What is Happening?

Would you rather a real-life $3,400 Gucci Dionysus Bag or a virtual $4,100 Gucci Dionysus Bag in Roblox?

If you haven't heard of Roblox you'll probably need to ask someone younger. With only 14% of the companies userbase over the age of 25. And while most of the adult population may still be struggling with the concept of the metaverse and Zuckerberg calling his staff Metamates, chances are the teen in your life is already in it.

Launched in 2004, the company built out three major arms:

• 🌍 Roblox Client, the application that allows users to explore 3D worlds

• 👉 Roblox Studio, which allows developers and creators to build, publish and operate those 3D experiences

• 🌤 And Roblox Cloud, which includes the services and infrastructure that powers the platform. Users create a unique avatar that is able to go across experiences, like games and events.

While signing up for Roblox is free, along with most of the platform's experiences, users can also use real-world currency to purchase Robux. Robux is the platforms digital currency.

What Does it Mean?

Let's look at Forever 21, the American fashion retailer who joined the platform in December.

The retailer created "Forever 21 Shop City," where users can manage a digital store and compete to become the top shop. Participants customise the look of their store and complete tasks like stocking inventory, operating the cash register, hiring employees and assisting customers.

The fast fashion retailer's objective is to gamify fashion and encourage players to express their individuality by running, and customising, their digital spaces. Products can be purchased for users' avatars with monthly "metamerch" drops — namely, apparel, makeup and accessories. But some products can also be purchased in real life. A page on the brands website brings up a partnership collection dedicated to in-game products that retail in the real world.

For brands, virtual items can translate to real-world money. Last May, Gucci offered a limited-time, digital version of its Dionysus Bag with Bee through its Gucci Garden exhibition. The bag sold for around $6, but when people started flipping the product its price went up. One user paid around $4,115 for the digital purse, while the actual, real-life version of the bag sold for $3,400.
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🎯 So while brands are creating brand awareness on the platform, they could also be accelerating sales. And those digital purchases come with high margins because there's no stocking costs. There's no manufacturing costs. And there's no distribution costs.

📻 Want to learn more? Check out the Acquired Podcast episode on Roblox