Digital fashion for avatars and games: is there a real business?

Yes, there is a real business in digital fashion for avatars and games, though it remains a fraction of physical apparel sales. Gaming platforms and luxury brands are reporting measurable revenue from virtual clothing, with the market growing as younger consumers spend more time in digital environments. However, the economics are highly concentrated: a handful of platforms generate the bulk of sales, whilst most fashion brands view digital collections as brand-building exercises rather than significant profit centres.

How large is the avatar fashion market?

The virtual fashion market is showing concrete growth, anchored by gaming platforms with established user bases. Roblox, the platform with the most transparent reporting, disclosed that its Marketplace and avatar shop generated over $800 million in bookings during 2025, representing roughly 11 per cent of total platform revenue. This figure includes both brand partnerships and user-generated content sold through the platform's economy.

Industry analysts project broader market expansion. According to market research firm Verified Market Research, the global virtual fashion market was valued at approximately $1.97 billion in 2023 and is forecast to reach $4.8 billion by 2031, growing at a compound annual rate of 11.8 per cent. These estimates encompass avatar clothing, game skins, virtual accessories and digital-only fashion experiences across gaming, social media and metaverse platforms.

Fortnite, owned by Epic Games, remains a major player though the company does not break out fashion-specific revenue. Epic reported that Fortnite generated $5.8 billion in revenue in 2024, with skins and cosmetic items accounting for the majority of in-game purchases. Fashion collaborations with brands such as Balenciaga and Nike contributed to these sales, though precise attribution is not publicly available.

Which brands are generating measurable revenue?

Luxury fashion houses have moved beyond experiments to establish repeatable revenue streams. Gucci has been among the most active, launching collections on Roblox, Zepeto and The Sandbox since 2021. Whilst Kering does not disclose digital fashion revenue separately, the company stated in its 2025 annual report that Gucci's digital innovation initiatives, including virtual goods, contributed to a 3 per cent increase in direct-to-consumer engagement among customers aged 18 to 24.

Ralph Lauren reported concrete results from its Fortnite partnership. The brand's December 2024 Fortnite collection, which included digital versions of its iconic polo shirts and outerwear, reached over 8 million players in the first month, according to a company investor presentation. Ralph Lauren's chief digital officer stated in a February 2025 earnings call that digital fashion partnerships generated 'low single-digit millions' in revenue whilst delivering significant brand awareness among Gen Z consumers.

Other brands with active digital fashion programmes include:

• Balenciaga: Launched a persistent storefront in Fortnite in September 2024, selling character skins and accessories. The collection was featured in Epic's top ten revenue-generating brand collaborations for Q4 2024.
• Nike: Operates Nikeland on Roblox, offering free and paid avatar items. Nike reported in its fiscal 2025 earnings that digital experiences reached over 25 million users, though revenue was not separately disclosed.
• Tommy Hilfiger: Partnered with Roblox and DressX for avatar collections in 2024 and 2025, with the brand stating these initiatives supported a 12 per cent increase in social media engagement among under-25s.
• Adidas: Sold virtual trainers and apparel across multiple platforms including The Sandbox and Ready Player Me, generating what the company described as 'modest but growing' revenue in its 2025 sustainability report.

What are the platform economics?

Revenue-sharing models vary significantly across platforms, affecting brand profitability. Roblox operates a creator economy where developers and brands receive approximately 30 per cent of sales after platform fees and currency exchange costs. For branded items sold directly through Roblox's avatar shop, brands can negotiate higher revenue shares, typically between 50 and 70 per cent, according to platform documentation.

Fortnite collaborations follow a licensing model. Brands typically receive a flat licensing fee plus a percentage of net revenue from their specific items, with terms varying by partnership. Industry sources suggest licensing fees for major brands range from $500,000 to $2 million, plus royalties of 15 to 25 per cent on sales.

Production costs remain relatively low compared to physical fashion. Creating a digital garment for a gaming platform typically costs between $5,000 and $50,000, depending on complexity and platform requirements, according to digital fashion studio estimates. This contrasts favourably with physical sample production, inventory and distribution costs, though brands must also account for marketing and platform integration expenses.

Where do brands see the ROI?

Most fashion companies frame digital collections as marketing investments rather than standalone profit centres. A 2025 survey by management consultancy McKinsey found that 68 per cent of fashion executives viewed virtual fashion primarily as a brand awareness tool, whilst only 22 per cent expected it to become a significant revenue stream within three years.

The value proposition centres on reaching younger demographics. Roblox reports that 67 per cent of its users are under 25, whilst Fortnite's player base skews heavily towards the 18 to 34 age group. Brands can track engagement metrics including item views, try-ons and purchases, providing data on consumer preferences before investing in physical production.

Some companies are exploring direct connections between digital and physical sales. Ralph Lauren's Fortnite collaboration included QR codes that directed users to physical product pages, resulting in what the company described as a 'measurable uplift' in polo shirt sales among new customers. Similarly, Tommy Hilfiger offered discount codes for physical items to users who purchased digital avatar clothing, though conversion rates were not disclosed.

What are the challenges to scaling?

Platform fragmentation remains a significant barrier. Unlike physical retail, where a garment can be sold across multiple channels, digital fashion items are typically platform-specific. A dress created for Roblox cannot be worn in Fortnite or The Sandbox, requiring brands to develop separate assets for each environment. Industry efforts to create interoperable standards have made limited progress, with no unified solution in commercial use.

Consumer spending patterns also present challenges. Free-to-play gaming economics depend on a small percentage of users making purchases. Roblox reported in 2025 that only 14 per cent of daily active users purchased virtual items in any given month. This concentration means brands must achieve significant reach to generate meaningful revenue.

Intellectual property protection is inconsistent across platforms. Whilst major gaming companies enforce brand trademarks, user-generated content platforms face ongoing issues with unauthorised copies of branded designs. Several luxury brands have filed trademark complaints against Roblox and Decentraland users selling knock-off virtual goods, though enforcement remains reactive rather than preventive.

Despite these obstacles, the business case is strengthening for brands with the right expectations. Digital fashion offers low-risk experimentation, youth engagement and data collection at modest cost. For platforms with large user bases and proven monetisation, virtual apparel has become a measurable revenue category. Whether this evolves into a major profit centre for fashion brands or remains a marketing channel will depend on platform consolidation, interoperability advances and consumer behaviour over the next several years.

Researched and drafted with AI support, reviewed and released by the editorial team.

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