Although luxury brands don’t derive a lot of revenue from digital mediums right now, this could change soon, according to a research note from Morgan Stanley published last week.
Metaverse gaming and NFT’s could represent a 50 billion euro revenue opportunity for the sector by 2030.”NFTs and social gaming present two near-term opportunities for Luxury Brands, allowing them to monetise their vast IP built over decades,” the report says. Dolce & Gabbana’s sale of 9 NFTs for $5.7 million shows the huge potential for “virtual and hybrid luxury goods,” and the bank estimates that the NFT market will grow to around $300 billion by 2030. By 2030, Luxury brands could expand their total addressable market (TAM) revenue by more than 10% and industry EBIT by around 25%. Demand for NFT collectibles will lead to strong demand for luxury goods in the medium term, analysts led by Edward Stanley said in the report.Morgan Stanley notes that luxury brands are already exploring collaborations with gaming and metaverse platforms, with an increasing number of revenue share deals, and this could add $10 billion – $20 billion to the luxury sector’s TAM.Kering is best placed to take advantage of the metaverse due to the “group’s brand demographics and given head start in innovative digital collaborations.” the bank said.