[Metaverse Masterclass] How Luxury Fashion broke into the Metaverse

“Metaverse Masterclass” is a series of reports, articles and interviews from experts around different topics in Metaverse. This is an article by Laura Pan, originally appeared in Resilience of Luxury Companies in Times of Change

Demna Gvasalia, the current creative director of Balenciaga, belongs to a new wave of creative directors that includes Kim Jones at Christian Dior, Matthew Williams at Givenchy, and Virgil Abloh at Louis Vuitton, all of them hand-picked by the leaders of luxury conglomerates to bring new life to heritage brands. Gvasalia, the founder of the cult streetwear brand Vetements, has always been very forward thinking, and in a class of his own. His appointment as creative director of famed couture house Balenciaga in 2015, came as a surprise as it was thought to indicate that Kering SA owner Francios Henri-Pinault could be trying to catch on to the streetwear trend. However, Gvasalia has proven that tearing up the rule book can be both innovative and profitable. In the 6 years at the helm of Balenciaga, Gvasalia had brought so much value to the maison, that it overtook Gucci as the most search brand in 2021, according to Lyst. All of this was attributed to Gvasalia’s out of the box ideas, which caught the attention of Meta (formerly Facebook) in a tweet; days after the announcement of its rebranding, by asking Balenciaga for dress code in the Metaverse.

(Screenshot from Twitter, Meta Oct 29, 2021)

It all started in 2020, when fashion companies were looking for innovative ways to showcase their upcoming collections. While most brands resorted to the classic livestream fashion shows, Balenciaga announced that it will show its fall/winter 2021 collection as a fully interactive video game. Gvasalia and his team at Balenciaga created an online role-playing game (RPG) titled Afterworld: The Age of Tomorrow, where players take a journey into a dystopic world set in New York in the year 2032. Attendees of the fashion show were able to follow the main character as they explore the realm. The character follows the illuminated arrows through a series of zones, and encounters non-playable characters (NPC) — models wearing the latest collection. This digital realm mimics game play, where you move from one level to the next, with each level designed according to a different theme. What Balenciaga created was out of this world, or rather a parallel universe where reality meets virtual reality. The show was an astounding success, as it resonated deeply with its target audience because they now believed the brand truly understood what was relatable to them.

(screenshot from YouTube, Balenciaga Dec 8, 2020)

Luxury fashion has always been about pushing the limits of creativity and finding newer ways to engage with the end customer, but Gvasalia found a revolutionary format to showcase that creativity while connecting with Balenciaga’s target audience. The dystopia Balenciaga created for Afterworld demonstrated how digital realms (Metaverse) can offer a kind of escape. This was the first taste of the potential fashion and luxury brands have in the metaverse.

Since 2020 has been a time of great distress; with many of us facing new feelings of constraint and isolation. It is games like Nintendo’s Animal Crossing that transported players away from their mundane zoom meetings and daunting housework to another world. More than a distraction, Animal Crossing allowed people to travel vicariously to different islands and socialize with friends from all over the world. Players were able to connect both on Nintendo’s online platform as well as Discord to have a full experience, e.g.: I would be playing my character in Italy, and visiting my sister’s island, but she was physically located in Australia. It also gave players the opportunity to dress up in designer clothing as a way to express themselves freely. While fashion and gaming collaborations are not new, cue EA Games’ The Sims and their collaborations with H&M and Moschino in 2007 and 2019, respectively. It is the ability to connect with one another, not only online but through other platforms such as social media, forums and livechats that has allowed a kind of synergy between fashion and gaming. Still, today only a handful of brands have ventured into this segment, most notably Louis Vuitton and League of Legends for the 2019 World Championship held in Paris. Other brands slowly followed suit, starting with Valentino and Marc Jacobs with Animal Crossing, Gucci and Pokemon Go, and more recently Balenciaga and Moncler for Fortnite.

Luxury brands’ late entry into the gaming sector was not a lack of vision, but rather the lack of complimentary between the two industries. Many would assume that fashion could only exist in dress-up games, yet they have completely neglected the profitable skins segment on all online games’ platforms. According to Forbes, 69% of Fortnite players spend money on the game (Fortnite is actually free to play, but you can buy battle passes which offers more bonuses during the gameplay), and the average expenditure per player is about US$85.In 2018, almost 60% of Fortnite’s revenue came directly from skins. It wasn’t until 2021, when brands such as Ferrari, Balenciaga and Moncler decided to be part of the Fortnite repertoire. Even then, it was Louis Vuitton that pioneered luxury’s entry into esports. The brand had been involved with sports in the past — since 2010 it has designed the trophy case for the FIFA World Cup — so its 2019 announcement that it would be creating the case for that year’s League of Legends World Championship in Paris should have come as no surprise. After all, Louis Vuitton was known for its unexpected collaborations, teaming up with cult streetwear brand Supreme in 2017. This time, it worked with Riot Games (the developer of League of Legends) to dress hip-hop group True Damage in Louis Vuitton skins for their opening ceremony performance at the championship. Following the success of this alliance, Louis Vuitton created a League of Legends capsule collection of 40 pieces designed by womenswear creative director Nicolas Ghesquière.

(Source: Louisvuitton.com, Nov 14, 2019)

League of Legends is one of the most-played multiplayer games, with around 115 million monthly players worldwide. It is also the most-played game in esports worldwide. The esports industry is worth US$950 million as of 2020 and is predicted to reach US$1.6 billion by 2023, according to Statista.This is a huge opportunity for luxury brands, considering the vast exposure it provides. Unlike any other platform, the esports stage has a dedicated and concentrated viewership composed of people of all ages and various financial backgrounds. More recently, we are seeing a rise in newfound wealth among gamers and live streamers. Current estimates suggest that top streamers earn upwards of US$500,000 a month, potentially outpacing high earners in traditional career paths. In April 2020, in the middle of the global pandemic lockdown, Travis Scott, an American rapper, drew a crowd of 27 million players to a digital live show on Fortnite’s platform. On the day of the show, Fortnite offered unique skins that could only be purchased prior to attending the live concert.

Even till this day, players of Fortnite are complaining about missing out on the skin and upset that it was never made available again. It was because of this, Fortnite restructured their strategy with Ariana Grande’s Rift Tour which was held from the 6th — 8th August 2021 over several time slots.

(Screenshot of actual game play on Fortnite, Aug 6, 2021)

Ariana Grande’s rift tour was the perfect example of what the Metaverse could hold for fashion and luxury. Minutes before the show, players have the opportunity to choose and purchase skins and emotes. Then as players wait in the lobby before being transported to the concert, player could connect with one another either through their Discord Group, private calls or livestream to discuss or provide commentary of the events. Now, imagine if this was a virtual fashion show — just like the one Balenciaga did in November 2020. It would really transport all of us, not just the fashion influencers, celebrities, and journalist, into the metaverse to experience the brand-new collection.