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In May 2021, Gucci sold a virtual handbag as part of an exclusive Roblox event for 350,000 Robux (around $4,115). The bag is not an NFT, and can not be used outside of the game. It is simply a digital iteration of an offline product that was only available to buy once. The fact that it sold for more than the offline version – which retails at around $3,400 – is testament to the fact that digital items have taken on new value.

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People have started to understand and appreciate the economic value of digital content.

This shift has been building for some time. It’s now normal for digital creators to be remunerated for their creativity – from the uptake of paid-for newsletters to the mainstreaming of OnlyFans. And the growing amount of time spent in game worlds is translating to a desire to invest in our avatars.

But this year, digital goods have been given new value by the sudden spike in interest for NFTs: 8% of social media users globally have already invested in them. Why? Because NFTs have introduced the notion of scarcity to a digital landscape overloaded with stuff.

By ‘tokenising’ a piece of content on the blockchain, a creator is saying that they have only approved one of that piece of content. When Jack Dorsey tokenised the first ever Tweet (which later sold for $2.9 million), the person who bought it knew they were buying The Tweet – a moment in history – not just a screenshot of the tweet that came after.

Just like the status symbols of yore – buying a Rolex, buying a Porsche – buying an NFT is an act of conspicuous consumption. It’s why digital clothing has become such a success story: 33% of Gen Zers globally have purchased digital clothing or skins for their avatars. It's why industries that already trade in status are the natural early adopters in this shift.

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Investing in online goods has become the hottest way to earn clout, both online and off.

But this is the new new money. In digital economies, who gets rich isn't defined by who you know, but who you follow; investments aren’t just in digital assets, but in the communities around them. As a result, investing in virtual goods can indicate so much more than great taste or financial independence. Digital ownership is being used to signal what you believe in, show people what you love, and give a shout out to the communities you’re a part of.

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A third (0%) of Gen Zers globally say they’d consider purchasing digital art (We Are Social, 2021)

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(We Are Social, 2021)

Nothing highlights fatigue with the offline economy quite like the GameStop saga.
IN CULTURE
Economic disenfranchisement. With interest rates low, traditional banks unstable, and global wealth inequality on the rise, younger generations are frustrated with a system that often feels rigged against them. As a result, a growing number of people are looking online to risky but potentially lucrative digital investments: from crypto to NFTs.
The creator economy. Recent years have seen people begin to understand the value attached to creators’ labours: 35% of social media users globally recognise ‘social media creator’ as a skilled profession – a number that rises to 47% among Gen Z and young Millennials (18-34s). In this landscape, platforms like Patreon and OnlyFans have paved the way for a virtual economy that sees digital creativity appropriately remunerated.
Facebook's rebrand to Meta has pulled the metaverse into the public lexicon
ON PLATFORMS
The metaverse. If virtual goods are here, the metaverse is the space in which we can visit, interact with, and show off those goods. The rise of game worlds – the first rung on the metaverse ladder – has been integral to unlocking this shift.
PEOPLE ARE INVESTING IN VIRTUAL WORLDS.

On the cutting edge of digital ownership, in early 2021, artist Krista Kim sold a virtual house that can be visited via VR platform Spartial for over $500,000 (all the better to hang your NFTs in!). What this looks like for the more pedestrian user? Buying a Balenciaga hoodie to wear in Fortnite.

> @fortnitesections

> Fortnite & BALENCIAGA 👀 #fortnite #fyp #foru #fortniteclips #tiktokgaming #foryoupage #xyzbca

> ♬ Woman - Doja Cat

Balenciaga launched a clothing line that can be worn both on- and offline.
CREATORS RECLAIMING THE VALUE OF THEIR IMAGES.
In a climate where memes are actually worth cash, previously unwitting (and uncompensated) internet stars have been able to win some earnings off their viral success. The iconic ‘Disaster Girl’ meme from 2008, which depicts now-21-year-old Zoë Roth as a little girl looking gleefully back at a camera while a house burns behind her, was sold by Roth for $500,000.
Bad Luck Brian sold the NFT of his infamous school mugshot for about $36,000
FANS ARE INVESTING IN CREATORS FOR IP RIGHTS.
Some artists and creators are creating NFTs that fans can get a return on investment from. While game CryptoKitties allows owners of its NFTs to make up to $100,000 a year from commercial uses, DJ 3Lau has promised royalties to fans who own NFTs of his music.

> If you own one of my NFTs today,
> You’ll get to own rights in my music,
> Which also means you’re entitled to cashflows from that music…
> Soon.

> — ▽ (@3LAU) August 11, 2021

In 2021, owning a digital track can have tangible financial value.
We’re seeing a shift from digital content as free and accessible to digital content that’s scarce and can be repurposed as a status symbol. There’s an opportunity for brands to explore how their products and services can translate into virtual worlds.

> Fucking 🔥
> Nike's 'Cryptokicks' patent allows for the 'breeding' of 2 NFTs to create a shoe 'offspring' that can then be made into custom sneakers
> THIS is the type of crazy cool shit that NFTs unlock that no one's thinking about yet
> Pay attentionhttps://t.co/tMTW9gSDdn pic.twitter.com/WKSKY521zO

> — Zoe Scaman (@zoescaman) April 17, 2021

Nike has filed a patent for a tokenized footwear line.
Learn from Nike. Brands should extend the physical ownership of their products into digital. Nike has filed a patent to create cryptic new technology CryptoKicks. According to the patent, when customers buy physical shoes in the collection, they’ll also buy the representative NFT, essentially giving them physical and digital ownership of their purchase. Owners will then also get brand fan benefits in the form of exclusive and early access to later CryptoKicks collections.

> View this post on Instagram

> A post shared by Mercedes Luna Larrahona (@merlarrahona)

Paloma Wool shoes regularly appear in Larrahona’s fantastical 3D environments.
Learn from Paloma Wool. Brands should be showing up in digital environments. Spanish fashion brand Paloma Wool and British bedding brand Crisp Sheets collaborated with Argentine 3D artist Mercedes Luna Larrahona to create fantastical virtual showrooms for their products to feature in.
ASICS has launched an incubator programme for digital artists.
Learn from ASICS. Brands should collaborate with digital artists and social-first franchises to build digital credentials. The ‘Sunrise Red’ collection of NFTs from ASICS are all created in collaboration with young digital artists. When sold, the proceeds are reinvested into the brand’s Artist-In-Residence programme, ultimately funding the next generation of digital artists.
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