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Ether is down nearly 70% this year, and NFT sales have fallen precipitously: The perfect time for GameStop’s NFT marketplace to go live.
Daniel Van Boom
Senior Writer
Daniel Van Boom is a Senior Writer based in Sydney, Australia. Daniel Van Boom covers global tech issues, culture, video games and much more. Daniel Van Boom loves speaking about himself in the third person.
Despite the best efforts of companies like Ubisoft and Square Enix, gamers have thus far resisted NFTs from coming anywhere near their favorite titles. Instead of putting nonfungible tokens in games, GameStop is hoping to sell them directly to players. The gaming retailer on Monday launched its own NFT marketplace.
GameStop’s business has struggled over the past decade as people increasingly buy games online, a trend pronounced enough that Sony offers a digital-only PlayStation 5 . With a customer base in flux, the company now eyes the lucrative NFT market, which was last year worth $25 billion. In addition to its newly-launched marketplace, GameStop also offers its own cryptowallet.
NFTs are tokens minted from a blockchain that certify ownership of a digital asset; they’re the digital equivalent of the deed to a property. Critics say NFTs are a temporary craze that will eventually fade to obscurity once the bubble well and truly bursts, while proponents argue NFTs will change the internet economy forever. Whatever their merits, NFTs are big business. About $17 billion has been spent on Ethereum-based NFTs on the OpenSea marketplace this year, according to Dune analytics. OpenSea takes a 2.5% cut of every NFT sold on its platform, meaning revenues would sit at about $425 million in the last 7 months.
Unfortunately for the GameStop, the recent crypto crash has dashed enthusiasm for all things blockchain. Ether, the cryptocurrency with which most NFTs are bought, is down nearly 70% since the beginning of the year. NFT sales on OpenSea fell from $2.5 billion in May to $696 million in June. With ether sitting at around $1,000, there’s enough market activity for an incumbent company like OpenSea to chug along, but it will be far more challenging for a newcomer like GameStop.
GameStop’s marketplace is Ethereum-based, meaning it doesn’t sell NFTs built on blockchains like Solana, and currently only offers artwork. GameStop is seemingly banking on its existing customer base to dabble in NFT trading, as the marketplace currently doesn’t offer blue chip collections like Bored Ape Yacht Club, Doodles or Cool Cats — collections popular among NFT traders, but unaffordable to most people.
Eventually, the marketplace will expand to encompass “Web3 gaming“, which refers to games that utilize NFTs and cryptocurrencies. To that end, GameStop has struck up a partnership with Immutable, a company that specializes in blockchain gaming. The two have offered a $100 million grant to Web3 developers that join the platform.
It comes at a tumultuous time for GameStop. Last week the company fired its Chief Financial Officer amid wider layoffs within the organization. “Change will be a constant as we evolve our commerce business and launch new products through our blockchain group,” GameStop CEO Matt Furlong said in an email to staff, according to Kotaku. In the company’s most recent quarterly financial report, at the end of April, it revealed net losses of $157 million.
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