Luxury retail and video games: The unlikely partnership set to explode this year

Luxury retail and the video games industry are set to become increasingly intertwined as high-end brands find new ways to “engage and excite millennials”.

According to a new report from investment banking giant Jefferies, luxury brands are set to drive this unlikely partnership forward over the coming years as they seek to capitalise on the increasingly lucrative market.

It argues that the current gaming demographic represent the next generation of luxury consumers, with 46 per cent of the world’s active gamers already spending money in-game.

China is the number one games market in the world accounting for 25 per cent of the market, and Jefferies expects the Chinese cluster to account for 80 per cent growth in the luxury industry in 2020.

READ MORE: Burberry launches its first video game B Bounce

This is encouraging brands to find ways to overlap the demographics of luxury and gaming, as well as the millions who watch live esports events via live-stream channels like Twitch.

Brands such as Prada and Louis Vuitton have already collaborated with huge gaming franchises, with the latter releasing a range of both physical and ingame products with League of Legends, as well as sponsoring a tournament watched by more than 100 million fans.

“We believe that there are many other games which have similar characteristics to League of Legends such as Fortnite and which would also be a prime candidate for sponsorship of tournaments and skins,” Jefferies said.

Fashion games like Drest, in which players take on the role of a fashion stylist, have also seen over 100 brands licence their designs to appear in-app.

READ MORE: Puma partners with world’s first shoppable styling game Drest

Numerous luxury brands have also tried their hand at producing their own branded video games.

Burberry recently launched their second branded game Ratberry to coincide with the Chinese New Year, Gucci added Gucci Arcade to its app last year featuring a range of games, and Louis Vuitton launched Endless Runner on both mobile and desktop.

By offering real-world prizes as Burberry’s first game B Bounce did in 2019, brands are able to encourage engagement and store traffic.

“We also think that sponsorships are likely to avoid shooter games in present day settings and/or containing graphic violence, given the potential for negative brand impact,” the report continued.

“Innovation in the gaming industry is constant and new releases take share of both time/wallet so there is significant scope for new opportunities in the future.”

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