I just love Wikipedia
“Shirts and Skins refers to the practice of the members of one athletic team in a competition of two removing their shirts for easy identification in the absence of uniforms. This simple form of recognition is a regular sight in Streetball, Street football, ultimate, or any other pickup games. It is almost totally exclusive to men’s teams, though, owing to the taboo in many western cultures against the display of the female breast.
In all likelihood, the practice has probably existed as long as there has been a need to quickly differentiate between members of two opposing teams.
With a newer version of playing Shirts and Skins games, the teams will play as normal, but then the losing team’s members will receive ‘nipple cripples’ or ‘purple nurples’. This is more painful to the skins team than the shirts.”