Virtual & Hybrid, Luxury Goods of the Future

January 7, 2022

It’s no secret that high end luxury brands all faced limitations in creating digital profit. According to a recent report by Morgan Stanley, many big names are already in the hunt for collaborations with game and metaverse platforms. Industry officials have made their excitement apparent, stating “the luxury industry is anticipating the digital profits, which by 2030 will reach up $50 billion”.

Collaborations of Gaming & Metaverse Platforms

NFT(Non-fundable token) and social gaming has expanded exponentially. Specifically, 10% in the last 8 years and is expected to contribute to a 25% EBIT(Earnings Before Interest and Taxes) growth in the future. The report also analyzed that NFT and social gaming provides two short term benefits for luxury brands which in turn creates a large amount of IP in the long term. The $5.7 million sales of 9 NFT models by Dolce & Gabbana, clearly exemplifies the future potential virtual-hybrid luxury goods. Banks estimate that the total NFT market will reach about $300 billion by 2030.

Avatars, Already a Popular Concept for Gamers

American Investment bankers all voice the same opinion; whilst the profits are not as impressive in the status quo, it promises huge potential in the future.

Undeniably, it will be time consuming to further develop metaverse, NFT and social games (e.g. online games and avatar concerts) will still provide two possible benefits for brands.

We can already witness changes. 1 in every 5 Roblox player is daily updating their avatars daily. Keeping up to this trend, luxury brands are finding creative ways to collaborate with game and metaverse platforms.

Efficient Brand Value Sharing

The recent $5.7 million NFT sales by Italian luxury fashion brand Dolce proved the future values of virtual and hybrid forms of luxury. While it is expected that that the whole brand will benefit from metaverse, more specifically, soft luxury items ( leather goods, shoes..etc) will have a stronger presence compared to hard luxury goods ( jewelry, watches..etc).

Digital items sold via metaverse commerce not only increases consumer satisfaction in relation to customer value, but it can also work as a completely different way of promoting brand value through forming contrasting price ranging with the offline market.

There is no doubt that fashion business strategies must include metaverses in the future. In this sense, new types of metaverse integrated business, in any way or from are bound to increase. “Meta”verse with its “mega” potential will be the key to fashion businesses to digitize their profits.