On June 1, 2023, EA Sports and Nike announced a new collaboration that will bring select virtual assets created by .Swoosh, Nike’s Web3 marketplace platform, to future EA Sports titles. The deal will see “virtual creations” from Nike’s .Swoosh platform integrated into future EA Sports games, according to a press release from the sportswear giant.
.Swoosh is Nike’s Web3 platform that allows users to buy, sell, and trade digital sneakers and apparel as non-fungible tokens (NFTs). NFTs are unique digital tokens that represent ownership of digital assets on a blockchain. Nike launched .Swoosh in November 2021, after acquiring RTFKT, a popular NFT studio that specializes in virtual sneakers.
Nike’s first “Virtual Sneaker Drop” — featuring “digital renditions” of the company’s iconic Air Force 1 line — reached over $1 million in sales to early beta users in less than a week, according to CoinDesk. The company said that its virtual apparel could eventually be equipped in video games and “other immersive experiences” when it launched .Swoosh.
The partnership with EA Sports seems to fulfill that promise, as it will allow players to “express their personal style through play” and provide them with “unique new opportunities for self-expression and creativity through sport and style”, according to Nike. No specific games have been mentioned yet, but future EA Sports releases like EA FC (which is set to replace the FIFA brand name) are likely candidates for Nike’s collectible NFT “wearables”.
The announcement comes at a time when the NFT market has been in steady decline for several months, and previous attempts to integrate blockchain collectibles into video games haven’t been well received by gamers. For example, Ubisoft’s “Quartz Digits” platform, which launched in December 2021, was met with backlash from fans who criticized it for being exploitative, wasteful, and unnecessary. Ubisoft eventually shut down the platform in March 2022, citing “low demand” and “technical challenges”.
However, EA Sports and Nike seem to think that their partnership can make gaming NFTs work this time, by tapping into the interest from a dedicated sneakerhead market and leveraging their established brands. As Kyle Orland from Ars Technica writes, “Nike is already an established brand with legions of sneakerheads that follow its every move. And those fans have already shown at least some willingness to invest in digital swag bearing Nike’s iconic swoosh”.
Moreover, Nike’s NFTs could become even more valuable to fans if they can be used to unlock digital drip in EA Sports titles, and potentially other games as well. As Orland notes, “these kinds of ‘real-world clothing’ cosmetics also seem like the kind of items that could be relatively easy for other developers and publishers to integrate into their own games (unlike Ubisoft’s awkward, serial-numbered virtual items)”. That could create a virtuous cycle where support from more games leads to more interest in Nike’s NFTs, which in turn leads more game makers to sign on.
Of course, there are still many challenges and uncertainties ahead for this partnership. For one thing, neither company has provided much information regarding how. Swoosh NFTs will integrate into future EA Sports titles, or what benefits they will offer to players. Will they be purely cosmetic items, or will they have some gameplay effects? Will they be exclusive to certain games or platforms, or will they be interoperable across different properties? Will they be accessible to all players or only to those who own the NFTs?
Another issue is the environmental impact of NFTs, which has been a major concern for many critics and consumers. NFTs are typically minted and traded on the Ethereum blockchain, which uses a proof-of-work (PoW) consensus mechanism that consumes a lot of energy and generates a lot of carbon emissions. According to Digiconomist , Ethereum’s annual energy consumption is currently equivalent to that of Chile. Although Ethereum is planning to transition to a more eco-friendly proof-of-stake (PoS) mechanism soon, it is unclear when that will happen or how it will affect the existing NFTs.
Finally, there is the question of whether gamers will actually care about owning NFTs in their games. As we have seen with Ubisoft’s failed experiment, many gamers are not interested in paying extra money for digital items that have no real value or utility beyond their scarcity. Moreover, many gamers are wary of the potential security risks, legal issues , and ethical dilemmas associated with NFTs. For example, some NFTs have been accused of plagiarizing or stealing artwork from other creators, while others have been used for money laundering or tax evasion.
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Is NFT gaming a trend or a fad?
The partnership between EA Sports and Nike is not an isolated case. In fact, it is part of a larger trend of NFT gaming that has emerged in recent years. According to a report by NonFungible.com , the total sales volume of NFT gaming increased by 629% from 2019 to 2020, reaching over $500 million. Some of the most popular NFT games include Axie Infinity , CryptoKitties , Decentraland , Sorare , and The Sandbox .
NFT gaming is not only attracting gamers, but also investors, developers, artists, celebrities, and brands. For example, Square Enix, one of the largest gaming companies in the world, has announced its first NFT game, called Symbiogenesis, which will feature collectible creatures that can evolve and interact with each other. Other major gaming companies that have expressed interest or involvement in NFT gaming include Konami, Epic Games, Capcom, Atari, Sega, Bandai Namco, and Activision Blizzard.
NFT gaming is also creating new opportunities for innovation and experimentation in the gaming industry. For instance , some NFT games are adopting novel business models such as play-to-earn (P2E) or move-to-earn (M2E) , which reward players for their time and effort spent in the game with cryptocurrency or NFTs. Examples of P2E games include Axie Infinity , Alien Worlds , Gods Unchained , and Splinterlands . Examples of M2E games include Bored Ape Yacht Club Adventure Game , CryptoMotors Racing League , and Wilder World .
NFT gaming is also enabling new forms of creativity and expression for both game developers and players. For example , some NFT games allow players to create their own content and sell it as NFTs on the game’s marketplace. Examples of such games include The Sandbox , Decentraland , Somnium Space , Blankos Block Party , and My Neighbor Alice . Other NFT games allow players to customize their avatars or characters with unique NFT items or skins. Examples of such games include CryptoKitties , CryptoPunks , Bored Ape Yacht Club , Zed Run , NBA Top Shot , and Sorare .
Therefore , it seems that NFT gaming is not just a fad , but a trend that is here to stay. As Matthieu Nadini et al. write in their study on NFT gaming : “We anticipate that these findings will stimulate further research on NFT production , adoption , and trading in different contexts “. NFT gaming is not only changing the way we play games , but also the way we value them.
What are the impacts of NFT gaming?
NFT gaming has various impacts on different aspects of the gaming industry and beyond. Here are some of them:
Economic impact: NFT gaming creates new sources of income for both game developers and players. Game developers can monetize their creations by selling them as NFTs or receiving royalties from secondary markets. Players can earn money by playing games that reward them with cryptocurrency or NFTs, or by selling their own NFTs on marketplaces. This can empower players to become more financially independent and incentivize them to spend more time and money on games.
Social impact: NFT gaming fosters new forms of social interaction and community building among gamers. Players can share their achievements, collections, creations, and opinions with other players through various platforms such as Discord, Twitter, Reddit, etc. Players can also join guilds or clans that cooperate or compete with each other in various games. Moreover, players can express their identity and personality through their avatars or characters that are customized with unique NFT items or skins.
Environmental impact: NFT gaming raises concerns about its environmental impact due to its reliance on blockchain technology. Blockchain technology uses a lot of energy and generates a lot of carbon emissions due to its consensus mechanism that requires intensive computation power. According to Digiconomist , Ethereum’s annual energy consumption is currently equivalent to that of Chile. This poses a threat to the sustainability of NFT gaming and its social acceptance.
Legal impact: NFT gaming poses challenges for the legal framework that regulates the gaming industry. For example , who owns the intellectual property rights of the digital assets associated with NFTs? How are taxes applied to the transactions involving cryptocurrency or NFTs? How are disputes resolved between buyers and sellers of NFTs? How are consumer protection laws enforced for NFT gamers? These are some of the questions that need clear answers from lawmakers and regulators.
Ethical impact: NFT gaming raises ethical issues regarding its social responsibility and accountability. For example , how are fairness and equality ensured among players who have different access or resources to acquire or use NFTs? How are diversity and inclusion promoted among players who come from different backgrounds or cultures? How are harmful or illegal content prevented or removed from NFT platforms? How are privacy and security protected for players who share their personal data or assets online? These are some of the questions that need careful consideration from game developers and players.
In conclusion , EA Sports and Nike’s NFT partnership is a bold move that could potentially change the game industry by creating new ways for players to express themselves and connect with their favorite brands. However , it also faces many challenges and uncertainties that could hinder its success or even backfire on its reputation. Only time will tell if this partnership will be a game changer or a game over for the industry.
The partnership is a collaboration that will bring select virtual assets created by .Swoosh, Nike’s Web3 marketplace platform, to future EA Sports titles.