Gaming has emerged as one of the hottest use cases for non-fungible tokens (NFTs). Now traditional video game company GameStop is catching the blockchain wave with intentions to develop its own NFT marketplace, according to The Wall Street Journal. GameStop also wants to ink partnerships with cryptocurrency industry players. Its new NFT platform is expected to see the light of day later this year.
While a trend has already emerged in which corporate America is dipping its toe into the non-fungible waters, GameStop appears to be diving in headfirst. Building an NFT marketplace will pit the Grapevine, Texas-based company up against the likes of industry leaders OpenSea and Coinbase, which are currently the go-to platforms for all things NFT.
— GameStop (@GameStop) January 3, 2022
While it may seem that GameStop's push into one of the hottest segments in the blockchain industry is a no-brainer, the retailer's digital transformation has been a work in progress. Changing its business model from brick-and-mortar stores to one that more closely resembles a tech company has not been quick, nor has it been easy. GameStop's failure to strike when the iron was hot in online streaming and mobile gaming has cost the company. Revenues sunk from $9.5 billion in GameStop's FY 2011 to $5 billion in FY 2020, and that was at the height of the pandemic when the video game industry was otherwise booming.
The company's push to digital began in earnest last year after it rose to popularity as the first meme stock of the Wall Street Bets movement. With all the attention, they brought in the big guns, hiring seasoned e-commerce executives Matt Furlong and Mike Recupero as CEO and CFO, respectively, from Amazon. The new management team seems to have hastened GameStop's transition to digital where it can better compete with online rivals. In fact, GameStop has reportedly gone on a hiring spree for the new NFT unit, bringing on nearly two-dozen employees to start.
NFTs to the Rescue?
NFTs could contain a piece of art, video, music and more. One of the most popular use cases for NFTs has been digital avatars on social media, where users showcase their favorite digital asset as their profile pic. Blockchain-based games have increasingly been integrating NFTs too, giving users the opportunity to buy or earn them, turn around and use them as in-game characters.
Play-to-earn game Axie Infinity, developed by Sky Mavis, is behind one of the most popular NFT collections in the space, where in the last 30 days, close to 1.5 million Axie NFTs have been sold.
GameStop's NFT marketplace sounds a lot like OpenSea, the industry leader for minting, buying and selling these digital collectibles, with almost $15 billion in total NFT sales globally. GameStop's NFTs will take the form of “avatar outfits and weapons,” according to the WSJ story citing people familiar with the matter. The company is currently hunting blockchain developers to build on its platform. In addition to competing with OpenSea, GameStop will be up against cryptocurrency exchange Coinbase, which is launching an NFT marketplace of its own and has millions of users on the waitlist.
Meme Stock Status
GameStop's push into one of the hottest segments in the blockchain industry could not have come soon enough. Investors are cheering the move, sending the stock, which has still lost ground in this early stage of 2022, nearly 10% higher on the day. GameStop's stock has taken investors on a wild ride over the last 12-month period, climbing from less than $20 per share at this time last year to $144 and change today. Retail investors have piled into the stock in an attempt to drive up the price and send sophisticated traders betting on the stock's demise reeling. GameStop became the first meme stock to trade more on internet sentiment than fundamentals, like profits and revenue, at the time.
NFTs came into their own last year, ballooning into a $40 billion market, according to Chainalysis data. Now 2022 is seemingly gearing up to be at least as big.
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