Kuki AI modelling an NFT by digital designer Yekaterina Burmatnova featuring a Pinar & Viola x Google Daydream print at Crypto Fashion Week | Source: Yekaterina Burmatnova

NFTs and the Metaverse: The Next Lucrative Market for Luxury brands

Is the metaverse the next lucrative luxury market for high-end brands?

Investment banking company Morgan Stanley recently said luxury-branded non-fungible tokens could become a A$78.65 billion market by 2030. Its analysts reported the NFT market is set to reach US$337 billion by 2030, with digital collectibles from luxury brands making up 8 per cent of the space by that time.

Although in 2021, they estimated luxury NFTs only account for less than 1 per cent of the transaction value – indicating it could be a slow process.

The metaverse will likely take many years to develop; however, NFTs and social gaming present two nearer-term opportunities for luxury brands

And we’re already in the midst of luxury brands expanding into the gaming world – first to mind is Balenciaga collaborating with Fortnite.

Tim Sweeney, CEO of Epic Games Inc., which makes Fortnite, said in November that the metaverse has the potential to become a multitrillion-dollar part of the world economy.

Over the coming decades, the metaverse has the potential to become a multitrillion-dollar part of the world economy.

balenciaga fortnite
Balenciaga joins Fortnite in the online world | Source: GQ

Burberry and Louis Vuitton have also jumped into the world of NFT potential through the avenue of online gaming. Burberry, in partnership with Mythical Games launched an NFT collection back in August within the multiplayer game Blankos Block Party – reportedly selling out in 30 seconds.

As part of it’s 200th anniversary celebrations, Louis Vuitton began awarding its first NFTs to players of Louis the Game on 14 August. The French fashion house also created an exclusive capsule collection for the League of Legends universe.

Louis vuitton league of legends
Louis Vuitton x League of Legends Collection | Source: Luxe Fetch

Other luxury brands and designers are also creating pieces for the virtual world or ‘skins’ – digital outfits and accessories that gamers can buy for their avatar. North Face and Gucci released digital iterations of its recent read-to-wear collection and a virtual Gucci bag sold for more as an in-game accessory on online gamine platform Roblox than the real world bag.

In the upper echelon, one of the world’s most sought-after watches entered the digital realm when Patek Philippe digitised its Nautilus as an NFT. Dolce & Gabbana broke records in September when it sold nine NFTs for A$7.94 million.

The sportswear world is certainly not sitting this movement out. Only a few days ago sportswear giant Nike made its move into the metaverse with the acquisition of London-based NFT studio, RTFKT.

The first Patek NFT
The first Patek NFT | Source: PRNewsfoto/SM-ART

This growing digital demand for these products is fuelling dedicated marketplaces.

Websites like The Dematerialised are now solely geared towards the trading of digital fashion NFTs that will never enter the material world. Following a similar real-world hype model, the marketplace only releases limited edition items such as bags and shoes with only a single brand or computer-designed product available at any one time.

The luxury auction house Sotheby’s is immortalising its presence online launching an NFT-only marketplace. Becoming the first high-end auction house to create this space, the famous auctioneer is looking to capitalise 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 trading volume during the third financial quarter. That’s on the back of the most expensive NFT ever sold ‘Everydays: The First 5000 Days’ fetching A$94.7 million through the auction house Christie’s.

‘Everyday’s: The First 5000 Days’ by Beeple | Source: The Verge

It seems most designer brands taking the early initiative, entering the metaverse in 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.”

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