Nike closes RTFKT

& Baller League to launch into UK & US in 2025 + Sony aims to acquire Kadokawa Inc for access to Anime & Video Games library

Author

Joe Condon
December 03, 2024

Hey there - welcome back to another edition of The SEG3 Report - the second to last before SEG3 LA!

Edition #38 delves into Nike shutting down RTFKT, one of the pioneering studios in web3 & digital fashion, Baller League’s social-first launch into the UK & US, and Sony’s attempts to acquire Kadokawa to expand their anime, manga & video games library.

Contents: Edition #38

Let’s dive in!

Nike close down RTFKT

RTFKT, a (former) leading culture & gaming brand that leveraged web3, AR & game engines to deliver next generation collectibles, has announced it will be winding down its operations by January 2025.

RTFKT, founded in 2020, grew to notoriety with its CloneX collection, which eventually led to it being acquired by Nike for reportedly over $1 billion in 2021.

After the Nike acquisition, the teams launched projects like vials, MNLTH boxes, PodX, Cryptokicks, Space Drip Air Force 1’s, AR Hoodies, Forging SZN 1, a partnership with RIMOWA & Animus - many of which gave access to NFC sneakers & clothing for holders to be able to merge their physical and digital identity.

Why You Should Care

Well, if the sunsetting of .swoosh by Nike wasn’t confirmation of their current shift in focus away from NFT projects, then this certainly is.

RTFKT were undoubtedly a trailblazer who brought fashion, art and culture on-chain, with expectations extremely high about what digital fashion could look like with the backing of Nike behind them - but since the launch of Animus in late 2022, there has been relative silence, and in March of this year, there were rumours that Nike were contemplating shutting down RTFKT.

The transition from a startup environment, where the team had the license to be nimble and experimental, shipping multiple launches in a short amount of time - to a corporate environment, where there are many more moving parts, launches requiring more sign-offs and they are inherently more risk-averse - seemed to scupper their momentum.

There’ll be a lot of takes over the next few days around why the project failed, so we’ll save the speculation - but I think the interesting takeaway and learning from this lies in the community's response, and it’s what makes web3 interesting in my opinion.

1) As the assets live on-chain, there have been multiple calls for the IP to be acquired by a CTO (community take over) and run by the community / another project in the space so that it can live on and be reignited.

There is precedent for this - with Luca Netz (a SEG3 LA alumni) acquiring Pudgy Penguins and Yuga Labs acquiring Moonbirds when both projects were in distress.

The difference however being that both of these projects were owned by web3 native brands - I’m sure it would be a slightly more complex acquisition than through just a tweet this time around.

In any case, the only reason that a CTO would be contemplated is because…

2) Web3 allows you to effectively reward and incentivise consumers for their engagement, enabling you to turn them from passive supporters into superfans.

And these superfans, in RTFKTs case, who have been wholeheartedly invested into the IP - creating their own 3D assets, building local fan-groups, supporting each drop since inception - now have such a deep connection and consider it as part of their identity (digital and IRL) that they want to continue its legacy.

The only other place you see ‘fan/community takeovers’? Sports.

Cultivating a level of engagement and loyalty within just 4-5 years (that is in-line with sports fans connection built over 100’s of years and generations) shows just how effective web3 powered products and experiences can be in driving connection and building fandom.

So despite RTFKTs & Nike’s failure to effectively bottle this magic from their community, they were definitively pioneers, and who knows, it may just live on without their direct involvement one day - let’s see.

Baller League to launch into UK & US in 2025

The Baller League, a new six-a-side indoor football league blending professional players with celebrities and influencers, is launching its UK and US divisions in 2025. Building on the success of its German debut, this league aims to modernize and deliver entertaining football through innovative rules/formats and heavy involvement from creators such as KSI, Sidemen, IShowSpeed, Chunkz and more, as well as former professional athletes like Ronaldinho, Alan Shearer, Luis Figo, Robert Pires & more.

It also had a fantastic launch video…

Why you should care?

You need only read tweets on social platforms to know that fans have been pining after more authentic, fan-led content like FanZone (which is why fan channels like Arsenal Fan TV & The United Stand have amassed incredible followings), or fun experiences for them to engage with legends of the game through the likes of Masters League - so Ballers League, as well as Gerard Pique’s Kings League, seem to have heard this calling, and certainly seem to be hitting the mark in terms of delivering a product that is designed for today’s audience's needs, with Baller League reportedly achieving over 500 million impressions in its inaugural season in Germany, as well as Kings League driving over 1.3 million viewers.

Seriously impressive numbers - but what is that secret sauce that is helping them to drive this engagement from the audience?

New Formats with Entertainment & Interactivity central to the product.

In traditional sport, especially football, rules changes are met with fierce objection. Fans are vehemently against tweaks to the fabric of the game, even if it could be argued it would improve the experience. Good luck with that one Mr Arsene Wenger…

Given Baller League (& Kings League) started from scratch, they do not have to deal with that ‘heritage debt’ if you will, and instead, have full autonomy and flexibility to be able to listen to fans, and introduce features and rules that give them more input and access, whilst also contributing in upping the entertainment value - with things 15 minutes halves, power play formats, a player draft and more all part of the package.

These additions all make the game more fast paced, add more jeopardy and more access to the players and talent that the fans want to see.

And with those changes and objectives, it of course makes sense that the best fit to engage Gen Z & A where they’re consuming content - Youtube & Twitch - which will be the main distribution channels for the league.

But the bitesized nature of the product also makes it…

Built for social

Social platforms are where sporting conversations take place, and it is increasingly becoming where younger generations consume sports content too.

As per Two Circles report, which we shared a week or two back - 35% of Gen Z are building their sports knowledge through social media.

And so having the very design of the league focused towards social engagement & distribution is smart because:

1. It has short, action packed games with power play formats - which are perfect for creating highlight clips for easy consumption on TikTok, Youtube & Twitter

2. Leans on Influencer / Ex-Pro involvement - which lends credibility but also helps to instantly drive impact and eyeballs to the league without needing time to ramp up and grow their own socials for distribution

3. Focuses on Fan Involvement - with the games broadcast live on Twitch & Youtube, as well as the player draft events, the objective is clearly to drive more conversation and interactivity from fans with the league and their content, whilst making them feel more part of the direction of the sport/experience


In general, traditional sports tend to have an ageing fanbase, so there is a lot to learn here from the way Baller League have crafted the experience to focus on the combination of technology, fan interaction and social platforms - and if traditional leagues aren’t careful, new leagues like this that are more nimble and innovative in their approach to format and commercial models will eat some of their lunch.

All in all, corralling the level of talent that Baller League has around the common goal of being able to deliver an innovative, social-first football experience is to be applauded, and I look forward to seeing how it is received once the first games are broadcast in the new year. It certainly feels like it could be a mainstay for years to come!

Sony opens official negotiations to acquire Kadokawa

Sony is reportedly in talks to acquire Kadokawa Corporation, a Japanese publishing giant known for its extensive portfolio of anime, manga and gaming IPs.

Kadokawa’s assets include FromSoftware, the developer of the globally successful Elden Ring, as well as anime properties like Oshi no Ko and manga such as Delicious in Dungeon. Sony already holds a 2% stake in Kadokawa and has strengthened ties with the company over recent years, including a significant investment in 2021, but an acquisition like this would significantly strengthen Sony’s position as the home of Anime and help to accelerate their transmedia ambitions.

Why you should care

We all know that Anime, Manga & Gaming culture is currently taking over the world.

With this acquisition, Sony would gain the rights to some of the most iconic anime franchises in the world - like Sword Art Online, Delicious in Dungeon, Re:Zero, Mushoku Tensei & more, as well as FromSoftware’s Elden Ring, Bloodborne, Armored Core and others.

The communities around these IPs are incredibly active and loyal - but Kadokawa’s distribution is not as global or widespread as Sony’s, so there is still a lot of value that can be unlocked from these franchises, and with Sony’s global production and distribution capabilities, they could well be the ones that could help them to do it, through their:

Distribution:

Sony already owns Crunchyroll & Funimation, so has an audience of over 11+ million subscribers that they can instantly bring Kadokawa’s IP to and introduce them to an engaged, well-suited audience.

Film & TV Adaptations:

Through Sony Pictures, they have the opportunity to adapt Kadokawa’s most popular anime & manga into movies, series or animated films - all of which can help to grow the IPs appeal globally, which can lead to more franchising opportunities (through licensing, merchandise, brand collaborations, or even theme park crossovers - as readers of last weeks edition will know Minecraft are actively doing!).

Gaming:

Kadokawa has already had incredible success with Elden Ring, but with Sony Interactive & Playstation, Sony has the capabilities to be able to turn more of Kadokawa’s IPs into high quality games, as well as significant distribution through its playstation network to get it into the hands of gamers once launched.

Given there have been rumours of this acquisition in the works for quite a while, and the seeming potential upside for both parties, it could be a game changing tie up if it goes through - we’ll certainly be eagerly watching out for more updates and will keep you all in the loop!

In other news this week…

Working on anything cool, or have a press release you would like us to cover? Send it in for the chance for it to be covered in next week’s edition!

That’s all for now - thanks again for reading the latest edition of The SEG3 Report!

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