Why people pay real money for virtual clothes

People care about what their avatars wear.

When the virtual world Decentraland said in June that users could make and sell their own clothes for virtual characters to wear on the website, Hiroto Kai stayed up late to design Japanese-style clothes.

He sold kimonos for approximately US$140 each, and he said that he made between US$15,000 and US$20,000 in just three weeks.

Although the idea of ​​spending real money on clothes that don’t actually exist confuses many people, virtual property generates real sales in the “meta universe”-an online place where people can gather, walk around, meet friends, and play games environment.

The real name of digital artist and Japanese enthusiast Kai is Noah. He is 23 years old and lives in New Hampshire.

After earning as much income in these three weeks as he earned from working in a music store for a year, he resigned to become a full-time designer.

“It just took off,” Kay said.

“This is a new way of expressing yourself. It is the art of walking. This is its charm… When you have a piece of clothing, you can wear it to parties, you can wear it to dance, you can Show off that this is a status symbol.”

In Decentraland, avatar clothing (called “wearables”) can be bought and sold in the form of encrypted assets called non-fungible tokens (NFTs) on the blockchain.

Kai’s kimono includes exquisite pieces of shredded blue velvet with golden dragon trim.

Earlier this year, NFT was popular because speculators and cryptocurrency enthusiasts flocked to buy this new type of asset, which represents the ownership of online-only items such as digital art, trading cards, and online world land.

Niche crypto assets have also attracted the attention of some of the world’s largest fashion companies, who are keen to connect themselves with a new generation of gamers-even though most of their attempts to date have been for marketing.

Louis Vuitton, a subsidiary of LVMH, has launched a metaverse game where players can collect NFTs, and Burberry has created branded NFT accessories for the game Blankos Block Party, a subsidiary of Mythical Games. Gucci has sold non-NFT clothing for the avatar in the game Roblox.

“Your profile picture represents you,” said Imani McEwan, a Miami fashion model and NFT enthusiast. “Basically, what you wear determines who you are.”

McEwan estimates that since January, he has used the profits from cryptocurrency investments to spend between $15,000 and $16,000 on 70 NFT wearable devices. His first purchase was a Bitcoin-themed sweater, and he recently bought a black beret designed by a friend.

Selfie shopping

The overall size of the NFT wearable device market is difficult to determine. According to data from NonFungible.com, a website that tracks the NFT market, on Decentraland alone, wearable device sales in the first half of 2021 reached $750,000, up from $267,000 in the same period last year.

Some supporters say that wearable devices and shopping in virtual stores may be the future of retail.

Julia Schwartz said: “You can get a more immersive brand experience by exploring virtual spaces instead of browsing feeds and online shopping — whether you are buying an online avatar or buying a physical product that can be delivered to your door,” Republic The director of Realm, a virtual real estate investment vehicle worth 10 million US dollars, has built a shopping mall in Decentraland.

For NFT enthusiasts, online fashion cannot replace physical purchases.

But Paula Sello and Alissa Aulbekova, co-founders of digital fashion startup Auroboros, said it could be an environmentally friendly alternative to fast fashion.

Customers can send their own images to Auroboros and add clothing for prices ranging from £60 ($83) to £1,000.

Sello believes that the concept of virtual clothing can limit the waste of consumers buying clothes on social media. Citing a 2018 Barclaycard study found that 9% of UK shoppers bought clothes for social media photos and then returned them.

“We need to change fashion now. This industry simply cannot continue,” Sello said.

The virtual sneaker company RTFKT sells limited edition NFTs of sports shoes that can be “worn” in certain virtual worlds or social media through Snapchat filters.

Steven Vasilev, co-founder and CEO of RTFKT, said: “When the COVID started, a lot of people went online, and it really took off.”

He said that the company’s sales were 7 million U.S. dollars, and limited edition sneakers were sold for 10,000 to 60,000 U.S. dollars at auction. Although most customers are in their 20s and 30s, some are only 15 years old.

RTFKT’s NFT can also be used as a token to obtain a free physical version of the shoes, but one in twentieth of the customers will not redeem the token.

“I didn’t do redemption because I won’t be disturbed,” said Jim McNelis, a Dallas-based NFT buyer who founded the NFT company nft42.

“I try to avoid physical things.”