The power of gaming influencers

“Brands are coming up with some creative solutions because the pandemic is persistent, and fashion is something that is so close to our identities,” said Bryana Kortendick, Enjin’s VP of operations and communications. “You can snap a photo of yourself wearing your Atari-branded NFTs [1].

Some of the industry’s top luxury brands are ready, and one market they’re likely to break into is non-fungible tokens, or NFTs. There are two categories of Tokens: Fungible Token (FT) and Non-Fungible Token (NFT). We touched on this last week but just to refresh your memory, here is a quick reminder:

The main characteristic of fungible tokens is that they are interchangeable and divisible. Tokens like Bitcoin, Ethereum, and Cortex are considered as fungible tokens, as well as various tokens in the cryptocurrency exchanges. As for non-fungible tokens, it contains something unique and is therefore not replicable. This unique aspect is written inside the metadata of the token itself and can be seen as a permanent, unalterable certificate of authenticity. It is particularly useful as proof of asset or ownership [2].

Ian Rogers, who now works for cryptocurrency firm Ledger but remains a consultant to LVMH, said NFTs have clear applications in luxury. While makers of high-end goods justify their high price-tags by pointing to their pricey materials and craftsmanship, these traits are only part of their value. “Luxury is the business of building identity,” Rogers said. “You don’t buy a luxury handbag because of its incredible utility. You buy it because the brand has built culture, and that culture is something you want to be a part of. [2]

A question that remains to be answered is how much consumers will spend on NFTs for high-end fashion. Skeptics are already pointing to NFTs as a bubble waiting to burst. And one reason more shoppers don’t buy cheap counterfeits rather than genuine goods is because fakes are rarely the same quality. If you can easily get an exact copy of a digital item, how much incentive is there to shell out for an NFT?

The popularity of gaming influencers is another big reason why brands are keen to get involved. As seen with the Louis Vuitton and Riot Games partnership for League of Legends’ 2019 Summoner’s Cup, which was eventually won by the Chinese team FunPlus Phoenix (FPX). According to WWD, the championship final drew in a massive 99.6 million unique viewers, giving Louis Vuitton unprecedented reach.

The level of engagement seen in gaming also means that brands can forge genuine connections with fans. Twitch broke viewership records in Q2 2020, reaching a total of 5 billion hours watched [3]. This high level of intense viewership means that a partnership with a gaming influencer doesn’t just mean a single Instagram post or one-off video, but the opportunity for a brand to capture the attention of millions of eyes tuning into daily streams.

While making money might sound exciting to a gamer influencer, they have to pay attention as many legal regulations in the U.S. and abroad appeared in the past couple of years. The rules have focused on protecting consumers from deceptive advertising. It means that if a gamer influencer misinforms a potential consumer or is silent on the source of their gifts, this may be deemed ‘deceptive’ practices, and fines may follow.

Discuss

• What do you think of this phenomenon consumers spending on NFTs for luxury fashion?
• Do you think it’s a bubble or a real opportunity for those who will master it?

Participate in the discussion with your peers in the comments below.

References:
1. https://techcrunch.com/2021/03/22/nfts-could-bridge-video-games-and-the-fashion-industry/
2. What is NFT? https://medium.com/cortexlabs/what-is-ntf-da442a7d2728
3. https://guce.techcrunch.com/copyConsent?sessionId=3_cc-session_935d673e-5115-4abb-90ab-e62b5b3355c4&lang=en-US