In this blog, I discuss the meteoric rise of RTFKT Studios, and what Nike’s acquisition of the company means for the future of collectables in the metaverse. If you’re interested in reading my take on NFTs, blockchain and all things metaverse, check out my recent blogs: What is the metaverse and why does it matter? | Who actually owns digital assets? | The Monkey Kingdom hack: a shining example of what to do in a crisis
If you follow metaverse-related markets like I do, you’ll no doubt have noticed the letters ‘RTFKT’ cropping up a lot recently. But why?
Founded in January 2020, RTFKT Studios started out creating virtual footwear and clothing. In the relatively short period of time since, the company has expanded its scope considerably and – in doing so – has succeeded in turning the head of the biggest sports brand on the planet.
In December 2021, NIKE, Inc. acquired RTFKT for a sum thought to be in excess of $1 billion. But, as you might imagine, there’s a lot to unpack here so let’s take a step back and start at the beginning.
How do we explain the rise and rise of RTFKT?
A digital passion project
The brainchild of Benoit Pagotto, Chris Le and Steven Vasilev, RTFKT was established as a way to combine the interests and professional expertise of its co-founders. Taking inspiration from a range of childhood passions such as Diablo, Half-Life, Runescape, Minecraft, Dragon Ball Z, Evangelion, Akira and Star Wars, Pagotto, Le and Vasilev set about leveraging blockchain technology and cutting-edge innovation to deliver next-generation collectables for an ever-growing customer base.
‘So far, so normal’, you might think but, in actuality, RTFKT Studios is anything but. Why? Because not only are the collectables it develops strictly digital – delivered in the form of non-fungible tokens (NFTs) – but they are also designed to be used in environments across the metaverse.
If you’re interested in learning more about NFTs, check out my previous blogs (links in introduction).
From clothing to clones
Perhaps the boldest – and, in hindsight, most forward-thinking – decision made by the RTFKT team was to expand beyond the realm of digital apparel. Last year, the studio announced its intention to branch out into the fledgling ‘avatar’ space.
Originally codenamed ‘Akira’, RTFKT’s ‘Clone X’ venture succeeded in capturing the collective imagination of the metaverse. According to the studio’s website, “Clone X is our most ambitious project yet, the beginning of a whole ecosystem for our community, quality-focused, high-end avatars, ready for the metaverse”.
With influences ranging from anime to Hollywood, the Clone X avatars are certainly striking in appearance. In addition to their futuristic art style, their creators have also developed a compelling backstory. The project’s (hopefully tongue-in-cheek) aim is to “transfer all human consciousness into advanced clone forms to create the ultimate Metaverse”.
But do the eye-catching aesthetics and fantastical lore dreamt up by the RTKFT team explain the incredible popularity of their NFTs?
Well perhaps partly, but not completely.
Exploiting the potential of the metaverse
In my opinion, the main reason behind RTKFT’s success to date is the fact that it identified an area of nascent demand. The team also understood that, as a virtual-first brand, they could pioneer new items that simply wouldn’t be possible within the physical domain of traditional fashion.
This is why I think the introduction of Clone X was such a master stroke. Buoyed by the popularity of their earlier NFTs, the brains behind RTFKT realised that they could move beyond footwear and clothing by creating not-so-human bodies, which have become hot-ticket accessories among denizens of the metaverse.
For traditional fashion houses operating in the physical world, such ventures remain the stuff of science fiction, whereas the RTFKT co-founders were limited only by their imaginations. By identifying the untapped potential offered by the metaverse, and anticipating how associated demand is likely to develop, they are playing a major role in bringing ‘collectables’ into the next generation.
A range of applications
Another reason behind the widespread popularity of RTFKT’s products is their scope of applications. Clone X avatars are not only sought-after as digital artworks (although, admittedly, that is a big part of the appeal). These clones and their accessories have also been designed for use within multiple metaverse environments, such as Decentraland.
When the project’s website talks about “allowing Clones to travel across galaxies and expand our civilization into new galaxies and simulations,” it doesn’t take a detective to work out what the team’s longer-term vision might involve.
RTFKT, it seems, has its sights set on colonising the metaverse.
Here to stay
When people who are not familiar with NFTs hear about projects such as Clone X, they often dismiss them as gimmicks. On the face of it, this is understandable. After all, with such tokens selling for tens of thousands of dollars online, to the uninitiated, at least, it may not be immediately clear what exactly people are buying.
However, the beauty of NFTs is that they enable buyers to verify ownership of their assets – a significant contributing factor in the ongoing expansion of the metaverse. The issue of digital ‘property’ – for the time being, at least – has been solved, which is why we are seeing an ever-growing consumer base eager to establish a foothold in these fledgling digital environments.
Put simply, NFTs are quickly assuming the roles that goods such as luxury real estate, Swiss timepieces and supercars have traditionally occupied in the real world. It’s perfectly conceivable that future generations will be equally impressed by a premium avatar as they will with, say, a Lamborghini.
Another indication of the metaverse’s likely longevity is the amount of money that is changing hands, and RTFKT’s business to date offers an apt example.
At the time of writing, the floor price for a Clone X avatar, created in collaboration with Japanese artist Takashi Murakami, is ETH 5.889 – equivalent to approximately $20,000. Keep in mind that 20,000 of these avatars were minted. RTFKT’s initial collection of 13 sneaker NFTs, meanwhile, generated ETH 976 ($3.9 million at the time of sale). Make no mistake, we’re talking about serious numbers.
Big hitters are taking notice
While RTFKT may have been smart enough to capitalise on the emerging markets being opened up by the metaverse, they are by no means the only ones to appreciate the potential offered by the sector. Step forward sportswear giant, NIKE, Inc. and its December 2021 acquisition of RTFKT.
John Donahoe, President and CEO of the US-headquartered multinational, described the deal as “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”, and one which would enable the company to “extend [its] digital footprint and capabilities”.
While Nike and RTFKT have made clear that the terms of this deal will not be disclosed, the sum is thought to be in excess of $1 billion. Whatever the exact value of the acquisition, you can guarantee the studio didn’t come cheap.
And it’s not only Nike that is getting in on the action. From Adidas and Reebok to Ubisoft and Square Enix, we are seeing high-profile brands the world over making moves to secure an early presence in the metaverse.
So, anyone who still thinks NFTs are a fad should watch this space. If multibillion-dollar corporations are taking this sector seriously, so should we.