As a relatively recent entrant to the booming online gaming industry, fashion brands are adopting innovative ways to engage the new iGeneration. Also known as GenZ, this group includes those born between the mid-1990s to the early 2010s.

With strong purchasing power and even stronger sensitivity to ethics and sustainability, iGen’s choices are reshaping the face of luxury. For example, approximately 87% reported that they are involved in online gaming at least weekly, suggesting that fashion’s digital landscape has found an additional revenue stream by reaching this young generation. Gamers looking at a personalized and immersive gaming experience are engaging in character customization by purchasing digital merchandise. Beyond engaging in the online gaming space, many international fashion brands are quickly embracing the metaverse with a digital fashion week such as the ‘Fashion district’ of the virtual world ‘Decentraland.’

Playing games
Since its inception in the 1970s, the gaming industry has grown significantly -- from the recent rise of NFTs to mobile telephones with integrated gaming apps and even to Covid-19, which became an additional catalyst for increased online gaming. Historically, luxury’s involvement with gaming began about a decade ago with the Japanese role-playing series of Final Fantasy characters showcasing Prada’s collection. Today, the luxury industry is embracing the metaverse and online gaming space as part of their marketing and retail strategies. Louis Vuitton dressed Qiyana, the League of Legends champion in collaboration with Riot games in a promotional campaign, Gucci, Prada, Chanel, Off-White and Balenciaga have collaborations and promotional schemes to market their products through online gaming platforms. Roblox’s collaboration with Nike, Ralph Lauren and Gucci made possible the dressing of avatars in digital collections launched by the brands. Forever 21 also created an experience of ‘The Forever 21 shop city’ on Roblox. Balenciaga’s collaboration with Fortnite-developer Epic Games facilitated the purchase of avatar clothing ‘Skins’ by gamers. To promote a new collection, Burberry launched its own video game ‘B Surf’. These are just a few examples of how luxury brands are keeping pace with changing consumer needs in the past few years.  

Online gaming in India
Despite the opportunities for luxury’s growth in the online gaming world, Indian fashion labels have been slow to collaborate. This is surprising for a country reported to have the second-largest gamer base in the world with more than 420 million gamers. Expected to reach $1.38 billion by 2025, India's VR and AR market is seemingly one of the fastest-growing markets in the world. Although some designers in India have stepped in to the metaverse and dropped some NFTs, including Manish Malhotra, Amrapali Jewels, Papa Don’t Preach by Shubhika and Anamika Khanna, there isn’t a lot of activity in the online gaming space. While the metaverse and digital fashion are growing trends, Indian consumers’ willingness to invest in digital fashion for its avatar is yet to be assessed. For a developing country whose consumers may prefer to invest in real-world luxury products, it may take time for Indian fashion designers to develop the market for digital fashion in the world of online gaming. Except for a few luxury brands dropping NFTs, most have not entered the metaverse. One reason for this may be related to income adequacy as the average monthly income in India is between $250 to $300. Another reason could be that the most popular forms of online gaming in India are Rummy (a card game) and fantasy cricket, though a market still may exist for other online fantasy sports.

Legal position 
In 2021, the Supreme Court of India clarified the status of online fantasy sports games in Gurdeep Singh Sachar vs. Union of India, ruling that because these platforms are not entirely dependent on chance or luck, they are considered games of skill. Court decisions that have addressed fantasy sport platforms as games of skill have been key to the growth of online gaming in India. Fantasy sport platforms include online games such as cricket, hockey, football, kabaddi, handball, basketball, rugby, futsal, and both American football and baseball in India.

However, looking at the current legal framework for online gaming, it is only recently that the sector received much-needed regulation. Historically, Indian laws prohibited gambling and there was no specific legislation regulating online gaming involving money winnings. Instead, individual states in India have their own rules in place. While some ban online games as ‘gambling’, others distinguish between games of skill and games of chance. A game of skill is one where the winning depends predominantly on the player’s skill while a game of chance is mostly dependent on luck. Because of this lack of uniformity, gaming platforms did not have a clear edict on the legality of online gaming across India. Many stakeholders called for regulation of the online gaming sector as a way to clarify the situation throughout the country.

On April 6, 2023, the Indian government amended the IT rules of 2021 As a result, a self-regulating mechanism was put in place and online gaming intermediaries have finally been recognized and distinguished from gambling. While the new rules do make online, real money games permissible, they state that there must not be any betting or wagering on the outcome of any game. Self-regulatory organisations comprising experts and industry representative have been given power to decide the permissibility of an online game. An ‘online game’ has been defined as “a game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary.” Although these rules appear to shine bright with clear distinctions between permissible online games and those allowing betting and wagering based on ‘outcome’, the lack of clarification on games of skill and games of chance may undermine the intent of these regulations. Decisions on gambling or betting remain the subject of individual states which yet again, may have contradictory stances absent a clear definition of what comprises ‘wagering’. 

In any case, with these new rules notified, the legal landscape is set to develop for online luxury gaming in India and the hope is that the industry is able to realise its full potential locally just as it is globally.

Remfry & Sagar Managing Associate Radha Khera is an intellectual property, media and fashion lawyer with over a decade of experience. She is a trained fashion lawyer, having completed her second-level masters in fashion law from Luiss Guido Carli in Rome. Radha is on the editorial board of the Fashion Law Journal. She can be reached at [email protected].