It's called overstimulation. There are cats out there that will only allowed pets "briefly" and will nip when they've had enough. Never play with a kitten with your hands, as they will assume it's okay.

Keep doing what you're doing. Everytime your cat nips, put him down say "NO!!!" very firmly and walk away. He should get the hint. Also keep a water spray bottle on hand. Squirt him in the chest when he gets aggressive. That should do it.

Get him lots of toys to play with that will put his attention towards appropriate behavior.

Remember, he's a baby and has alot of energy. Good luck!