Kuki AI models an NFT by digital designer Yekaterina Burmatnova with a Pinar & Viola x Google Daydream print at Crypto Fashion Week | Source: Yekaterina Burmatnova
Is the Metaverse the next lucrative luxury market for high-end brands?
Investment banking firm Morgan Stanley recently said that luxury-branded non-fungible tokens could become an A$78.65 billion market by 2030. Its analysts reported that the NFT market is expected to grow to A$337 billion. US dollars by 2030, with digital collectibles from luxury brands accounting for 8 percent. cent of the space at that time.
Although in 2021, they estimated that luxury NFTs were only less than 1% of the transaction value, indicating that this could be a slow process.
The metaverse will likely take many years to develop; however, NFTs and social games present two near-term opportunities for luxury brands
And we’re already in the midst of the expansion of luxury brands into the gaming world – first in mind is Balenciaga’s collaboration with Fortnite.
Tim Sweeney, CEO of Epic Games Inc., which makes Fortnitesaid in November that the metaverse has the potential to become a multi-trillion-dollar part of the global economy.
Over the next few decades, the metaverse has the potential to become a multi-trillion dollar part of the global economy.
Burberry and Louis Vuitton have also entered the world of NFT potential through online gaming. Burberry, in partnership with Mythical Games, launched an NFT collection in August in multiplayer gaming Blankos Block Party – reportedly sold out in 30 seconds.
As part of its 200th anniversary celebrations, Louis Vuitton has begun awarding its first NFTs to players of Louis the game August 14. The French fashion house has also created an exclusive capsule collection for the League of Legends universe.
Other luxury brands and designers are also creating parts for the virtual world or “skins” – digital outfits and accessories that players can purchase for their avatar. North Face and Gucci released digital iterations of its recent ready-to-wear collection and a virtual Gucci bag that sold for more as an in-game accessory on the Roblox online kidding platform than the real-world bag.
In the upper echelon, one of the most sought-after watches in the world entered the digital realm when Patek Philippe digitized its Nautilus as NFT. Dolce & Gabbana broke records in September by selling nine NFTs for A$7.94 million.
The world of sportswear is certainly not left out of this movement. Just days ago, sportswear giant Nike entered the metaverse with the acquisition of London-based NFT studio RTFKT.
This growing digital demand for these products is fueling dedicated marketplaces.
Websites like The Dematerialized are now only geared towards trading digital fashion NFTs that will never enter the material world. Following a similar real-world hype pattern, the marketplace only releases limited-edition items such as bags and shoes with one brand or computer-designed product available at a time.
Luxury auction house Sotheby’s immortalizes its online presence by launching an NFT-only marketplace. Becoming the first high-end auction house to create this space, the renowned auctioneer is looking to capitalize on the growing interest and investment in the digital art space.
According to an industry report by Dapp Radar, the NFT space generated approximately A$14.5 billion in transaction volume during the third financial quarter. It’s on the back of the most expensive NFT ever sold “Everydays: The First 5000 Days” which fetched A$94.7 million via auction house Christie’s.
It seems most of the designer brands taking the early initiative, entering the metaverse the right way, are already making money. The future growth of the online world, and how luxury brands adapt and embrace it, will determine its longevity and success. According to Forbes, “those (brands) who understand online culture, digital art, and gaming experiences will thrive in the metaverse.”