While the fashion and retail industries have been negatively impacted by the effects of the pandemic, the gaming and esports market is growing rapidly. According to a recent report by NewZoo, the global gaming market generates revenues of $159.3 billion and is projected to exceed $200 billion by the end of 2023.

But who are the gamers, often approached as Gen Z (Generation Z), and what benefits can this generation bring to the fashion industry? Is it worth investing in gaming, and if so, why? What are the potential gains for us?

My advice to all fashion professionals is to do it… “yesterday”. Every analysis, research, and report on future strategies for boosting turnover and immediate profitability focuses on the Chinese business ecosystem, which automatically renders the European and American models somewhat anachronistic and almost outdated. But let’s start with the root of the matter.

Surely most of you are familiar with the term “millennials” as “the children of the millennium,” those mainly born in the 1980s and coming of age in the early 2000s, who experienced the global economic crisis that erupted in 2008 and were called upon to face significant problems brought about by globalization. Until this point, technology wouldn’t necessarily be defined as essential or an integral part of their lives.

However, as technology advances, the new generation isn’t just familiar with it but identifies with it completely and shapes it. They are the first generation without a pre-internet life, born and raised with “smart” phones, and unfamiliar with life without social media. For all these reasons, they are also called the iGen.

Source: Why Do Different Generations Use Social Media?

This generation appears to be more financially autonomous due to their coming of age amidst social, political, and economic instability and uncertainty. They experienced a significant increase in their parents’ debts, the crash of 2008, and, as a result of the recession, the disillusionment of the “American Dream.” Consequently, they are less idealistic and more pragmatic.

However, iGens as a whole are extremely valuable in the job market. Their role is pivotal as it creates opportunities for advancement in the global prevalence of digital transformation. They are quick, adaptable, and central pillars of entrepreneurship. They are the generation of multitasking, processing multiple pieces of information simultaneously at a tremendous speed (greater than any other generation), learning quickly, preferring virtual reality, and constituting a distinct 40% share of the total consumer base for 2020.

Source: Marketing to Generation Z

This generation is at the forefront of technological advancements and computer science, working primarily from smartphones, communicating with emoticons, and unable to envision work in a non-digital environment. Moreover, their purchasing power alone amounted to approximately $44 billion for the year 2018.

Thus, the notable presence of renowned brands such as:

• Dior: Facebook, Instagram (Dior Official, Dior Makeup, Dior Parfums, Dior Beauty Lovers), Twitter, and Pinterest
• Chanel: Facebook, Instagram (Chanel Official, Chanel Beauty), and Twitter
• Gucci: Facebook, Instagram, Twitter, and Pinterest
• Givenchy: Facebook (2 accounts: Givenchy, Givenchy Fragrances and Beauty), Instagram (2 accounts: Givenchy Original, Givenchy Beauty), and Twitter (2 accounts: Givenchy, Parfums Givenchy)
• Burberry: Facebook, Instagram, Twitter (multiple accounts depending on the country), and Pinterest

It is certainly interesting to monitor some of these brand strategies, undeniably beneficial as business models.

However, in 2020, while a portion of iGens invests more time and money in social platforms like the aforementioned ones and other platforms like YouTube, Snap, or TikTok, and similarly in China (as seen in a previous article regarding LV’s business system), on WeChat, Taobao, Douyin, Bibili, etc., gamers opt for the private and creative world of video games. This is where the largest and most efficient turnover in the market begins today.

Nevertheless, let us not forget, as analyzed in the article “China: At the Center of the Luxury Business Market by 2025”, a noteworthy critical detail separates them: the unwavering and integral Chinese consumer consciousness. Admirable and evidently beneficial for a more innovative approach to the global industry.

China’s Free-Spending Gen-Zs and What Triggers Their Buying: Report

As troubling as the case of iGens may be, as they increasingly distance themselves from traditional business systems – an element that undoubtedly challenges older business models and strategies – the future and its evolvability appear uncertain without their presence.

In essence? A new mindset, new approaches, new operational models, and innovative ideas. The Covid pandemic proves once again that it brings the fashion industry closer to the modernization of business models and the mandatory reshaping of marketing strategies, with the ultimate goal of reaching the strongest consumer audience of Gen Z, now centered around gamers.

Partly, this is due to the emergence of a new generation of gamers who tend to hold a significantly large budget in the industry. According to Kantar’s research, nearly 90% of Gen Z are gamers, compared to 59% of the total population.

Source: Is Balenciaga’s Video Game Actually Any Good?

Here we encounter the latest marketing strategies in the gaming market. Recently, I discussed the spectacular online video game “Afterwold: The Age of Tomorrow” by Balenciaga, where Demna Gvasalia strikingly presented the FALL 21 collection through an alternative virtual world set in the year 2031. If you haven’t played it yet, I highly recommend it. You’ll virtually immerse yourself in a completely surreal world that will surely excite you with its ideological symbolism and innovative ideas. The business benefit for the fashion industry here, let me assert, goes beyond profitability – it is primarily ethical, and this alone yields unaltered profits, not only for the house itself but mainly for the broader consumer consciousness and the previously environmentally harmful industrial mindset.

Looking back to 2019, we also witnessed the legendary collaboration LV x LOL in the article about the Louis Vuitton business ecosystem, a campaign that we undoubtedly won’t forget. It reminds us that the online game League of Legends is a team-based strategy game with over 115 million users worldwide.

 Source: Louis Vuitton has collaborated with League of Legends

Following suit, Puma recently entered into four partnerships with esports and gaming groups in the last 18 months. In its most recent collaboration with Gen.G Esports, a South Korean-based online team of League of Legends players, Puma will outfit the team in Puma jerseys and a range of branded clothing.

Source: Gen.G announces multi-year partnership deal with PUMA

At Puma, 85% of its male customers in the US are gamers, and among them, roughly 75% regularly watch gaming streams, according to Matt Shaw, senior strategist for esports and marketing innovation at Puma, who explains:

“As consumers increasingly become fans of esports – which isn’t exactly a huge behavior shift – the overlap becomes greater. The tipping point is ‘potentially massive.’”

Gaming and esports enthusiasts are increasingly revealing themselves as consumers of beauty and fashion, now desiring to spend on both in-game and real-life products, attracting the attention of commercial brands.

As previously mentioned in the Louis Vuitton business ecosystem, female gamers are growing steadily, with the overall revenue skyrocketing significantly, creating opportunities and business models beneficial for any brand seeking a dynamic marketable audience of potential customers.

Source: Distribution of computer and video gamers in the United States from 2006 to 2020, by gender

In the above statistical table, it is calculated that women represent approximately 41% of gamers in the US, accounting for roughly 1 billion of the global population. This undoubtedly confirms the catalytic role of female gamers in the industry and the need for brands to invest in the gaming category.

Within the realms of fashion and beauty, several brands have invested, such as Valentino, Marc Jacobs, and Anna Sui, who released in-game looks for the popular game Animal Crossing this year, while Parfums Givenchy and Gillette Venus followed suit, catering to players’ beauty needs. The Venus line, created with digital designer Nicole Cuddihy, allows users to apply features such as freckles, acne, body hair, cellulite, and even stretch marks to their game avatars.

Source: Nintendo.co.uk

Indeed, Animal Crossing is a game that portrays a virtual paradise-like tropical island where essentially the player is called upon to travel and… grow fruits!

Yes, indeed. Who would have believed that such a simplified and charmingly childlike concept would become the center of attention for some of the largest global brands?

Source: Valentino and Marc Jacobs have made their way to Animal Crossing: New Horizons

Indeed, this particular game garnered tremendous acclaim, attracting worldwide attention and multiplying its player base at astonishing rates. However, this represents a particularly intelligent marketing strategy that, while initially puzzling, ultimately reminds us of the role of marketing and its deep roots in our society.

Still not convinced?

According to a BBC survey, since the release of the game in March, the latest video game Animal Crossing has sold over 22 million copies, as the pandemic led to an unprecedented increase in its sales. Additionally, Nintendo’s developer stated that the title’s popularity boosted profits from April to June to 106.4 billion yen ($770 million) – more than five times higher than last year. Concluding the research, it should be noted that Nintendo sold 5.7 million Switch units in the quarter, up from 2.1 million a year ago. More than half of the consoles played for the first time in the quarter were due to Animal Crossing.

“As a brand, you always want to go where your consumers are”, says MyAnh Nghiem, communications director at Venus.

I think by now you are convinced about the validity of Animal Crossing’s success and the strong role it has played and continues to play in the fashion industry. Indeed, we are talking about large sales figures that rightfully attracted the attention of fashion houses’ marketing strategies, and as we have repeatedly observed, it is crucial to have a similar mindset and see beyond the expected, beyond the “safer” marketing strategies that we used to adopt as professionals in previous generations.

“Numbers are insane,” said industry analyst Serkan Toto of Kantan Games, sharing Nintendo’s latest revenue figures on Twitter.

Source: Animal Crossing boosts Nintendo sales

Of course, we couldn’t overlook the growth of Esports and the organizational systems and championships that, as explained by Farzam Kamel, co-founder and president of the esports organization Andbox, based in New York, have attracted more investments in consumer touchpoints that have long been undercapitalized, including apparel.

Source: dexerto.com

Source: The eSports phenomenon

So in 2019, the company took a decisive step by hiring consultant Mary Clark, with previous experience at the leading house Ralph Lauren, as head technical designer, and Maxwell Osborne of Public School as creative director of consumer products, stating:

“It was a step forward from Andbox’s initial goal to offer fashion products capable of standing on their own merit.”

And if you haven’t yet realized the significance and disruption that this change signified and the tremendous profits it could yield, I invite you to observe the statistical table:

Source: eSports market revenue worldwide from 2018 to 2023

The above statistical table shows the revenue of the global eSports market from 2018 to 2023. In 2020, the global eSports market was valued at over $950 million, and the industry is expected to grow rapidly in the coming years. According to estimates from the source, the revenue of the global eSports market is projected to reach nearly $1.6 billion by 2023. Were you not expecting this? The majority of this revenue comes from sponsorships and advertising, with the remainder coming from media rights, publisher fees, merchandise, tickets, digital, and streaming. In terms of revenue, Asia and North America represent the two largest eSports markets, with China alone accounting for one-fifth of the market.

Source: What you need to know about the four biggest eSports titles

Source: Esports audience to double in Asia

China stands as the largest esports market in the world, with revenues estimated to reach $385 million by the end of 2020. It’s no secret that China is considered the future of competitive gaming.

However, to conclude the esports segment, I would like to provide you with some additional, particularly interesting information that will confirm the validity of the semantic need for business collaborations with the fashion industry.

While demographic data show that the target group of esports mainly consists of young people with strong financial budgets, it seems that not enough significant investments have been made in this area yet. It is true that the esports category is still in its infancy and has not been fully exploited.

In light of the Andbox example mentioned earlier, the company, following the promising new hires it made in its innovative business plan, has filled every gap.

According to Kamel, co-founder and president of the organization, products from collections designed by Osborne in collaboration with two of the organization’s stars, JJoNak and Saebyeolbe (SBB), sold out within a few days, while their collections also provided the opportunity to test higher pricing assignments, as was the case with the legendary SBB Collection bomber jacket, which sold out in just 5 minutes at a price of $500!

Source: Andbox

In parallel, another equally prominent esports company, Fnatic, based in London, has successfully completed a particularly profitable surprise collaboration. Recently, it tested the aesthetic taste of its audience by releasing a limited edition collection of diving watches in collaboration with the fashion house Gucci (Fnatic x Gucci). Guess what… Priced at $1,600, all 100 collectible pieces were sold out in no time. This undoubtedly leads to more collaborations between luxury brands and esports, as we have previously analyzed regarding China’s role as the epicenter of the business market until 2025.

Source: Gucci Partners With Fnatic For Limited Edition Watch

And as everything converges into the significant market of China, it should be noted that the Asia-Pacific region represents 54% of esports players and gamers worldwide, accounting for almost half of global gaming revenue. China stands as the largest gaming revenue market, followed by the United States, Japan, and South Korea.

“The size of these markets corresponds to a broader culture around esports, which translates into an audience interested in focusing on in-game cosmetics and more expensive products,” writes Alexander Champlin, senior analyst of esports at Niko Partners, in an interview with Vogue Business.

It’s a fact that Asian markets such as China, South Korea, and Japan show significantly greater interest in luxury fashion compared to the US audience. Specifically, China has already proven to be a successful base for beauty and gaming collaborations, such as the limited edition lipstick collection between Mac and Tencent’s famous game “Honor of Kings,” which sold out in less than an hour on Tmall in 2019.

The beauty brand is drawn to the target audience of the game, which consists mostly of over half the percentage of girls and primarily ages under 24 years old.

“There is a huge intersection, especially given the ongoing growth of the female gaming community, as well as the broader incorporation of fashion, style, and beauty into their streams,” writes Mark Jiang, vice president of global advertising at Mac.

Source: brandinginasia

However, following the enormous sales success, the company announced a second collection where all five lipstick shades sold out within the first 24 hours, while pre-orders placed on three different platforms reached 14,000. The business benefits are likely more than meets the eye.

Source: GENZ & GAMING – WHO’S PLAYING WHAT?

The prominent economic and business value of Gen Z undeniably constitutes one of the strongest semantic pillars of the fashion business in 2020. Some of the competitive marketing strategies we have analyzed in this article confirm the necessity and benefits for fashion houses in redefining the gaming market by leveraging the advantages of e-sports partnerships. Profits reach staggering amounts, and companies are striving to establish new innovative business models for promotion and advertising. The luxury market is revitalized, and the global fashion industry is reshaped, contributing to the groundbreaking effort to approach the lucrative Chinese consumer market. The Gen Z community undoubtedly confirms the secret to success in the era of COVID…