We describe a route to the development of novel PtNiN core-shell catalysts with low Pt content shell and inexpensive NiN core having high activity and stability for the oxygen reduction reaction (ORR). The PtNiN synthesis involves nitriding Ni nanoparticles and simultaneously encapsulating it by 2-4 monolayer-thick Pt shell. The experimental data and the density functional theory calculations indicate nitride has the bifunctional effect that facilitates formation of the core-shell structures and improves the performance of the Pt shell by inducing both geometric and electronic effects. Synthesis of inexpensive NiN cores opens up possibilities for designing of various transition metal nitride based core-shell nanoparticles for a wide range of applications in energy conversion processes.