Do you know why major brands bulling on NFTs? When it comes to alternative investment opportunities, NFTs (normally called non-fungible tokens) are among the most distinctive options out there. An NFT is a digital investment that is an element of the Ethereum blockchain. When you invest in a non-fungible token, you could be buying a digital piece of art, ownership to a logo or tweet, or a character you can utilize for play-to-earn gaming.
While investing in a digital everything might appear strange, NFTs are growing at an astonishing trajectory in the market. In 2021, NFT sales totaled over $40 billion, and in 2022 they cannot be avoided.
Why do these companies purchase digital “investments” nobody will ever feel or touch?
The possibility for profits draws business interest to NFTs as they translate to fresh revenue streams. As the number of people who consume several hours of virtual worlds day-to-day, grows, brands follow.
Here’s a summary of the latest and greatest trends in the major brands and their respective NFT strategies.
Adidas Interactive Art Project
Adidas has been leaning into the metaverse with collaborators such as Bored Ape Yacht Club, GMoney, and PUNKS Comic. In December 2021, Adidas launched their project “Into The Metaverse,” a line of collectible NFT tokens, each selling for about $800, selling out in minutes, and netting the company about 22 million dollars. (see video)
In their newest collaboration, Adidas and Prada are teaming up in a community digital art project, “Adidas for Prada re-source.” This project will give fans an opportunity to contribute to a tiled canvas that will then be minted into an NFT and sold at auction. The revenue will be split amongst fans, a non-profit organization, and digital artist Zach Lieberman who will assist in creating the final design.
Nike has also been diving deep into the metaverse with their recent collaborations with Roblox and RTFKT. At the end of last year, they partnered with Roblox to create a virtual world where players could compete with friends, design their own mini-games, and unlock exclusive clothing and accessory pieces for their avatars.
More recently, Nike acquired an NFT sneaker brand which was completely formed in the metaverse RTFKT. Popularized by their virtual collectible sneakers RTFKT is at the intersection of gaming, creativity, and sports, which will boost Nike’s digital transformation into the Metaverse. The co-founder of RTFKT Benoit Pagotto states, “This is a unique opportunity to build the RTFKT brand and we are excited to benefit from Nike’s foundational strength and expertise to build the communities we love.
Luxury Fashion Brands
Besides, Adidas and Nike other companies have noticed that individuals are paying more for their lives in virtual worlds. Luxury brands like Louis Vuitton and Burberry stepped into the metaverse in the summer of 2021 with Louis Vuitton launching a mobile video game where players collect NFTs as they follow the brand’s mascot (see video). Burberry has also participated by releasing limited-edition characters with exclusive monogram skins.
In 2022, luxury fashion brands are expanding into the metaverse with more immersive experiences like a virtual Fashion Week with catwalks shows, after-parties, and exclusive fashion exhibitions. In a Bloomberg article Mark Ellwood notes that “any company with decades of archival designs can convert that intellectual property into a new revenue stream, reissuing pieces as metaverse-only … with minimal investment.” In other words, the launch of these high-end digital designs has high-profit margins and accelerates consumer interest with exclusive games, events, and avatar skins and accessories.
NFTs Raise Revenues or The Metaverse Fortune
When consumers drifted toward malls, brands follow. When consumers gravitated toward e-commerce, brands followed. And now that consumers are gravitating toward Web 3.0, digitally aboriginal brands follow, providing even more legality to NFTs.
The opportunities in the Metaverse are boundless, and brands are expanding more into the digital space.
These NFT brand cases illustrate important intellectual property principles important to entrepreneurs, technology startups, small businesses, and digital media companies looking to protect their digital assets.
Having foundational knowledge about NFT law, and/ or consulting with an experienced branding and technology startup attorney, to maximize your legal brand protection strategies is one of the best things you can do to set up your brand for success in the Metaverse and Web 3.0.