Nike Picks New Head of Video Games As Virtual Efforts Accelerate – Business Insider

Nike Picks New Head of Video Games As Virtual Efforts Accelerate – Business Insider

  • Nike is ramping up its video-game efforts as part of its emerging metaverse strategy.
  • The company recently named Tommy Pham to the key role of head of video-game partnerships.
  • Nike’s recent patents include one that describes how “cryptokicks” could be worn in video games. 

 Nike is pushing harder into video games as part of its broader metaverse strategy.

While the company hasn’t publicly disclosed its plans, its patent records, job listings, inside sources, and social-media posts offer a glimpse of the sportswear giant’s new gaming ambitions.

Last month, the company named Tommy Pham its gaming partnerships manager, according to his LinkedIn profile and confirmed by people close to the matter. The position had been vacant since Hayden Walling left the company in December 2020. 

“With the ongoing interest and development in the ‘Metaverse’ space, gaming is going nowhere! It will be a crucial part of the digital consumer experience and engagement with businesses going forth,” Pham wrote in an October LinkedIn post. “Gaming will integrate with everything like immersive technologies, avatars, virtual worlds, virtual goods, NFTs, and the list goes on and on.”

Nike’s recent patents include a 2020 patent for “video game integration of cryptographically secured digital assets.” 

Pham, a self-described avid gamer and seven-year Nike veteran, is among the inventors on the patent, as well as a 2019 patent for “cryptokicks,” which offered the first peek at Nike’s virtual future.  

“Cryptokicks” are essentially virtual sneakers. If you buy a physical Nike shoe, you get a digital replica. 

The recent video-game patent builds on cryptokicks and describes a way for video-game avatars — Nike’s also received two avatar patents — to wear the virtual sneakers. The patent suggests that the rarer the virtual sneaker, the more powers it would have when worn in a video game. 

Nike and Pham did not respond to requests for comment. 

A Nike video game patent illustration.

United States Patent and Trademark Office

More than a marketing tool

Nike’s push into video games is part of its larger metaverse play. But video games seem to be a stronger bet, at least in the short term. While consumers aren’t quite ready to embrace the immersive digital reality known as the metaverse yet, they’ve proved ready to spend money inside video games.

In a September blog post, Mike Proulx, a vice president and research director at Forrester, said a recent online survey showed only 23% of US consumers want to spend time in the metaverse.

At the same time, in-game purchases and related spending accounted for 61.5% of revenue for the video-game giant Take-Two Interactive Software Inc. in the fiscal year that ended March 31, up from 44.8% the previous year and 40.1% two years ago. In the past year alone, in-game spending increased $698.7 million to $2.1 billion for the company. Industrywide, video game spending increased 27% in 2020 to $57 billion, according to NPD Group.

Take-Two Interactive is the maker of NBA 2K, Grand Theft Auto, and other popular video games. Nike is an NBA 2K partner. 

The explosive growth of spending inside video games has pushed brands to consider the medium as more than a marketing tool. The goal isn’t to have a Nike swoosh on the sideline of a virtual soccer field anymore — it’s to sell virtual shoes. 

Last month, Nike joined

Epic Games

and other investors in a financing round for LeBron James’ entertainment company SpringHill Co. The round valued the company at $725 million. Adam Sussman, a former Nike chief digital officer, is president of Epic Games. 

A Nike video game patent illustration.

United States Patent and Trademark Office

Video games are for real athletes 

This month, Pham shared on LinkedIn a Nike ad that shows the perspective of a runner wearing Snap’s new augmented-reality glasses while taking a 1-mile run through Brooklyn.

The runner sees a virtual bird wearing Nike sneakers, motivational messages from Nike, a virtual beanstalk growing out of a building, and a giant virtual yellow octopus wearing a Nike headband and holding a sign that says “Nike by Williamsburg.”

“They have been studying the bodies and movements of athletes for years,” said Tiffany Beers the head of gaming innovation at Logitech G and the former engineering director at Nike.

Beers wasn’t aware of Nike’s video game plans, but she said there are natural connections between Nike’s business and gaming. Both revolve around storytelling and competition.

She said Nike could go in a lot of directions, whether it’s interactive fitness like Peloton or Mirror, deeper product ties with eSports leagues or virtual products.

“It gets back to personal style,” she said. “In the gaming world, it’ll be just like the real world. Everybody has an individual look and style.”

Nike considers digital and virtual products a way to engage more deeply with consumers “so that they may be more engaged with a brand in the physical world,” according to the latest video-game patent. 

Walling, who previously held Pham’s job, is now head of brand partnerships for Roblox, an online gaming platform that offers in-game purchases. He still has high regard for Nike and views video games as an “incredible opportunity” for the brand — one the company has already recognized. 

“The finance department told me I was the most profitable employee at Nike because the royalties on virtual goods weren’t tied to physical sales,” he said to Insider. 

Walling said one of the challenges for Nike is overcoming the perception that video games aren’t played by athletes. Nike has always considered itself, above all, a brand for athletes. 

Walling noted that James is a known gamer, as is the tennis player Naomi Osaka.  

“Nike was conflicted and saw gaming as inauthentic to athletes because of the sedentary nature,” he said. “But for every competitive athlete, from high school to the highest levels, gaming is part of their lives.”