Luxury goods companies don’t generate much digital revenue now, but that could change soon, according to a research note from Morgan Stanley that was published last week.
- Metaverse gaming and non-fungible tokens could represent a revenue opportunity of 50 billion euros for the luxury market by 2030, Morgan Stanley said. That would be 10% of the total addressable market.
- ”NFTs and social gaming present two near-term opportunities for luxury brands, allowing them to monetize their vast IP (intellectual property) built over decades,” the report says. Dolce & Gabbana’s sale of nine NFTs for $5.7 million last month shows the huge potential for “virtual and hybrid luxury goods,” and the bank estimates that the total NFT market will grow to around $300 billion by 2030.
- By 2030, luxury brands could expand their total addressable market by more than 10% and industry earnings before interest and taxes (EBIT) by about 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 goods companies are already exploring collaborations with gaming and metaverse platforms, with an increasing number of revenue sharing deals. The firm said that could add $10 billion to $20 billion to the luxury sector’s total addressable market.
- France-based Kering, the owner of such luxury brands as Gucci and Yves Saint Laurent, is best placed to take advantage of the metaverse because of its “brand demographics and given head start in innovative digital collaborations,” Morgan Stanley said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.