The worlds of high fashion and video games may seem worlds apart. However, in recent years, luxury fashion houses have been collaborating with video game companies and launching major marketing campaigns in virtual worlds. There are several reasons why haute couture brands like Louis Vuitton, Gucci, and Balenciaga are venturing into the gaming industry.
Increased Brand Awareness Among Younger Demographics
One of the main motivations for luxury fashion brands partnering with video games is to raise brand awareness among younger demographics like Millennials and Gen Z.
Gen Z and Millennials are Major Gaming Demographics
According to Newzoo, in 2021, there were an estimated 3 billion gamers worldwide. Importantly, Gen Z (ages 18-25) and Millennials (ages 26-35) make up a significant portion of gamers globally.
In the US alone, a Deloitte survey found that around 70% of Millennials and Gen Z play video games at least weekly, compared to only 45% of Gen X (ages 36-50). As the younger generations increasingly become luxury brands’ key target markets, fashion houses are realizing they need a presence in the gaming world to reach this demographic.
Young Gamers are Future Luxury Consumers
While young gamers may not have the disposable income right now to purchase luxury fashion items, fashion brands aim to build desirability and loyalty with this audience from a young age. As Business of Fashion notes:
“Younger generations represent the future of the luxury consumer. By engaging them early on in immersive, digital experiences in the virtual worlds where they spend so much of their time, luxury brands hope to foster longer-term relationships.”
By partnering with popular games played by Millennials and Gen Z, fashion houses can expose their brands to millions of potential future customers.
Digital Marketing and New Revenue Streams
As traditional advertising becomes less effective with younger audiences, luxury brands are exploring innovative digital marketing and monetization models through video games.
In-Game Advertising and Product Placement
In-game advertising offers a unique opportunity for luxury brands to expose players to their products and messaging by integrating them directly into the game environment.
For example, brands like Burberry, Puma and Nike have partnered with Tencent games to have their products and logos appear within hit mobile games like Honor of Kings. Players can dress their in-game avatars in branded clothing or access other digitally branded content.
According to market research firm L2, over 75% of luxury brands have already experimented with in-game placements in China.
| Benefits of In-Game Advertising for Fashion Brands |
|---|
| – Targeted reach to lucrative gaming demographics |
| – Higher brand recall than traditional ads |
| – Viral marketing potential |
| – Consumer data and engagement analytics |
Virtual Merchandising and Limited Edition Items
Fashion brands are also generating revenue through creating virtual branded items that players can purchase for their avatars, such as limited edition skins and accessories.
Luxury brand Balenciaga launched a capsule collection within Fortnite in 2021. The in-game merchandise was only available for a limited time, driving demand and exclusivity.
Some collaborations take virtual designs into the real world, with physical merchandise created based on in-game items. This integrates the gaming community into the traditional fashion cycle.
| Advantages of Virtual Merchandising for Fashion Houses |
|---|
| – Higher profit margins than physical retail |
| – Direct access to lucrative gaming audience |
| – Buzz and exclusivity around limited editions |
| – Blurring lines between virtual and real worlds |
According to Morgan Stanley, the in-game apparel market could be worth $7-10 billion by 2025. As profit margins for luxury brands decrease, virtual goods represent a growing revenue stream.
Enhanced Brand Image and Values
Collaborating with video games provides an opportunity for fashion houses to refresh their brand image for younger generations.
Connecting with Younger Values
Gen Z and Millennials care about brands embracing causes like diversity and sustainability. Partnering with games allows luxury brands to highlight values important to younger consumers.
For example, Burberry’s partnership with Honor of Kings focused on promoting creativity and self-expression. The game has also committed to carbon neutrality. This aligns with Burberry’s goals to engage socially-conscious consumers.
As younger generations increasingly scrutinize brand ethics, gaming collaborations allow fashion houses to signal shared values credibly.
Cultivating a Cool, Modern Image
Video games have permeated mainstream youth culture and are seen as trendy. By entering virtual worlds, luxury brands can cultivate a more modern, relevant image.
For traditionally upscale fashion houses, gaming is an avenue to become more relatable and youth-centric.
Brands also leverage the creativity and customization aspects of games. Fendi created a capsule collection for Genshin Impact, inspired by the game’s fantasy world. This highlights the brand’s creative spirit beyond haute couture.
Challenges and Considerations
However, collaborating with video games does pose some challenges for luxury fashion brands to consider:
- Reaching the right gamer demographics – not all games attract their target markets
- Avoiding credibility issues or brand dilution – brands must find appropriate games that align with their positioning
- Managing the complexity of virtual design – digital fashions require different design thinking
- New competition – more brands entering gaming leads to clutter
- Quantifying return on investment – hard to accurately measure impact on physical sales
Brands need to carefully evaluate games, identify shared values, and develop innovative virtual offerings. With the right strategy, integrating gaming and luxury fashion can be a winning combination.
Conclusion
Video games offer vast opportunities for luxury fashion brands to deepen engagement with Millennial and Gen Z demographics. By advertising in popular virtual worlds, developing branded in-game items, and forming authentic partnerships, fashion houses can increase revenue while also presenting a more modern, socially conscious image.
However, brands must carefully select games, promote inclusiveness, and measure results to avoid diluting exclusivity or credibility. As CyberGhost’s post highlights, collaborations like Louis Vuitton with League of Legends and Balenciaga with Fortnite garner millions of views and impressions. When executed thoughtfully, these partnerships have tremendous potential to drive brand awareness and sales.
Overall, the intersection of high fashion and gaming is likely to only grow in the coming years as younger generations become key luxury consumers. By embracing fresh channels like gaming, luxury fashion can remain culturally relevant, engage new generations, and pioneer creative new business models. With strategic vision and commitment to their heritage, brands can thrive at the innovative intersection of technology and style.
