Luxury NFTs could become a $ 56 billion market by 2030 and could see ‘dramatically’ increased demand thanks to the metaverse, says Morgan Stanley | Currency News | Financial and business news

Classic picture frame with NTF art inscription

Luxury-branded non-fungible tokens could become a $ 56 billion market by 2030 and could see “dramatically” increased demand thanks to the meta-verse, Morgan Stanley said in a note released Tuesday.

As a whole, NFTs could grow to a market of about $ 240 billion by 2030, with digital collectibles from luxury brands making up 8% of space at the time, said analysts led by Edward Stanley.

“As more aspects of people’s lives move to the Internet, the demand for digital fashion and luxury goods will increase dramatically in the coming years,” they said.

In 2021, analysts estimate that luxury NFTs will only account for less than 1% of the transaction value.

“We think that is about to change,” strategists said. “Metaverset is likely to take many years to develop, but NFTs and social gaming present two options in the short term for luxury brands.”

Web 1.0 connected people to information and Web 2.0 represented social media iteration, while Web 3.0, more commonly known as the metaverse, is “reserved for personal avatars that people can use to interact with,” they explained. And since these human representations can be styled and dressed, it gives luxury brands a “great opportunity,” they added.

The strategists set the example Roblox, an online gaming platform and creation system where every fifth player changes their avatars daily.

“Image is everything in virtual experiences,” they said. “Luxury brands explore a range of collaborations with gaming and metaverse platforms.”

Other platforms like Fortnite and the digital marketplace in Roblox already provide insight into what metaverse malls might look like, they said. Revenue shares are rising and could add $ 10 to $ 20 billion to the total addressable market for luxury NFTs.

Morgan Stanley analysts pointed out that Balenciaga launched Fortnite clothing in September 2021 at a price of 1,000 v-bucks, equivalent to approximately $ 8. In August 2021, Gucci released a digital version of the Dionysus bag on Roblox, which sold for $ 350,000 Robux, or about $ 4,115.

Among the best-exposed companies in the emergence of the meta-verse are soft luxury brands, which include ready-to-wear, leather goods, shoes, as opposed to tough luxury items, such as jewelry and watches, they said.

“We expect this to change over a relatively short time frame: although the metaverse takes some time to gain ground, the collector market should pick up speed anyway,” said strategists. “NFTs appeal to both luxury brands and consumers.”

NFTs will also open up brands for the opportunity to earn “forever” thanks to smart contracts that capture a percentage of each sale for the owner, as opposed to the physical world where profits only come from the first and first sale.

“The Metaverset will most likely allow brands to appeal to an even wider audience,” they said, adding that 13 is the average age of Roblox players, while women generate 70% of the industry’s sales. “Luxury brands will gain exposure to increasingly younger customers, and more importantly, male customers.”

Leave a Comment