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GameStop, which has been at the heart of the recent retail-centric frenzy, reportedly aims to create a marketplace for non-fungible tokens (NFTs). The gaming retailer also plans to ink several cryptocurrency partnerships and push deeper into the booming crypto market, expanding into one of the most hyped technology sectors.
GME Pivots Toward Digital Age
In late May, GameStop released the website nft.gamestop.com, which suggested that the gaming retailer has chosen to expand into NFTs. Back then, very little was known, and the website only listed an Ethereum address that pointed to a token by the name of GME.
However, the Wall Street Journal, citing ‘people familiar with the company’s plans’, now reports that the video game retailer is launching a crypto division. The unit will develop an NFT marketplace and create games and items for the marketplace by establishing cryptocurrency partnerships.
The gaming retailer has employed more than 20 people to run its crypto division. Further detailing the plans, the report noted that GameStop’s NFT marketplace would enable buying, selling, and trading NFTs of game items such as weapons, outfits, and avatars.
Moreover, the retailer is reportedly close to striking deals with two crypto firms “to share technology and co-invest in the development of games that use blockchain and NFT technology, as well as other NFT-related projects”. The report added:
“The retailer expects to enter into similar agreements with a dozen or more crypto companies and invest tens of millions of dollars in them this year.”
OpenSea is currently dominating the NFT realm. The platform currently accounts for over 97% of the market, and garnered a valuation of $13.3 billion during its most recent fundraising round. Notably, the funding round increased OpenSea’s valuation by more than 9x compared to the previous round.
Meanwhile, GameStop shares have received a boost following the report. GME shares surged by around 30% in extended trading Thursday. At the time of writing, GME is up by more than 23% in pre-market.
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GME: From Impending Bankruptcy to Prosperity
The push into NFTs comes as part of the company’s plans to move beyond its core videogame business and dabble into much-hyped areas in technology. Arguably, this is fundamental for the company—which is, at its core, a brick-and-mortar video game store—to prosper in the digital world.
In fact, the company had been at a loss for years before emerging at the center of a stock-trading frenzy. GME was a consistently shorted stock by institutional investors last year, who were profiting from the company’s condition, which was worsened by the economic crisis and pandemic pressure.
However, some retail investors, more notably Keith Gill, fought to save the beleaguered video game retailer, arguing that it has the potential to prosper. Gill, the most prominent persona in the GameStop saga, was called to testify before the House Financial Services Committee. Here’s a portion of his testimony:
“I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong.”
Gill added:
“First, the market was underestimating the prospects of GameStop’s legacy business and overestimating the likelihood of its going bankrupt.
…
Second, I believed – and I continue to believe – that GameStop has the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry.”
Nearly one year after Gill’s comments, it seems that he has been right in his prediction. The push into the digital world gives GME an immense potential for growth, even beyond Gill’s expected “thriving $200 billion gaming industry” — and into a trillions-worth market for digital assets and NFTs.
Do you think GME’s NFT marketplace will be able to compete with OpenSea, as well as NFT marketplaces by the likes of Coinbase and FTX? Let us know in the comments below.