Luxury scarcity, multiple approaches
Starting tomorrow, Burberry will issue in-game NFTs through a series of drops. Burberry gets proceeds from every sale, and a percentage of every secondary sale among players of Blankos Block Party, who can set the price at whatever they wish. The Burberry Blanko and accessories will be available in the in-game store and the game’s webstore starting 11 August, priced from $24.99 to to $299.99, all with limited quantities or time availabilities. It is offering a total of 30 free NFTs, as 10 editions of three designs each, awarded to players of its newly developed mobile game “Louis the Game”.
Louis Vuitton worked with events startup Wenew to create the NFTs, which are minted from the Louis Vuitton Ethereum wallet. Burberry is entering the space by pricing and selling NFTs through a platform that has a built-in audience and is inherently designed around the concept of buying and trading NFTs. Attaching value to items risks seeing that value deteriorate and takes a bet that players will pay for Burberry-designed wares. By giving away a very limited supply of free NFTs, it doesn’t risk price sensitivity, but is banking on only hype as a measure of success.
For the 30 people who do win an Louis Vuitton NFT, the NFTs can’t be withdrawn until January 2022, so the brand misses out on the potential for immediate secondary market sales that often come with soaring values. These different approaches illustrate the nascency, complexity and potential opportunity of luxury fashion NFTs, even when anchored through the concept of a game. “Gaming has been part of our thinking for a few years now,” says Rachel Waller, Burberry’s global vice president of channel innovation, whose job it is to explore new ways to show up for the consumer. She points to Burberry’s Shenzhen store that opened a year ago, which created a “social retail” concept to reward consumers for engaging with the brand, both online and in store, and included animated animal characters.
Gaming is a passion for the luxury consumers that Burberry is interested in, Waller says. The goal was to create items that felt on-brand while taking advantage of the perks of digital clothing, according to Waller. Now that happens in the digital world, where you show off the cool item you purchased,” says Rudy Koch, `Mythical Games co-founder and SVP of business development. Because of this, Koch says, digital spaces have become venues for brands, artists and musicians.
Previously, traditional game assets didn’t include the concept of scarcity. “We have reached a perfect storm of a combination of trends that have collided, and NFTs have come in and ignited it all. Koch says that, since the Burberry partnership was originally teased in June, Mythical Games has been “getting bombarded” with interest from luxury brands.
Precedents and complications
Superplastic virtual characaters Janky and Guggimon have modelled Gucci , and Superplastic has also tapped artists to create NFTs auctioned by Christie’s, including this one by Trevor Andrew, known as Gucci Ghost.
Similar to real-world collectibles, Blankos Block Party items come in a digital box, with owners having to make the choice of opening it and using it in the game to “level up,” or leave it boxed to retain value. Some players buy more than one of the same item for this reason, Koch says, just as one might do with sneakers or physical collectibles. If Burberry items are resold, Burberry would benefit. In July, “virtual influencer” company Superplastic, whose digital toy-like characters wear digital Balenciaga, Louis Vuitton and Gucci, hosted two NFT drops, which ultimately sold out and garnered more than $5 million.
Individual digital luxury items are also being created, sold and resold at a profit in other spaces. In May, Gucci created an experience on Roblox that sold limited-edition digital accessories. Creating NFTs is complicated, which is why gaming partnerships make sense, Roberts-Islam says. For example, Louis Vuitton’s NFTs were also temporarily available for people to register to win on Wenew’s website, but that page is no longer accessible on its homepage.
Of course, for brands like Louis Vuitton, Gucci and Burberry, participating in the cultural zeitgeist might be more valuable than immediate monetary gain, as former chief digital officer of LVMH Ian Rogers recently told Vogue Business.
The original article was published by Vogue Business « Why games became luxury fashion’s NFT on-ramp » August10th, 2021