Esports arena: how new tech is making esports and luxury goods unlikely partners

Although at first glance they may not seem to have much in common, the luxury goods and esports industries are not as far apart as you would think. In fact, we’re starting to see more and more partnerships between the two spring up. For instance, back in 2019 Louis Vuitton created a trophy case for the League of Legends World Championship. One key reason for this is audiences. The demographic for both luxury goods and esports is getting younger; from February 2021 to February 2022 Gen Z and Millennial luxury purchases made up 60% and 63% of the total luxury market sales respectively. Alongside physical experiences, this younger, digital native audience often expects digital experiences alongside physical ones. However, luxury brands often struggle with e-commerce and online experiences, as traditional luxury audiences tend to have a disconnect with digital services. This is where esports has the upper hand. Already based in the digital world, esports brands have a naturally deeper understanding of digital audiences and, as such, are already offering meaningful digital experiences.

The luxury industry can learn a lot from the esports industry’s approach to new technology and new technologies like blockchain are bringing the two sectors together in surprising ways. Luxury goods brands can look to esports not only for partnerships, but for guidance and inspiration on how to innovate to engage new audiences and create alternate revenue streams.

Luxury collecting

NFTs – blockchain-based digital collectibles that cannot be forged, replicated or destroyed – have fast been becoming major offerings for a number of esports companies. For instance, esports teams have been offering NFT versions of players, such as in the case of esports firm ‘MegaFans’ launching its own NFT collection. Luxury brands are also beginning to create these offerings. From Balmain’s Barbie NFTs to Tag Heuer’s NFT displaying watches, swathes of brands are looking to create their own NFTs. However, simply creating NFTs may not be enough to engage digital audiences; luxury brands need to look to engage these audiences in the spaces they already exist in. This is where esports can come in.

One way that esports and luxury brands are becoming unlikely partners is through NFT partnerships using blockchain technology. Luxury brands can offer players and customers alike wearable NFTs within popular games. For example, Epic Games worked with Balenciaga to introduce new skins to Fortnite, which players could then wear in the game. Wearable NFTs could even be customisable versions of designer items, which could look like the purchaser’s name being included somewhere on the NFT. Not only can this increase customer engagement, but looking to esports means luxury brands can expand their audiences to new areas.

Playing to win in the virtual world

The metaverse – a type of digital universe – is something that esports companies and teams are already well across. From the launch of the world’s first player-owned esports metaverse arena to the 47 million active users in Roblox’s digital universe, the metaverse means that esports can become even more global, allowing huge audiences to watch tournaments and games, and interact with teams in new ways.

Luxury brands and esports’ unlikely partnership is especially concentrated in the metaverse. There have already been several examples of luxury brands embarking on metaverse projects. For instance, Gucci partnered with 10KTF, an NFT project that includes a virtual floating “New Tokyo” world to create ‘Gucci Grail’ NFTs within the metaverse, a collection of NFT looks inspired by collections from Gucci’s creative director, Alessandro Michele. Using the metaverse means that luxury goods can engage with new global audiences, particularly when it comes to younger generations.

Combining luxury and esports within the metaverse is something that can benefit both industries, creating a more global customer base for both, and letting luxury brands gain digital experience. This is something we saw when Louis Vuitton launched an adventure game in the metaverse, where players collected NFTs as they progressed through the game. Combining luxury goods with esports means that brands can create a global network of old and new customers, as well as opening up new revenue streams in the virtual world, and that esports can leverage existing luxury customer bases to grow the industry.

Esports teams working with luxury brands for metaverse offerings could even be tied in with blockchain-based digital product passports, which let customers see the origins and resale information about the product they are purchasing. Incorporating these product passports into NFTs, such as NFTs created as part of esports partnerships, would not only let customers see that they are buying legitimate luxury products, but can also help to foster a whole new resale market within the metaverse for teams and brands.

Luxury goods and esports, although not related on a surface level, are both taking notice of innovative new technologies like blockchain in order to engage customers and fans. Luxury goods brands can look to esports for inspiration for NFT and metaverse offerings, letting them reach new corners of the world – both physical and digital.

Lars Rensing is CEO and co-founder of enterprise blockchain services provider Protokol. He has more than four years’ experience in the blockchain industry, helping to lead and co-found Ark; the open-source blockchain platform which underpins Protokol’s blockchain services. He is passionate about helping everyone from startups to enterprises unlock the opportunities of blockchain technology for their business, and as a result currently also serves as an adviser for a number of startups leveraging blockchain technology. He leads the overall strategy and direction for Protokol, which is helping businesses across the world solve real challenges though custom blockchain solutions.