GameStop launches NFT market as it seeks to grow online
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GameStop on Monday announced the long-awaited emergence of its online marketplace for non-fungible tokens, or NFTs, in a bid to reinvent its business and capitalize on consumer adoption of cryptocurrency and blockchain technology.
The company said in a press release that the platform, which is now open to the public for beta testing, allows users to link their digital asset wallets, including the recently launched GameStop Wallet. They will then be able to buy, sell and trade NFTs. GameStop said that over time, the market will expand to offer other features such as Web3 games.
This is the latest push by the video game retailer, now headed by Chewy founder and activist investor Ryan Cohen, to invest in a digital future. GameStop is undergoing a transformation after many years of financial struggles, burdened in part by its massive real estate footprint and the rapid transformation of the online video game industry.
Cohen, whose 2020 GameStop investment helped fuel the so-called meme frenzy, last year to lead these transformation efforts. He’s brought on a new slate of corporate leaders, including current CEO Matt Furlong, who was formerly at Amazon. It also hired another former Amazon CEO, Mike Ricupero, as its chief financial officer.
The company is trying to win over investors who may have written GameStop as an old-fashioned retailer with many storefronts in old malls. GameStop operated a total of 4,573 stores, including 3,018 in the United States, as of January 29, according to the annual filing. In addition to her business of the same name, she also owns the EB Games and Micromania banners.
Now, the company is tapping into tumultuous areas like NFTs to grow. The unique digital asset has attracted enthusiasm and skepticism. Some retail industry watchers expect it to become a hot holiday gift. About half a million NFTs are expected to be purchased from retailers between November and December, which translates to a total market value of $54 million, according to Salesforce.
Screenshot of GameStop’s NFT Market, where
However, others may see that the market is a bit too late. Sales of virtual digital artwork and avatars could cool off from their pandemic-fueled heights. GameStop should also compete with other NFT markets, including the giant OpenSea.
So far, the company’s first digital transformation has not been without hurdles along the way. Last week, GameStop launched Recupero and announced layoffs across departments. Recupero, who joined the retailer about a year ago, was “fired because it didn’t fit the culture” and was “out of reach,” a person familiar with the matter told CNBC. The person said Cohen fired him.
Recupero was not immediately available to respond to CNBC’s request for comment.
The video game dealer has struggled to limit losses in recent years, even as its sales of hardware, software, and collectibles have grown.
In the three months ended April 30, GameStop reported a net loss of $157.9 million in revenue of $1.38 billion. A year ago, the company reported a net loss of $66 million on $1.27 billion in revenue.
The company hasn’t given a financial outlook since the start of the Covid-19 pandemic either. Furlong said in March that GameStop is making investments to increase customer loyalty and build its brand, which has affected profitability.