketing or an authentic attempt to empower creators, Nike’s message around .SWOOSH has been clearly focused on helping creators and designers of all types. .SWOOSH isn’t just an NFT project, but an all-encompassing platform to give creators a voice, give them literal royalties from co-creating products, and expanding their target market by educating people about Web3. The .SWOOSH team leads and RTFKT co-founders were featured on an extensive interview on Rug Radio, providing lots of detail on Nike’s plans. Building a community seems to be a major priority for .SWOOSH as they were keen to emphasize all the real life educational activations they will be doing around the world.

Adidas

  • It’s clear that Adidas takes their metaverse strategy seriously, but it is a lot less detailed and extensive when compared to Nike’s. This week’s NFT drop was not accompanied by as much content or interviews to explain the reasoning behind the project. Adidas has put much less of an emphasis on empowering creators and it’s also curious that while Adidas is a sneaker brand, their latest NFT drop has focused on hoodies and puffer jackets. To be fair, the Adidas NFTs have demonstrated clear utility and benefits, but the big picture vision and community elements seem to be lacking.

A Future For Both Brands?

Looking back over the last year, Nike’s journey into Web3 has been filled with more projects, more experimentation, and arguably a more thoughtful approach to NFTs than Adidas. Another dimension to compare the two brands is through looking at open vs. closed ecosystems. Nike, through RTFKT, has always emphasized Web3 as a way to help source, empower, and financially reward creators, whether that is through artists contributing to the designs of the CryptoKicks or through this open platform .SWOOSH is becoming. That messaging is unclear on the side of Adidas, who launched this week’s NFTs seemingly from a small group of Adidas-employed artists. This implies that Nike’s approach to Web3 is about developing an open ecosystem vs. Adidas’ experiments so far as a relatively more closed ecosystem.

Another missing element yet to be discussed - how will athletes signed to Nike or Adidas be impacted by this? Will Nike athletes be promoting .SWOOSH? Will Adidas athletes wear the hoodie NFTs in real life? Each brand has a comparably strong stable of athletes and celebrities who continue to serve as brand ambassadors. The way Nike and Adidas integrate these influential people into their Web3 strategy will be massively consequential.

Part of the reason these NFT strategies appear different might come from the fact that Adidas is in a tough spot. The biggest Adidas story of the year has been focused on the brand’s messy divorce from Ye and the discontinuation of the YEEZY brand. Not only does the loss of YEEZY leave a billion dollar hole in Adidas’ balance sheet, but it decreases the overall cultural relevance of the brand. The incoming Adidas CEO, former PUMA CEO Bjorn Gulden, has many issues to fix with the brand that might necessitate him deprioritizing Web3 vs. his counterparts at Nike.

No matter what happens, both Nike and Adidas are taking bold steps forward into the NFT space. Let’s see who can do it best…