On Monday, December 14, Nike announced the acquisition of RTFKT Studios, which it describes as "a premier brand that harnesses cutting edge innovation to offer next-generation collectibles that blend culture and gaming".

According to Nike CEO John Donahoe, the acquisition will expedite Nike's digital transformation and allow RTFKT to serve athletes and innovators.

"This acquisition is another step that accelerates Nike's digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture," says Donahoe.

"We're acquiring a very talented team of creators with an authentic and connected brand. Our plan is to invest in the RTFKT brand, serve and grow their innovative and creative community and extend Nike's digital footprint and capabilities," he added.

RTFKT, founded in 2020 by Benoit Pagotto, Chris Le, and Steven Vasilev, has been revolutionizing the physical and digital worlds. It is committed to using cutting-edge gaming engines, NFTs, blockchain authentication, and augmented reality to create one-of-a-kind virtual products and experiences.

"Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity and community, and we're excited to grow our brand which was fully formed in the metaverse," Pagotto said.

RTFKT's initiatives have garnered much attention since the brand's inception roughly two years ago.

In February, the studio collaborated with the artist Fewocious to produce a set of rainbow-colored virtual sneakers dubbed NFTs. It earned $US 3.1 million from the sale of 621 pairs via bitcoin purchases. Its popularity quickly spread to the secondary market, where the digital shoes were selling for more than twice their original price just a few weeks later.

The RTFKT's website prompts visitors to link their Metamask wallets, which is one method NFT owners may validate their purchases. The idea is that in the future, you'll be able to play games or enter other types of VR spaces where your stuff can materialize once those spaces have scanned the blockchain to determine which objects you possess the rights to.

Users in such blockchain-based settings can purchase virtual land and other digital goods such as avatar apparel in the form of a crypto asset known as NFT. Customers who buy NFTs are acquiring a one-of-a-kind digital asset that cannot be duplicated or obtained elsewhere.

Nike loves the idea, praising the company's founders for using "the latest in gaming engines, NFTs, blockchain authentication, and augmented reality to create one-of-a-kind virtual products and experiences".

While RTFKT does sell physical things, Pagatto said it draws its cues from the gaming community. The company is particularly interested in helping these customers — as well as cryptocurrency enthusiasts who want to burn their digital cash.

Using the blockchain, NFTs let you acquire and sell ownership of one-of-a-kind digital things while also keeping track of who owns them. It technically can include anything digital, such as paintings, animated GIFs, sounds, or video game objects. An NFT can be one-of-a-kind, like a real-world artwork, or one of many copies, like trading cards, but the blockchain maintains track of who owns the file.

Nike first considered NFTs in 2019, when it received a patent for blockchain-compatible sneakers known as "CryptoKicks". The patent's concept is to provide purchasers with a digital duplicate of the actual shoes they purchase, which is then held in a bitcoin wallet known as a "digital locker."

In November, the apparel giant said it intended to rapidly grow its presence in the metaverse. It has registered new trademarks for the production and sale of virtual footwear and clothes. The plan gained prominence after Facebook recently rebranded itself to Meta Platforms Inc.

Nike positioned RTFKT's lightning bolt-style emblem beside its own recognizable swoosh, Jumpman, and Converse marks when announcing the acquisition on its website. However, the terms of the deal will not be disclosed.