Reports

    'Games are the social networks of the future': LVMH and Gucci have taken note

    Gen Z consumers are moving from traditional games to user-generated content games like Roblox. LVMH, Gucci, and Balenciaga lead the pack for luxury activations on these gaming platforms.
    Gen Z consumers are moving from traditional games to user-generated content games like Roblox. LVMH, Gucci, and Balenciaga lead the pack for luxury activations on these gaming platforms. Image: LVMH
    Tanya Van GastelTech Correspondent
      Published   in Technology

    Today’s Gen Z consumers are shifting from traditional games to user-generated content (UGC) games like Roblox and Fortnite. UGC games allow users to create their own content and experiences, which appeals to Gen Z's desire for creativity and self-expression.

    The interactive component of UGC gaming has led more brands to embrace these platforms. Video game advertising spending in the US nearly doubled from 3.1 billion in 2019 to 5.8 billion in 2022, according to Statista. Brands like Gucci, Balenciaga, and Louis Vuitton are leading the pack in terms of luxury activations on virtual platforms.

    “There’s a clear correlation between Gen Z’s favorite fashion brands and the number of activations they’ve done,” says a new report by metaverse intelligence platform Geeiq titled "The State of Virtual Brand Experiences." Moreover, 75 percent of Roblox users said they plan to spend money on digital fashion, according to the 2022 Metaverse Fashion Trends Report.

    Social networks of the future#

    "We live in an attention economy where brands are increasingly looking at virtual environments as a means to capture this attention, and build new communities around their values, and open up new revenue streams. These environments are a natural evolution of print, TV, radio, and later social media, elevating traditional brand engagement to a new, deeper, and immersive form of interaction,” says Geeiq CEO and co-founder Charles Hambro.

    In June this year, LVMH announced a partnership with Fornite’s parent company, Epic Games, to develop immersive customer experiences and integrate new 3D technology tools into its design process. The parent company of Louis Vuitton and Dior shared that the partners would use various tools from Epic's arsenal, including Unreal Engine real-time 3D creation technology and Reality Capture for 3D modeling.

    LVMH announced a partnership with Epic Games to offer experiences like virtual fitting rooms and fashions shows. Image: LVMH
    LVMH announced a partnership with Epic Games to offer experiences like virtual fitting rooms and fashions shows. Image: LVMH

    Additionally, LVMH will employ Epic Games' Twinmotion and MetaHuman technology to establish virtual fitting rooms and fashion shows and create 360-degree product displays, augmented reality (AR) experiences, and digital replicas of physical items.

    “The partnership with Epic Games will accelerate our expertise in 3D tools and ecosystems, from the creation of new collections to ad campaigns and to our maisons’ websites. We will also engage more effectively with young generations who are very much at ease with these codes and uses,” said LVMH group managing director Antonio Belloni.

    In 2021, Gucci's Roblox-based Gucci Garden attracted 19 million visitors in its initial fortnight, according to McKinsey, while Balenciaga's Fortnite collaboration introduced its virtual collection to gamers. These platforms, with their large user bases, provide an avenue for luxury brands to connect with Gen Z consumers. In May 2022, Gucci enhanced its presence on Roblox by creating a “Gucci Town” world on the platform.

    The number of new branded virtual experiences continues to grow. Image: Geeiq’s "The State of Virtual Brand Experiences" report
    The number of new branded virtual experiences continues to grow. Image: Geeiq’s "The State of Virtual Brand Experiences" report

    The number of new virtual brand experiences, as well as persistent experiences like Roblox’ “Gucci Town," will continue to grow, reaching new heights in 2023, according to Geeiq’s report.

    “Games are the social networks of the future. Our strategy is to help players make new friends, build their social networks, and create community. In-game social experiences were rolled out in FIFA 23. Among players that interacted with the new feature set, engagement increased over 150 percent,” writes Andrew Wilson, CEO of video game publisher EA, which has launched best-selling games like the Sims, in Geeiq’s report.

    “Games are the social networks of the future. Our strategy is to help players make new friends, build their social networks, and create community. In-game social experiences were rolled out in FIFA 23. Among players that interacted with the new feature set, engagement increased over 150 percent."

    The top platforms are Roblox, Minecraft, and Fornite, with Roblox boasting over 200 million monthly active users (MAUs). Minecraft, another popular world-building game, has almost 180 million active users while Fornite boasts 70 million.

    Roblox, Minecraft, and Fornite are the top UGC platforms in the West. Image: Geeiq’s "The State of Virtual Brand Experiences" report
    Roblox, Minecraft, and Fornite are the top UGC platforms in the West. Image: Geeiq’s "The State of Virtual Brand Experiences" report

    Apple jumps on board with ‘mixed reality’ headset#

    Moreover, Apple is expected to launch its own “mixed reality” (MR) headset in the first quarter of 2024. The headset will provide a more immersive and interactive experience than current VR headsets.

    The fashion and apparel industry stands to benefit from Apple’s latest release as the MR headset will be integrated within the wider Apple ecosystem.

    Luxury brands can prepare for the launch of Apple's upcoming headset by developing metaverse activations that are specifically designed for the platform. For example, brands could develop virtual worlds or experiences that can only be accessed using Apple's headset.

    “The Vision Pro unlocks a new dimension of interactivity that is not possible in existing AR solutions," Matt Robison, founder of marketing agency Robotproof, told media outlet Digiday. “And if brands and marketers are looking to stand out, they should consider how to use this interactivity to engage users.”

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