Nike’s .SWOOSH platform is just a rebranded NFT marketplace

Nike recently announced its own digital commerce platform, .SWOOSH, where fans can buy virtual brands. But if you think this means your digital avatar will wander around a metaverse in cute kicks, you’ll be in for a long time.

This isn’t the brand’s first foray into the metaverse or Web3. Over the past couple of years, it has been a prominent brand in the field Fortnite and more recently, Roblox with NIKELAND. This allowed users – mostly children – to participate in virtual events and games. Virtual merch drops and purchases have also allowed the brand to create digital ambassadors in the Roblox metaverse as users walk around the gear.

The company even launched a CryptoKicks NFT collection on the Web3 marketplace OpenSea.

All of these Web3 tip-toes seemed to be in preparation for Nike launching its own user-focused platform.

Nike is easy on the details

There aren’t many details surrounding .SWOOSH yet. What we do know is that the plan for the marketplace is to drop its first virtual goods run sometime in January. And despite the Web3 marketing associated with the platform, items cannot be purchased with cryptocurrency – only US dollars for now.

The platform is currently in beta testing with selected users who have been given access codes. According to the site’s blog, some of these have gone to attendees of .SWOOSH sessions currently taking place in select cities across the United States.

Collaboration is at the forefront of Nike’s messaging for .SWOOSH. It has even created a new tagline for the marketplace – “It’s not you, it’s us”.

While .SWOOSH will begin as a marketplace for users to purchase digital versions of shoes, jerseys, etc., Nike promises that the “community” will eventually be able to co-create virtual products as well.

“That’s right. In this world, some of you will have the chance to learn how to build virtual creations that can be used in video games and experiences.” a .SWOOSH blog post reads.

“And for the select few creators who win our community challenges, you can earn royalties from the virtual products you create with us.”

Nike also claims that the virtual item will be usable in video games and other online experiences at some point, but provided no further details.

.SWOOSH is a rebranded NFT marketplace

If all this sounds vague and like a PR spin to launch an NFT marketplace – yes.

The prolonged crypto bear market of 2022 has seen NFTs become a dirty acronym. And there are a few reasons for that: severe market downturn, fraud and the ease of committing fraud.

That’s before you get into the complexities of intellectual property disputes, especially between countries. As usual, laws are not able to keep up with new technologies, which provides ample opportunities for bad actors.

Less than 12 months ago, they were being promoted as the hottest new get-rich-quick way in the crypto space. Even celebrities and brands got in on the act by launching their own collections or using the purchases for additional profits.

For example, Seth Green bought one of the infamous Bored Apes and used his newly minted IP to create an entire TV show around the character. He also lost it for a while after being scammed, which is a whole other story.

Less than a year later, and brands in particular are distancing themselves from NFTs because of the negative connotations.

But that doesn’t stop them from launching with a cheeky rebrand. Reddit even did this a few months back with their ‘Collectible Avatars’.

In the case of Nike, you will not find the term ‘NFT’ on the core .SWOOSH website, blog posts or marketing materials. Instead, you’ll see terms like “interactive digital objects” and “virtual creations” being thrown around.

In the media, .SWOOSH products have been reported as “similar” to NFTs. But here’s the thing – they’re not the same. They are NFTers. Nike even admits it if you take a look at their site’s terms of service. There you will find the buried expression used a total of nine times.

“Each ‘Digital Collectible’ is a digital asset consisting of an NFT together with the license rights to an associated digital work of authorship or other content,” the terms and conditions state.

Most people don’t want to make money off virtual Nike merchandise

Nike has said that some creators who win community challenges will be able to earn royalties, but that’s probably the only way you’ll be able to make money on the .SWOOSH platform.

This is important because profit has been a driving force in the current NFT space which tends to focus on artifacts and artwork. Although there are non-profit uses for NFTs in the future, such as smart contracts, it is not particularly prominent in most people’s minds at the moment.

.SWOOSH T&Cs make it very clear that these virtual goods cannot be resold.

“You acquire Digital Collectibles solely for consumer use in connection with the Services or for your own personal collection, use and enjoyment, and not for distribution,” the .SWOOSH terms state.

“You are not acquiring Digital Collectibles as an investment, and you have no expectation of financial benefit or profit as a holder of Digital Collectibles.

“You are acquiring Digital Collectibles for your own use and not with a current intention or purpose to sell the Digital Collectibles to anyone else.”

Speaking of financial benefits, Nike is touting the idea that it will help teach users how to create virtual items, and that’s where potential royalties come in. But they said it will only be for a select few during community events.

It makes me wonder how the overall “creation” ecosystem is handled on the platform. If an ordinary person creates a hot design, who owns that IP? Can Nike put it into production in the real world and make money without paying the creator?

You won’t be able to do much with it at all, yet

Despite the fact that you “own” the virtual goods, you won’t even be able to move them to a crypto wallet of your choice. While Nike has said on its website that it plans to roll out this functionality eventually, for now users will need to set up a wallet managed by BitGo to store their Nike NFTS.

Even if third-party wallet functionality is rolled out further in the future, users must be careful that it is compatible.

Despite the term ‘blockchain’ being thrown around as a singular (much like ‘metaverse’), it is more than one. While interoperability is improving, there is a long way to go.

.SWOOSH is built on Polygon, which is a layer 2 Ethereum solution. In very simplistic terms, it is built on top of the Ethereum blockchain. So trying to transfer to a wallet on another network could potentially cause problems.

Think of it like trying to stick a Nintendo Switch cartridge into a PlayStation 5. It just doesn’t work. And in the case of NFTs, sending it into the ether can mean losing it forever if you don’t know what you’re doing.

“The Digital Collectibles are currently only available on the Polygon Blockchain. In the event that you transfer a Digital Collectible to a digital wallet that is not compatible with the Polygon Blockchain, your Digital Collectible may be lost, destroyed, or otherwise become unavailable to you. », it says in the .SWOOSH T&Cs.

So that leaves the .SWOOSH platform itself. It is probably not necessary to remove the NFTs if there is a lot of use for them there. Maybe, but we simply don’t know what that looks like yet.

Nike has been incredibly vague, even admitting to “progress over perfection” as it takes baby steps on the project. While “video games” and “events” have been thrown around as future possibilities, it’s hard to pin down what that means.

Unlike Roblox, .SWOOSH is not a metaverse with 52.2 million active daily users to potentially tap into. And if Nike were to even launch their own metaverse, we already know they’re in trouble.

Just recently, the world got a look at Meta’s own Horizon Worlds, which was laughably bad. You know things are grim when Mark Zuckerberg, one of the richest men on the planet, can’t get his legs working in his metaverse yet.

And while the NFT world promises a future where your personal items can be swapped between different titles – this isn’t very realistic if you know anything about game production.

That said, perhaps Nike will use its current partnership with the highly popular NBA 2K series to integrate .SWOOSH. I see it as a real opportunity that can actually attract users.

But in the meantime, the future looks hazy for the platform. It’s hard to see it as more than a rebranded NFT platform for flogging virtual items that may or may not have real value in the future.