The Big Idea: Virtual Madness
The digital basketball hoop is an avatar for our times, in large part because it is, quite literally, an avatar. There is no consumer good as perfectly Veblenian as branded virtual sportswear: digitally rendered ankles no more need digitally rendered support than virtual pets need food. Virtual. And yet in April, Nike, in collaboration with RTFKT, the NFT collectibles brand acquired by the sportswear giant four months prior, released a digital iteration of its popular Dunk sneaker; within hours, examples of virtual shoes were listed on the OpenSea market for an average price of 3 Ethereum, or around $9,000.
For those who didn’t grow up in the game – a demographic that is shrinking by the day – it’s easy to overlook how profoundly this industry has transformed and exponentially expanded the retail universe. . Globally, gaming is bigger than streaming music and movies combined, and most of its revenue comes not from the titles themselves, but from in-game purchases in those worlds, virtual weapons, and from land to tools, toys and transport. Entire generations have now grown up socializing and spending lavishly in massive multiplayer online games. Is it any wonder that branded virtual gear has ended up on digital shelves?
It’s easy to be cynical about intangibles, but cynicism misses the point. Shared virtual worlds – collectively called the metaverse – are a major economy whether you’ve visited or not, no different than Macau. And after luxury companies largely sniffed the need for a digital presence during the advent of Internet 2.0 only to find themselves catching up over the next decade, they won’t be caught off guard again, especially when is about connecting. with the coveted, spendthrift young consumer who otherwise might not stumble upon their wares in real life. Right now, digital collectibles, whether NFTs or limited-edition in-game purchases, are a frictionless, supply chain-proof opportunity to transform the brand stamp in revenue, and as with all collectibles, from vintage cameras to classic shotguns, value is not based on utility but on what the market deems it to be.
So while the idea of, say, a branded virtual surfboard might sound silly, consider that many would say the same of a mechanical watch in the age of smartphones. What matters is the demand, and the urge for luxury branded digital products is not only real, but important and set to become more so. Companies used to making products for the physical world must find a way to meet this demand if they want to stay relevant.
Plus, it’s not like digital crafting doesn’t exist, as anyone who’s seen the difference between clunky and hyper-realistic CGI can attest. And after two years of pandemic-induced remote interactions, the idea of mainstream virtual gatherings isn’t so far-fetched anymore. Which begs the question: when it comes time for your virtual offsite atop meticulously replicated Courchevel, do you plan on showing up with the same generic digital skis as everyone else, or a pair of beautifully rendered Zai Spadas? ?