The article below dropped on 4/10/2023 from the Hustle Newsletter.
I find it facinating that at this moment in time, some think the Metaverse hype is over. Reminds me of what people were saying at the end of the dot com bust. Frankly, I look at where we are now as predictable. I am as bullish on the Metaverse and gaming as I ever have been. I just wanted to document this article and the facts around where the Metaverse is at this day and time.
|THE BIG IDEA
|Nobody’s moving to the metaverse
|Back when everyone was excited about the seemingly endless potential of the metaverse, metaverse real estate was hot.Now, we must imagine a pixelated tumbleweed rolling through the streets of a digital ghost town as The Block reports a significant downturn:In late 2021 and early 2022, weekly trading volumes on metaverse platform Decentraland were at $1m+. One plot sold for $2.43m.Today, just 20-30 traders trade ~$50k/week.Of Decentraland’s 98k land NFTs, it still owns ~68% of them.Meanwhile, attendance at Decentraland’s Fashion Week dropped from 108k in 2022 to 26k this year, despite showings from well-known brands.Why?The Block notes that gaming platforms, like Fortnite and Roblox, are going strong, while metaverse platforms like Sandbox and Alien Worlds aren’t.Gaming platforms, however, are fun, and the average user usually knows what they’re supposed to be doing there.The Verge’s Jay Peters attended Decentraland’s Fashion Week and found it hard to navigate, sparse, and glitchy.That lack of traffic probably isn’t ideal for the brands that showcased there — including Balenciaga, which was misspelled on its own booth and which seems to be doing better with AI-generated memes anyway. So, why shell out for virtual real estate no one visits laden with ads no one sees?There’s also, of course, the real world, where inflation has likely left people inclined to spend money on IRL items over virtual ones.But maybe don’t count it outThere have been some fun metaverse splashes — Tender Claws’ VR staging of The Tempest comes to mind — and virtual concerts from stars like Ariana Grande have pulled huge numbers. Plus, Fortnite players do spend money on skins and digital items.Maybe the key to metaverse retention isn’t real estate but just… building something social and fun first?
|October 1, 2022
Last week, if you were on a certain part of social media, you were inundated with photos from one of the top fashion events of the year — Paris Fashion Week. You don’t have to be just a fashionista to follow this year’s trends, since the metaverse, Web3 and crypto fashion snuck their way in.
The most obvious example of fashion entering the metaverse was a literal metaverse fashion collection called M3talove, where instead of models walking down a runway, 3D holograms wore digital clothing (that is only digital) that would later be sold as NFTs.
Another strange bedfellowship was between Balmain and MintNFT to create an NFT-based membership program running on the XRP Ledger. Alright then.
On the other hand, a more subtle metaverse reference was Loewe’s pixel collection, where models walked down the runway wearing real-but-pixelated clothing that had you blinking your eyes to see if it was real or not.
Metaverse fashion is nothing new, especially in the world of big name brands. Gucci has had “Gucci Town” on Roblex for a long time already (and virtual Gucci bags have sold there for more than the cost of a physical one) and Meta will “soon” allows their avatars to be dressed in expensive Prada and Balenciaga.
Back in February, Vogue had published an article titled: Paris Fashion Week: Next up, the metaverse. Now that the week is over — did Paris Fashion Week live up to its metaverse hype? Or did it include a few meta references, some NFT clothing, and consider that a job well done.
Decentraland’s Metaverse Fashion Week received far more industry attention than any digital fashion event before it.
Its arrival was timely — peak hype even, as the metaverse and NFTs move into popular lexicon. Virtual real estate platform Decentraland jumped at the opportunity to recruit fashion brands and fans to its blockchain-based platform for the four-day event. The verdict so far? Mixed and possibly premature, but in terms of excitement and eyeballs, a success, according to brands and metaverse consultants.
“It is just the beginning. We need to take one step at a time,” says Giovanna Graziosi Casimiro, the head of Metaverse Fashion Week (MVFW). As browsers and computers become more powerful, she adds, the quality will improve and more closely resemble the results that the fashion community often expects. Overall, Casimiro says, feedback from participating brands is that they are happy with the result; organisers are already planning to take what they learned from the first iteration and apply it to the next event, which is slated to take place a year from now.
The series of fashion-focused events, which ended Sunday, attracted a wide variety of brands and creatives, including Etro, Dundas, Dolce & Gabbana and Estée Lauder. Still, some notable players in the metaverse, including Gucci and Ralph Lauren, did not participate. The entire experience was blockchain-based, created on land sold as NFTs and digital fashion bought and worn as NFTs.
It is just the beginning. We need to take one step at a time.”
For some, especially those who have been developing digital fashion for years, it was too soon to broadcast a blockchain-based fashion event and too late to position this as the best that digital fashion technology can do, based on other examples of high-profile projects. On LinkedIn, the digital fashion community traded notes: “The user experience might need to improve just a tad to facilitate mass adoption,” wrote Anne-Christine Polet, who led PVH’s 3D initiatives before starting Hatch and Stitch. “The future looks like the past,” commented Kerry Murphy, co-founder of digital fashion house The Fabricant, which created the first NFT dress ever sold. But, he added, while the user experience is “from the ’90s”, development is speeding up and will be better next year.
According to feedback from other attendees, the graphics were rudimentary compared to previous digital fashion events, such as the Fabric of Reality show in 2020 or Gucci’s Roblox garden in 2021, and the experience was often compromised by glitches, including massive delays or events turning into black screens of code, that made it challenging at times to experience planned events. It was also hard to visualise turnout, as when Decentraland gets crowded, it automatically places visitors in multiple different realms.
As one fashion-tech expert noted, the risk of hyping a metaverse fashion event is that because the 3D design capabilities of Decentraland are currently restrictive, the end result can be underwhelming, and thus those who aren’t evangelists of digital fashion might find it off-putting and could be turned off from other events in the future. Because digital fashion events are still so nascent and vulnerable to criticism, and because the crypto community is so powerful, multiple experts that Vogue Business spoke to declined to go on-record with criticism for fear that it would jeopardise future projects.
“Someone always has to be first, and by going first you don’t always get it right,” says Max Vedel, co-founder and creative director at Swipe Back, a metaverse creative agency that has worked with Gucci, Nike and Swarovski. “That shouldn’t be seen as a negative. [MVFW] is the first foray for a lot of big names into the metaverse and while they didn’t always get it right, there were some pretty amazing shows on display.”
Decentraland shared that the platform saw 108,000 unique attendees throughout MVFW. While that’s not relegated only to fashion events, that’s compared to 40,000 people who attended an October music festival, which was also four days, and regularly 500,000 monthly active users. Numbers on digital fashion purchases were not yet available from participating brands.
There’s already a measurable knock-on effect for physical sales. Morgan Stanley estimates that for luxury goods alone, metaverse gaming and NFTs could constitute 10 per cent of the market by 2030, marking a €50 billion revenue opportunity and 25 per cent lift to the industry’s profit pool. When Roksanda created NFTs with the Institute of Digital Fashion during London Fashion Week, searches for the brand jumped 76 per cent on Lyst, according to the brand. Similarly, when Diesel announced at Milan Fashion Week it would release NFTs in addition to physical clothes, brand searches increased 41 per cent. When Balenciaga appeared in Fornite in October, views of the brand in the Lyst app more than doubled.
So, for those without the budgets or the risk-tolerance to put on their own event, this event distributed the risks and rewards to multiple brands. Deciding when is the right time to decide, based on the technical possibilities, “is a point that brands will have to decide, if they want to take the risk of getting out of the traditional aesthetic,” Casimiro says. “Some will say no for what we have today and may say yes three years from now. The brands who want to be avant garde and want to be seen as edgy will try right away.”
The mood of the event was fun and joyful, enabling experiences that would not have been possible physically. “There were some pretty amazing shows on display,” Vedel says.
Funny cats, in place of models, walked the Dolce & Gabbana catwalk. All of the models on the Unxd-curated runway could fly after emerging out of model-sized blooming lotuses, and walked in a vast venue that resembled an Olympics opening ceremony arena with music-coordinated light shows to match. An after-party from Hogan included a dance-off, and each attendee could programme their avatar to dance using a customisable series of moves, regardless of footwear or outfit limitations.
“You don’t just want to recreate real life in the metaverse; you want to be pushing boundaries and going really crazy with your designs, show spectacles and the actual experience,” Vedel says.
Charli Cohen’s experience with Rstlss featured falling meteorites spawning wearables. To close out the event, Grimes — confirmed at the last minute — performed in a cavernous, fantastical structure made by Auroboros, as guests waded in a centre tide pool without getting wet.
Designer Phillipp Plein, who put on a show and a DJ set, says that the event attracted both new fans and brought existing fans onto the platform. “Lifestyle space” D-Cave and Bulova partnered on a space selling Decentraland wearables, and hosted an event with virtual fashion platform Vogu. Participants were in “the hundreds,” says Stefano Rosso, co-founder and CEO of D-Cave. Ross is also the CEO of BVX, the metaverse business unit of OTB, parent company of Diesel, Maison Margiela, Marni; and a board member of Aura Blockchain Consortium. He says that they sold “a good amount” of unique NFTs with Bulova and some other wearables.
Events in particular work well to attract visitor traffic, says Andrew Kiguel, CEO of Tokens.com, which owns the metaverse real estate for the fashion district. “It is amazing to see so many brands validating the metaverse as a new venue for advertising and reaching consumers.”
When joining an event on Decentraland, the process can be very slow, confusing, or not work at all. Upon arrival, sometimes the music might not be playing, or multiple audio tracks are playing at once. Plein learned that in the metaverse, one needs to start the music before guests arrive. Otherwise, if the DJ starts afterward, and people don’t reload their browser, they might not hear the music.
Aside from logistical hiccups, a major criticism is the low-level graphics, compared to other digital fashion items. “Newcomers who are attending on desktops with limited hardware could feel slightly deflated by the look of the world,” says Vedel. “Jerky graphics that look like something out of Second Life — have we progressed much since 2015?”
Organisers say this is largely because everyday computers and wifi sometimes aren’t powerful enough for high-fidelity experiences. “They put us back 25 years in terms of resolution,” says Jason Rosenstein, CEO of NFT auction house Portion, who is working with Plein to develop the virtual Plein Plaza, which is why many compare Decentraland visuals to early iterations of Web 1.0 websites. “It’s really challenging to get a wearable to look right.”
The digital fashion items, specifically, are limited to a low number of polygons, meaning that the textures and details of clothing, especially individual items, is severely limited. Designers with high-fidelity 3D versions have to dramatically simplify the aesthetics to translate in Decentraland, Rosenstein says.
The Decentraland roadmap includes improvements to the ability to load 3D objects on avatars in real time, says Casimiro, although she adds that it’s important that brands explore aesthetics beyond just looking “realistic,” as the Decentraland community has an affinity for “metaverse-y” looking spaces and items.
There’s also the notion of evaluating popularity based on how many avatars are in a space. Because Decentraland drops people in multiple different realms to keep from overloading a space, not all participants are visible. “When I logged into my own party it was empty,” Plein says. “But, the other one was packed. You can have a date in the same world, but not in the same realm.”
“At times, Dentraland can feel lonely,” Vedel says. “It is not a naturally sociable place and there have been limitations on how many people can attend events. These are issues that will improve with time. The space is still being built and like the first versions of web pages, people will build on top, improve and create something that gets better over time.”
What’s next for Metavers Fashion?
The expectation is that brands will take their learnings and come back for the next fashion week. Casimiro says that more educational workshops are planned to help brands understand how to sell wearables and customise their spaces, and planning will start at least six months in advance.
Some continue to develop ongoing spaces, such as Plein. “The metaverse is still really limited. What you see today is just a small portion of what you can expect in the future; it’s a new experience for everybody. When the internet started 20 years ago, it didn’t look like what it is today. It took it over 20 years.” Rosenstein adds that the pace of development is much faster, so in three to four years, events such as these will be on a “completely different level”.
Many anticipate more physical integrations. “None of this is really about disappearing into virtual worlds,” says Alex Lambert, creative director of content production studio Happy Finish, which has worked with Balmain, D&G and H&M Group. “It’s about moving towards a point where we can bring virtual elements into the real world. Once you’re able to buy a virtual Chanel jacket and then wear that item in the real world, that’s when things will really start to change.”
Plein is planning a London store that includes an NFT museum and the ability to upgrade a physical purchase with its digital twin, for less than it would cost to buy the wearable alone. This pushes back against fashion’s occasional dystopian fears. “It’s a mistake when we try to separate the digital and physical world,” Casimiro says, “because they are two elements composing the same story. I don’t see physical events being replaced by digital.”
Another tech tenant that comes to mind: even disappointing tests are a success, because it provides useful information that makes the next experiment even better. “You really feel like a pioneer,” Plein says. “Everything is new, and there are not many who have tried it. We are still learning by doing.”
Clarification: Updated to include current list of Swipe Back clients. (29 March, 2022)
Correction: This article was updated to reflect Anne-Christine Polet’s current title. An earlier version of this article incorrectly referenced Polet currently leading PVH’s 3D initiatives. Polet no longer leads PVH’s 3D initiatives. (4/4/2022)