NFTs: Bridging Video Games and Fashion

The Emerging Role of NFTs in the Fashion Industry

Non-fungible tokens (NFTs) are introducing innovative methods for consumers to acquire, showcase, and exchange fashion items within the digital realm. With many traditional fashion events now reduced in scale or transitioning to virtual formats, NFTs are poised to become a significant asset for the industry.

Celebrity Influence and Brand Adoption

Given the substantial profitability observed in NFTs created by prominent figures and their associated teams, it’s logical that both music companies, fashion houses, and individual designers are actively exploring the NFT market. Recently, RTFKT Studios, a sneaker brand, successfully generated $3.1 million within just seven minutes through the sale of digital collectibles.

In December 2020, Enjin, an NFT startup, collaborated with The Fabricant, a fashion house based in the Netherlands, to launch a virtual clothing collection. Furthermore, established fashion brands are leveraging NFTs for promotional activities within virtual environments such as Minecraft, alongside various Atari and Microsoft video games.

The Intersection of Identity and Digital Fashion

“Brands are developing inventive strategies due to the ongoing pandemic, recognizing that fashion is deeply intertwined with personal identity,” explains Bryana Kortendick, VP of operations and communications at Enjin. “Users will be able to share images of themselves adorned with their Atari-branded NFTs, and even wear them within video game settings.”

Future Possibilities and the Evolution of Digital Art

Beeple, a prominent figure in the NFT space, envisions a future where fashion NFTs can be exchanged for corresponding physical items in retail locations, particularly within the luxury sector, citing his previous work with Louis Vuitton as an example.

“NFTs present novel and compelling connections to clothing,” he stated. “This development will be recognized as a pivotal moment in the history of digital art, representing a continuation of artistic practices that began decades ago with computer-generated art distributed online.”

NFTs as Representations of Physical Garments

Fashion designers, such as Schirin Negahbani, are already crafting NFTs that correspond to tangible clothing items. The record-breaking sales figures achieved by multimillion-dollar NFTs have prompted discussions regarding the influence of speculative trading on this trend.

Collectibles vs. Investments

Textile designer Amber J. Dickinson advocates for viewing fashionable NFTs primarily as collectible pieces of fashion history, rather than solely as speculative investment opportunities. “I see an NFT as a collectible element of a garment’s legacy,” says Dickinson, known for her hand-made silk scarves and collaborations with Alexander McQueen. “My purchasing decisions are based on personal appreciation, regardless of whether the art is digital or physical; I don’t approach it from an investor’s perspective.”

Differing Perspectives on NFT Value

While Dickinson holds this view, many fashion enthusiasts favor investing in assets like Birkin bags and may adopt a different approach to NFTs. Platforms like DIGITALAX, a crypto fashion platform, are being developed with extensive trading functionalities.

Dickinson is actively seeking a community of digitally-minded artists on Twitter. “There’s an overabundance of fast fashion, and consumers aren’t encouraged to cherish individual items or styles,” she observes. “I hope NFTs will foster a renewed appreciation for fashion pieces. People already collect shoes, don’t they?”

A Measured Approach to NFT Creation

Dickinson plans to launch her first NFTs in 2021, utilizing fundraising to support the production of her printed silk scarf collection. She acknowledges the process is slow, citing her unfamiliarity with the technology and uncertainty regarding the optimal platform for connecting with collectors, rather than traders. She intentionally avoids rushing into the NFT hype.

“My return to Twitter was directly inspired by the NFT movement,” Dickinson explains. “It provides valuable access to a community of artists, and it’s about identifying the appropriate audience.”

The Expansion into Gaming for Brands

Luxury brands, such as Gucci, are actively investigating avenues to connect with new demographics through popular video game platforms like Roblox and Animal Crossing. Ben Heidorn, CTO of Blockade Games, posits that NFTs represent the subsequent phase in this ongoing development.

“Our vision includes a fashion collection with corresponding digital representations, potentially showcased during events like New York Fashion Week,” Heidorn explained. “We are planning regular expansion releases, similar to those seen in Magic the Gathering – new content every few months. These will incorporate quests, storylines, and all the engaging elements that appeal to gaming enthusiasts.”

Marguerite deCourcelle, CEO of Blockade Games, is a prominent figure in the cryptocurrency space, known for her distinctive style. Consequently, Heidorn indicated the company is considering the creation of physical apparel mirroring the in-game items available to players. The startup has already generated over $252,000 since 2019 through NFT sales for Neon District, their role-playing game.

A key advantage of NFTs for some gamers lies in the ability to maintain ownership and utilize items across multiple games and applications, unlike traditional in-game assets. This capability is central to the value proposition of NFTs, effectively linking virtual fashion with the broader gaming ecosystem.

“The game itself is accessible without any cost. Purchases are optional, primarily to accelerate progress. We also anticipate earning a small commission from secondary market transactions, a common practice within the NFT space,” Heidorn stated.

Specifically, a significant number of NFT companies distribute a portion of peer-to-peer sales occurring on their platforms back to the original creator. For example, if a player acquires a character with unique clothing within a game and subsequently sells it to another player for $25, Blockade Games would receive a small percentage of that transaction.

“This represents a fundamental shift in the economic model of gaming,” Heidorn emphasized. “Game design must adapt to ensure accessibility and enjoyment for all players, regardless of their financial resources.”

• NFTs offer ownership and portability of digital assets.
• Brands are leveraging games like Roblox and Animal Crossing for audience reach.
• A new economic model is emerging in gaming through secondary sales revenue.

The Impact of Gas Prices on NFTs and Technological Hurdles

A significant technical obstacle continues to impede the growth of the NFT economy, according to Kortendick. This challenge stems from the exceptionally high transaction fees on Ethereum, a consequence of the inherent difficulties in scaling decentralized blockchain networks.

Gas fees represent a substantial expense for NFT artists. Vector Meldrew reports allocating as much as 10% of his monthly earnings to Ethereum transaction costs. He strategically times transactions to coincide with periods of lower fees, treating them as a necessary business expenditure.

Several NFT companies are proactively addressing this issue. Enjin and Blockade Games, for example, provide proprietary solutions, allowing users to bypass the complexities and costs associated with the Ethereum blockchain layer.

Users can leverage custodial solutions like the Matic Network to engage with games such as Neon District without incurring Ethereum’s high fees, Heidorn explained. Furthermore, Enjin’s JumpNet offers users a choice: transact freely within the Enjin ecosystem or utilize the Ethereum blockchain and pay the corresponding transaction fees.

Developers benefit from the ability to mint NFTs without cost. Users can then trade and transact freely within the system. Should they desire to transfer assets back to the Ethereum blockchain, a transaction fee will then apply.

These fees present a barrier for emerging creators like Dickinson, who often operate with limited startup capital and face uncertainty regarding the optimal platforms for reaching their target audience. An NFT representing a wearable garment, usable across diverse environments – both physical and virtual – holds greater value than one confined to a single platform.

Dickinson notes the complexity introduced by varying fees across different platforms. She views NFTs as a potential crowdfunding tool that can also enhance the appeal of her physical designs. “Navigating these intricacies is proving challenging,” she stated.

Enjin’s current focus is on developing internal solutions to facilitate interoperability. The goal is to provide users with access to a wide range of blockchains and gaming platforms. This will enable NFTs to deliver genuine, practical benefits, functioning as digital vouchers for events and physical merchandise.

Anna Karenina, a fashion designer based in Kyiv, is already pioneering this approach by offering crowdfunding tokens to attendees of her fashion shows. The concept of NFT-based fashion show tickets is therefore a logical extension.

“Providing physical access and establishing genuine membership are key,” Kortendick emphasized. “This represents the future trajectory of these tokens.”