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GameStop Earnings Call Reveals Losses, Plans to Drop Cryptocurrency Effort

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GameStop, a retailer of video games, has announced that it will no longer put any effort into cryptocurrencies after suffering net losses of $94.7 million in the third quarter and firing staff from its department of digital assets.

GameStop CEO Matt Furlong stated on a Dec. 7 earnings call that the company has “proactively minimized exposure to cryptocurrencies” and “does not currently hold a material balance of any token,” adding:

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.”

GameStop hinted earlier this year about its crypto plans

The company stated earlier this year that it was considering cryptocurrency, nonfungible tokens (NFTs), and Web3 applications as growth opportunities, referring to these areas as “increasingly relevant for gamers of the future.”

In the future, it will turn its attention to gaming, collectibles, and used goods.

According to a Dec. 7 filing with the Securities and Exchange Commission, it is “also pursuing, and plans to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology,” suggesting that its moves in the NFT space are still proceeding (SEC).

The most recent Web3-related product promoted by GameStop is its NFT marketplace, which launched on ImmutableX, an Ethereum layer-2 blockchain, on October 31 after a July public beta.

Before launching its NFT marketplace in May, the company unveiled a beta self-custody crypto wallet and a beta NFT marketplace on Loopring, another layer-2 Ethereum protocol, in March.

In an effort to increase customer interest in cryptocurrency and to collaborate on e-commerce and online marketing initiatives, it also partnered with the now-bankrupt cryptocurrency exchange FTX US in September. Soon after declaring bankruptcy on Nov. 11, it severed ties with the exchange.

Furlong confirmed in the earnings call that GameStop made multiple staff reductions on December 5 as part of its third round of layoffs for 2022.

However, compared to the second quarter, which saw losses of $108.7 million, the third quarter’s losses slightly decreased. Additionally, GameStop, which reported a $105.4 million loss in Q3 2021, saw an improvement year over year.

GameStop Launches Public Beta Version of Its NFT Marketplace

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The world’s largest retailer of video games, GameStop, said on Monday that the public beta for its non-fungible token (NFT) marketplace has begun.

The new platform is a “non-custodial, Ethereum Layer 2-based marketplace that allows participants to really control their digital assets, which are represented and safeguarded on the blockchain,” according to a statement from GameStop.

One of the wallets that consumers may link to the new marketplace is the self-custodial Ethereum wallet that GameStop released in May.

According to the business, further capabilities will soon be added to accommodate “Web3 games, more artists, and other Ethereum ecosystems.”

gamestop marketplace
GameStop Launches Public Beta Version of Its NFT Marketplace 2

GameStop has hinted about its NFT marketplace previously

Over the past few months, GameStop has made ambitions for the NFT market known to the public. The store announced its partnership with Ethereum Layer 2 developer Immutable X to introduce the NFT platform in February.

GameStop wants to be a significant participant in the NFT gaming industry, where NFTs are interactive objects utilized in video games, even though the current emphasis is mainly on artwork. It also said that the organizations will start a fund with a cap of $100 million in IMX tokens from Immutable X with the intention of awarding rewards to NFT creators.

The gaming company stated during a March earnings call that it intended to introduce the NFT platform before the end of Q2. It declared a four-for-one stock split on July 6, stating that the stockholders would receive three extra shares as a dividend. The next day, it fired its CFO, Michael Recupero, and let go of an unspecified number of staff members nationwide.

GameStop Launches NFT Beta Marketplace With Loopring

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GameStop is clasping the crypto world as it shifts its focus away from tangible items, and its long-teased NFT marketplace is now taking shape.

The shop launched a limited-functionality beta, powered by Ethereum scaling provider Loopring.

Users may now add funds to the platform using Loopring’s layer-2 scaling solution by connecting an Ethereum wallet (such as MetaMask).

You may also customize your display name and profile, however, there are currently no NFT trading capabilities.

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GameStop Launches NFT Beta Marketplace With Loopring 4

Loopring and Gamestop collaboration

According to Browman, GameStop, in collaboration with Loopring L2, seeks to give the general public “quick, affordable, and secure” access to digital ownership.

With GameStop at the “forefront of these emerging global digital economies,” they plan to return control to gamers, producers, and collectors.

He described how users may now mint NFTs directly on Loopring L2 for “fractions” of the expensive gas expenses that often occur from minting on L1, which is less than $1.

The Loopring zkRollup inherits the self-custodial security of Ethereum L1 to ensure that its users “get the strongest digital property rights.”

Immutable will power GameStop

The company has announced a $100 million award for game designers and developers as part of its partnership with Immutable X (IMX) for its NFT marketplace.

In a Securities and Exchange Commission report released on January 28, 2022, it indicated that Immutable was its first Layer 2 NFT integration for trading and minting and that Loopring will follow.

Immutable X just completed a $200 million funding round, bringing the company’s worth to $2.5 billion.

It turns out that both layer-2 technology vendors will eventually fuel GameStop’s NFT initiatives. Immutable tweeted that it is GameStop’s “preferred partner” for the marketplace and that the companies are collaborating to find game creators to launch their NFTs on the platform.

Immutable claims to have received thousands of inquiries about its IMX token incentives from game developers and NFT creators.

Immutable further stated that the Loopring integration “was not a surprise (and we welcome them!)” and that the GameStop marketplace will serve as an aggregator for NFT minting systems. However, it looks that Immutable X will attract the most attention in the market.

GameStop Announces Its Plans to Launch NFT Marketplace by July

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On March 17, 2022, GameStop revealed its schedule for launching its NFT Marketplace in its Q4 2021 earnings announcement.

This came after a mixed results report in which the corporation was able to meet revenue expectations but saw an unanticipated decrease in earnings-per-share. Despite many difficulties in the current quarter, the corporation has big expectations for the following year.

One of them is the construction and launch of the GameStop NFT Marketplace by the conclusion of GameStop’s fiscal Q2 2022.

GameStop has been eyeing NFT for a while

For quite some time, GameStop has teased intentions for an NFT Marketplace. Now, it appears that GME expects to have an operational NFT Marketplace by the end of fiscal 2022.

This isn’t the first time we’ve heard about GameStop’s ambitions for the NFT Marketplace. When the business pegged down an NFT website in May 2021, it foreshadowed the direction.

It went even farther, allowing creators to apply for the website in December 2021. However, in late January 2022, GameStop was forced to temporarily stop new applications due to a surge of creator applications and sign-ups.

Despite the outpouring of support, GameStop seemed unprepared to handle it at the time. It appears that the corporation is taking its time entering the NFT sector.

The business has recruited recruits in blockchain gaming, e-commerce and technology, product refurbishing, and operations, with a July launch scheduled.

GameStop isn’t the only retailer entering the NFT sector, which has seen record-high trade volumes since January and a surge in interest in the technology.

GameStop soon to join a long list of enterprises

Coinbase, a publicly-traded cryptocurrency company in the United States, revealed intentions to open an NFT marketplace this week. Users will be able to discover, mint, purchase, and display NFTs on Coinbase.

Despite the lack of a launch date, Coinbase met with over a hundred developers to speed up the debut of its marketplace.

With almost 2.5 million people on the Coinbase NFT queue, it will have to focus on its core video game audience if it wants to succeed.

The NFT marketplace has been busier in recent months, and it will only get more in the months ahead. LooksRare (LOOKS), a rival to OpenSea, a well-known NFT platform, entered the market in January amidst soaring trade volumes.

With Coinbase, OpenSea, and LooksRare gaining traction in the NFT industry, competition is expected to heat up.

In a recent announcement, Mark Zuckerberg said its plans to integrate NFT on Instagram.