Owning a piece of immaculately detailed embroidery or stark, angular sunglasses by iconic Italian fashion brand Dolce & Gabbana is an unquestionable statement of taste, luxury, and style.
Morgan Stanley thinks putting them on an avatar of yourself will someday be, too. In fact, as a wave of companies rush to adjust their marketing (often incoherently) to get in on the “meta” craze, analysts at the US bank said Tuesday that demand for fashion and luxury brands in the so-called metaverse could reach $50 billion by 2030.
The term “metaverse” has been uttered 128 times in 2021 during investor presentations, versus a meager seven times last year, according to corporate data firm Sentieo. So It’s clear many companies believe virtual and augmented reality will play a much bigger role in people’s lives in the future — one that will include having an avatar of yourself interacting in a virtual world, where it could conceivably wear D&G sunglasses or carry a Louis Vuitton bag.
If that dream (well, nightmare) becomes reality, it will create a rapidly growing addressable market for luxury brands, according to Morgan Stanley’s analysts, who noted:
- In the gaming platform Roblox, users update their avatars every day — a sign luxury brands would have plenty of churn to feed on gaming and metaverse platforms.
- Social gaming could expand luxury brands’ total addressable market by over 10% in the next eight years and increase earnings by 25% — which would amount to $50 billion in new, real-world cash for the likes of Gucci, D&G, and Prada to battle for by 2030.
Big Bang Theory: The biggest clash, for now, will be among the tech firms developing the hardware to build the metaverse. That will create winners, too: shares in chipmakers NVIDIA and Advanced Micro Devices have surged 30% and 20% since Facebook (which changed its company name to Meta late last month) announced it plans to spend $34 billion next year on metaverse technology. Let’s just hope there’s a place in the metaverse for $5 Fruit of the Loom T-shirts.