GameStop, the world’s largest retail gaming platform, has announced that it is developing a marketplace for nonfungible tokens (NFTs). The video game, consumer electronics, and gaming merchandise retailers also have plans to set up cryptocurrency partnerships. The company is setting up an online hub for the purchase, sale, and trading of NFTs of virtual videogame merchandise such as weapons and avatar outfits.
This is seen as an effort to turn its core business activity around videogames. The company has planned a next-year launch and has invited some game publishers and developers to list NFTs on its planned marketplace.
So, what does one of the gaming world’s biggest names’ leap into the world of NFT and crypto mean? Find out here.
GameStop to Sign Partnerships with Crypto Firms
GameStop is expected to sign partnerships with a couple of crypto firms. The focus here is to share technology and develop games using NFT and blockchain technology. Similar partnerships are expected with many other crypto firms. GameStop is planning to invest tens of millions of dollars this year alone.
So, what is causing the gaming giant to take this leap into the world of cryptos and NFTs?
GameStop has been recording losses for many years and has been trying different strategies to steer the downward trend. The pandemic has played a big role in degrading its revenues. The company specializes in hard copies of games and gaming systems, but consumers now increasingly prefer downloading and streaming games online.
Overhauling its top management was one of the major steps it took to turn around its fortunes. Taking the leap into the NFT and crypto ecosystem puts GameStop on the list of the big companies trying to benefit from these newer technologies. As we know social media affects bitcoins value, let us understand how Facebook is helping blockchain to grow.
Gaming Industry & NFT/Crypto Technologies
There are already a few NFT marketplaces with some featuring tokens from gaming publishers. Recently, OpenSea, a marketplace, announced raising $300 million. The company has been able to raise its market value to $13,3 billion, beating GameStop’s value of $10 billion.
According to industry analysts, the gaming industry will have a big role to play in the adoption of NFTs, blockchain, and crypto technologies. Gamers tend to spend big on virtual merchandise and are expected to play a big role in embracing the technologies.
Some of the key points that need to be highlighted in this industry development are as follows:
- Virtual real estate and video game collectibles have become a fast-growing segment within the NFT market
- Many gaming giants have recently announced plans of selling NFTs. Some of the big names include Zynga, Ubisoft, and Square Enix Holdings.
- Many top executives and gaming industry players have raised doubts about the value of NFTs and the reasons behind developers creating them.
When it comes to GameStop’s decision, it seems the company doesn’t want to miss out on the opportunities provided by a fast-growing technology sector. The company missed out on the computer-game download trend almost a decade ago. It attempted to enter the world of video game streaming and then abandoned the efforts.
Impact of GameStop’s Turnaround Efforts
GameStop’s current turnround efforts have not yet shown any major results in terms of the company’s financial performance. During the quarter leading to October, the gaming giant recorded revenue growth. However, the losses have further grown over the same period in 2020. Hardware and accessories sales drove the revenue growth while the game software segment experienced degrowth.
According to GameStop, the company’s goal is to create something over the long term that will become a major business. The announcement by the company has seen its stocks rising sharply. This is expected to be positive news for investors who had stayed put in the company stocks while it continued to fall. However, it is worth finding out how long this rally will continue and when investors will decide to offload their positions.
The recent rally in GameStop’s shares is seen to be mirroring its 2021 run-up when retail investors infused funds to raise its share price by almost 687%. This jump took place even when the company kept losing market share and recorded growing losses. All this makes GameStop seem like a meme stock. Until it has officially launched its token on a crypto exchange and NFT marketplace, everyone will have to wait and watch for developments.
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