The fashion exec’s guide to gaming

This article on gaming is part of our Advanced Membership package. To enjoy unlimited access to The Long View from Vogue Business and bi-monthly Market Insights Reports and webinars, sign up for Advanced Membership here. Gaming has emerged from fashion’s periphery to the forefront of innovation in just a few years. It’s seen as a direct line to Gen Z — much in the way social media was to millennials — and the potential extends beyond marketing. Video game platforms and their audiences provide a potential new revenue stream thanks to the popularity of digital fashion and beauty, and serve as a dress rehearsal for the metaverse. For fashion and beauty executives, having a gaming strategy is key to understanding how to attract the next generation of consumers, who are still establishing brand affinities. Ninety per cent of Gen Z consumers in the US play games and virtual worlds, and they spend more time every day on Roblox than on TikTok, spending an average of up to two hours daily on the metaverse gaming platform. And it’s not just brand awareness. Players socialise with friends and express their personal identities in-game by changing their clothes and experimenting with how they look — making in-game shopping big business. In 2021, three-fourths of gaming revenue went to in-game purchases of virtual goods. The gaming industry is expected to reach anywhere from $300 billion to $665 billion by 2030, up from $200 billion last year. Through that lens, it’s unsurprising that fashion and apparel have led the charge on brand activations within games, according to data from gaming insights startup Geeiq; in the next two years, beauty and retail are expected to grow. Louis Vuitton, Dior and Gucci, the top three brands in the Vogue Business Index, have all introduced wildly different gaming appearances, which illustrates the existing diversity of the space: Louis Vuitton has designed in-game outfits, called skins, for League of Legends players and developed its own gaming app; Dior designed a vintage digital car to go along with Dior avatar outfits for racing game Gran Turismo 7. Gucci, the most present luxury brand in the gaming sphere, has developed multiple worlds in platforms including Roblox, Zepeto and The Sandbox, and has seeded its own (physical) gaming academy. As the industry finds its footing, the state of play is changing. Multiplayer games and user-generated content (UGC) have become the norm, while limited-edition items and blockchain-based assets are on the rise. Mixed reality hardware and software are next, as “gamification” expands to mainstream venues outside of traditional games. Already, the definition is changing. “Games have started to take the UGC model from social media, where users upload 3D content, which has turned gaming into this weird mix of future social media,” Geeiq CEO Charles Hambro says, leading to a new categorisation of some games. “I would now call it immersive social media.” Although gaming is still an emerging technology for many in the fashion and beauty industries, for many consumers, it’s a normal way of life. As Hollywood stylist Kate Young told Vogue Business — she is advising a company that designs in-game fashion — for the younger generation, “it’s not even the space of the future — it’s the space now”. Table of Contents New marketing and social channel Various approaches for different goals Identity, avatars and cultural relevance Revenue and gameplay is expanding Gallery: A timeline of gaming Brands consider gaming a marketing channel to rival the relevance of social media among new generations who shop and socialise in these virtual spaces. A recent Roblox study shows that three out of four Gen Z say wearing digital fashion from a recognised brand in virtual spaces is important to them, especially for the 22 to 27-year-olds, says Roblox chief partnerships officer Christina Wootton. Eighty-four per cent say that they are likely to consider trying a brand in the physical world after trying it virtually, and that their physical clothing choices are inspired by their avatar’s style. “Brands understand that games are the third ‘place’ (after home and school) for many Gen Z and Gen Alpha kids and these kids will be their most important customers in the coming decades,” says Colleen Sullivan, co-head of ventures at Brevan Howard Digital. That’s why her broad definition of gaming encompasses social networks, “digital theme parks”, and venues for brand loyalty programmes and direct-to-avatar commerce. Brands must navigate the unique cultures within each gaming platform in order to resonate. “Gamers in Roblox, The Sandbox and Fortnite have different communities and capabilities,” Sullivan notes. Hambro says that Roblox tends to be more about socialising, while Fortnite places more emphasis on games. Zepeto is perhaps the most social — players often take avatar selfies — and The Sandbox is for a slightly older demographic who appreciates NFTs. And Second Life, notes Kate Young, is for people who want to wear the digital versions of their “going out” clothes. Strategies for success include deferring to the culture of the endemic community and emphasising storytelling. The rules of engagement are different, says Angelic Vendette, who spearheaded the creation of an Alo Yoga Roblox, and emphasis should be on interactivity and immersion rather than simply “visibility”. “The key lies in crafting genuinely engaging content and experiences that resonate with gamers, which is quite different from traditional modes of advertising. If a brand fails to provide a compelling reason for gamers to interact with it within the game, it becomes irrelevant in that rapidly evolving digital arena.” This has been a key lesson for Gucci, which as early as 2019 began testing a range of platforms including Tennis Clash, The Sims, Genies, Roblox, Pokémon Go and Animal Crossing, in addition to its own Gucci Arcade and Sneaker Garage. Gucci most recently participated in Roblox, Zepeto, The Sandbox, Otherside and QQ. “Storytelling is what keeps everything together,” Gucci VP of Metaverse Ventures Micael Barilaro says, adding that it’s important to enter new communities by “listening before making noise”. Brands can use gaming to educate consumers on their history and ethos. Clinique created a virtual lab modelled on a physical beauty counter, with the brand’s trademark elements magnified to convey product education and brand history. Elizabethiz Nolan, Clinique SVP and global creative director notes that traditional e-commerce product pages and social media have limitations that this new medium pushes past. Ralph Lauren, meanwhile, has recreated historic designs in Zepeto, Roblox and Fortnite, offering a new approach to digital “time travel”. “The ability to be able to go from something [created] 200 years in the past to shoot forward in the future is very inspiring and exciting,” said David Lauren, Ralph Lauren’s chief branding and innovation officer, of the brand’s new Fortnite island featuring historic items. Louis Vuitton created its own gaming app, Louis: The Game, where players were challenged to gather details about the brand’s origins, its namesake founder’s life and its trunks dating back 200 years. Gucci’s Gucci Cosmos experience in The Sandbox was a digital version of a physical exhibit exploring the brand’s history, while its ongoing Gucci Town in Roblox is updated to reflect new campaigns. “Gucci isn’t in games for giggles and to hang out with pre-teens; they’re there because they know that to get to the next 100 years; the biggest risk is taking no risk,” Sullivan says. Finally, all this engagement means data. “Gaming’s interactive nature isn’t just engaging — it’s a powerful tool for gathering deep insights into consumer behaviours, preferences and trends,” Vendette says. Alo has appeared in The Sandbox, Decentraland, Zepeto, its own virtual reality store and in Roblox, where its “Alo Sanctuary” has seen about 99 million visits. Learn more: Gucci’s gaming strategy, Zepeto, Roblox, Gen Z and gaming Brands have options, as they weigh how to get involved in gaming worlds. They can integrate into an existing game with a pop-up or short-term branded experience; they can create their own gamified environment in an existing platform (like Fortnite’s “islands”); or they can create their own stand-alone branded destination through an app or website. Each has perks and trade-offs in terms of audience, required effort, brand control and access to data. Hambro compares an integration to doing an influencer campaign on social media, as it taps into an existing community. It takes less work but the brand relinquishes control. A Nike integration into Zepeto’s “Hangang Park” destination saw 35 million total visits, Geeiq reports, and a Hugo Boss integration into Super NFL Tycoon in Roblox, where players could “unlock” a Boss x NFL hoodie for 20 teams, saw 15 million visits. L’Oréal’s integration in Roblox’s Livetopia has seen more than four billion total visits. Building a branded environment within a gaming world, known as a “persistent experience”, is more like setting up an Instagram profile. For example, Gucci Garden was a two-week Roblox pop-up, but Gucci Town is a persistent experience. Longevity helps drive affinity, but the burden of creating content to satisfy followers remains squarely with the brand. The “owned world” category, like Louis: The Game, does not come with a leverageable community. This would be akin to creating a standalone brand website or app, with the advantage being access to all the data and total control over the space. How do brands evaluate which is the right one for them? “It’s a very boring answer,” Hambro says. The same old marketing rules apply. “It depends on what your objective is. Marketing 101 is, ‘What are you trying to accomplish?’ Based on that, it will lead to a certain path.” Learn more: Fortnite islands, Roblox marketplace, branded games The burgeoning market of virtual goods that exists on gaming platforms “offers new modes of self-expression for Gen Z, whose digital personas are increasingly important to showcasing their identity”, Vendette says. Fashion and beauty products play an outsized role because an avatar’s appearance works overtime in communicating player personalities; players can customise and change details in a way that isn’t possible with one’s physical appearance. Hair, skin tone and body type can all be altered as quickly as a pair of shoes. Roblox has found that for more than half of Gen Z, styling their avatar is more important to them than styling themselves in the physical world. Half of Roblox’s Gen Z users change their avatar’s clothing every week: one in five daily active Roblox users update their avatars on any given day, including the body, face and accessories. In 2023, total avatar updates on Roblox grew 38 per cent to 165 billion. “Because of early engagement in games, these generations are used to creating their own avatars and expect customisation in all their digital interactions,” Sullivan says. Gen Z’s interest in avatar makeup and hairstyles offers an opportunity for beauty brands: 91 per cent say that hair is important to feeling represented and overmore than half believe that makeup helps complement beauty in the virtual spaces, Roblox’s survey found. Beauty brands to appear on Roblox in the last year include L’Oréal, Nyx and Givenchy Beauty. Nars Colour Quest, open for just a small period of time on Roblox, attracted more than 40 million visits, and provided data that players crave limited-edition items, says Dina Fierro, SVP of the Web3 and metaverse group at Shiseido. According to Geeiq data from the first half of 2023, about 9 per cent of brand activations were personal care and cosmetics; this is expected to grow 179 per cent by 2025. Representation in gaming needs further development and attention (like in the metaverse), as technology progresses, questions around diversity and identity arise. Brands need to factor diversity and inclusion into their gaming strategies in order to properly reflect the communities on these platforms, which extends to religious garments and mobility devices and hair and skin choices for avatars. Personal care brand Dove partnered with Open Source Afro Hair Library to create a guide for coding afro-textured hair styles within games, while the Institute of Digital Fashion partnered with 3D design tool Daz3D to reimagine avatar body type diversity. Players take their in-game identities seriously. Avatar representation affects player mental health, Roblox has found, with 88 per cent saying that expressing themselves in immersive spaces has helped them do so in the physical world, including building connections with others, boosting confidence and helping mental health. It’s also inspired them in everything from changing their hairstyle (37 per cent) to becoming more comfortable in gender-fluid clothing (29 per cent) — all nuances that brands should consider when entering the space. Learn more: Gen Z and identity, avatar identities, beauty and representation Beyond marketing, gaming comes with new potential revenue streams for the brands that invest in these platforms and players. Digital goods that can be bought in-game, including traditional items (clothing, accessories, cosmetics) and new categories (such as wings and special movements, called “emotes”), do not cost more money to replicate, meaning the cost of 1,000 units is the same as the cost of one and they also can be produced quickly, with no shipping delays. (That’s why a digital Carolina Herrera gown was sold and worn on Roblox the exact same day that it appeared at New York Fashion Week; the digital version was 500 Robux, or about $5, before rising to thousands in the resale market.) The cost of digital goods, however, are far less than their physical counterparts, often costing less than $10. Brands can turn influencer and celebrity looks into shoppable pieces for gamers. Wearing celebrity looks isn’t that far-fetched; Dundas has translated some of its most high-profile celebrity looks, like pieces worn by Beyonce and Emily Ratajkowski, into popular items on Roblox. Dundas co-founder Evangelo Bousis says that digitising an item designed by namesake designer Peter Dundas, and selling it on Roblox’s avatar marketplace, is a way to extend unique pieces beyond just the celebrity photographs. The opportunity to create user-generated content has led to an industry of emerging digital designers who specialise in these virtual worlds — the most successful can make more than $1 million a year. The number of digital clothing designers on Roblox has grown to more than 13 million, according to the company. Because of their knowledge and influence in the space, early adopter brands have partnered with these creators to lend credibility to their presence. Gucci tapped creator Rush Vanguard to make a pair of wings in Roblox, while Jonathan Simkhai tapped Blueberry to digitise designs for a fashion show in Second Life. Karlie Kloss hired Rush Bogan when creating her Roblox world, and Elton John tapped 20 designers to create designs inspired by his body of work. (One limited-edition earring sold more than 5,700 units in the few hours it was available.) Nars Cosmetics invited community creators to replicate some of its well-known makeup artist looks. Gaming platforms have various approaches to user-generated content, including selling digital goods and sharing revenue with creators. Roblox is perhaps the most advanced in terms of enabling brands to monetise digital goods. Brands can sell products directly within their own experiences to keep 70 per cent of the revenue, or in the Avatar Store to keep 30 per cent; the benefit of the Avatar Store is that it potentially attracts more visibility with less legwork. Dundas, for example, only sells its digital goods in the store, while Gucci tends to sell theirs within Gucci Town. Roblox also enables something called “limiteds”, which are items limited in quantity or time available — these are the only items that players can independently price and resell, although brands do not make revenue on second-hand sales. Recently, electronic music artist Monstercat set a record with a single necklace that sold for the equivalent of $10,000 in less than 10 minutes, setting a new precedent for a brand in terms of value. Fortnite is less robust concerning transparent brand monetisation. Parent company Epic Games has not revealed how, or if, any revenue is shared when a brand, such as Balenciaga or Moncler, sells skins on Fortnite, including within their own branded islands. While revenue sharing isn’t as automated as on Roblox, Epic’s “Creator Economy 2.0” plan gives 40 per cent of Fortnite’s net revenue to creators based on details such as island popularity, engagement, retention and attracting new players. Hambro anticipates that Roblox’s plans to enable “real world” commerce — meaning the selling of physical goods — within Roblox by 2025 will have a major impact, and that brands who already have an active community will have an advantage. Then, he says, those engaged minutes “are gold dust”. Another future anticipated development is the ability to sell, or link, physical goods within gaming environments. Mobile game Drest already enables players to click-out to buy physical versions of digital in-game fashion and beauty, and some brands during Metaverse Fashion Week experimented with this technology. Ralph Lauren has twinning items for Fortnite, including a pair of digital boots with a limited-edition physical counterpart. Gucci sold a phygital “Koda Pendant” necklace that is linked to an NFT and corresponds with a digital version in Otherside, an emerging Web3 gaming platform. Forever21, which licences its metaverse exploration to an external developer, has offered e-commerce customers the option to upgrade their purchase with a corresponding Roblox outfit, and a popular digital-only beanie ultimately led to the brand producing the beanie physically — suggesting an emerging form of market research. “Data enables brands to predict when or how a product is worn, track emerging trends and tailor products and marketing strategies,” Vendette says. Burberry’s partnership with Web3 game Blankos Block Party offered an early look at games that sell higher-value assets as NFTs, which enables brands and creators to continue to earn revenue when items are resold, and enables players to maintain ownership of assets outside of the game. For its first drop in 2021, Burberry sold all 750 of the available $299.99 characters in less than 30 seconds, and sold at least $375,000 worth of NFTs in two minutes. Outside of gaming worlds, brands are adding gamification using augmented reality, including in-store AR mirrors and Pokémon-style treasure hunts. Nike has offered an AR mirror that uses gameplay to award in-store discounts, while Aglet has encouraged players to visit physical Hogan stores to claim special rewards, including a free pair of socks. Even avatars on social media and SMS, such as those from Bitmoji, Meta platforms and Apple’s iMessage have climbed out of gaming and into early versions of the metaverse. Speaking of the metaverse, popular gaming platforms are seen as a precursor, as “gaming platform” and “metaverse world” are increasingly blurred distinctions. Finally, a new category of store aims to blend gaming and traditional e-commerce. Virtual stores are three-dimensional, immersive shoppable worlds that live on dedicated, standalone e-commerce pages. Brands are increasingly borrowing from the world of gaming to find success, including incentivised treasure hunts and other challenges that build brand affinity — and enable visitors to buy physical goods. “Gamification has become a must-have for anyone selling through e-commerce,” says Neha Singh, CEO of Obsess, a tech company that has built virtual stores for J.Crew, Ralph Lauren, Charlotte Tilbury and Elizabeth Arden. She says that gaming-fluent consumers expect their digital interactions to be visual, immersive and play-centric, and that virtual stores have become a focal point for brand gaming strategies, since they mimic the fundamentals of gaming while allowing brands to remain in control. Gamified shopping leads to increased online sales for 77 per cent of brands that have invested in it, according to a survey of 150 brands and retailers, conducted by Obsess in partnership with Coresight Research. Additionally, 88 per cent of surveyed brands that invested in virtual stores saw an uplift in their overall sales. The state of play is likely to change again soon, as smart glasses and mixed reality headsets further blend digital hallmarks unto the physical worlds. Vendette anticipates that the expansion of AR and VR in gaming will bring more immersive experiences. This “isn’t just about better graphics or more interactive gameplay”, she says. “It’s about creating a more profound, lifelike connection between the digital and physical worlds.” Learn more: Roblox selling strategies, Epic Games expansion, virtual stores, tech company avatars For the past four years, brands have increasingly played with games and gaming. To receive the Vogue Business newsletter, sign up here. Comments, questions or feedback? Email us at feedback@voguebusiness.com.

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