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- 1 GameStop’s tryst with NFTs began in July 2022.
- 2 GameStop (GME) shares closed at $14.75 after losing over 3 percent throughout Friday’s session.
The sector that attracted top guns like Adidas, Gucci, Lamborghini, and more is now deflecting them. American gaming retailer GameStop is bidding farewell to its non-fungible token (NFT) operations. The organization has officially announced that they will stop their NFT marketplace which supports digital assets across Ethereum (ETH)-based networks Immutable X (IMX) and Loopring (LRC).
NFT Failed To Become a Vector of Growth
GameStop shared on their NFT website that “GameStop has decided to wind down our NFT marketplace due to the continuing regulatory uncertainty of the crypto space.” The decision will be effective from February 2nd, 2024. Loopring shared their gratitude in a X (formerly Twitter) post.
GameStop’s NFT journey began in July 2022. It was a daring move given that the crypto market was witnessing a downtime majorly due to the Luna protocol collapse. The bear market persisted for the rest of the year as one of the crypto powerhouses, FTX, crashed.
The bull market of 2021 gave the company an advantage to leverage a flourishing gaming segment at that time. The year can be deemed the best period for crypto as market capitalization reached its all-time high. Furthermore, it had a direct impact on the NFT market as volume in this segment grew by 21,000 percent.
However, the growth was short lived for what followed next. In August 2023, citing regulatory concerns, the company dissolved their digital wallet it offered for iOS and Chrome browsers. Concerns were raised after the United States regulatory watchdog Securities and Exchange Commission (SEC) cracked down on major crypto exchanges.
According to gaming blog Game Developer, the company might have been working on the decision prior to SEC’s crackdown. Their December 2022 layoffs had a profound impact on the team working on Ethereum-based wallet. The company advised users “that all customers ensure that they have access to their Secret Passphrase by October 1, 2023.” They further suggested compatible wallets for their assets including MetaMask.
Pursuit for non-fungible tokens, web3, and crypto were supposed to make up for the lost profits the company reported in June 2022. According to GameStop, the company lost nearly $160 Million in Q1 2022. CEO of video game company Take Two Interactive, Strauss Zelnick, noted at the time that organizations going after blockchain-based metaverse properties “may not end well.”
NFTs are not exactly the apple of traditional gamers’ eye, in fact, they are far from that. Traditional gamers do not favor integration of blockchain in mainstream games as they believe it will affect the entertainment value of the games. Some also believe greenhouse gasses (GHG) emitted through blockchain operations impact the environment negatively.
GameStop stock listed as GME on New York Stock Exchange (NYSE) has lost almost 16 percent since 2024 began. Yesterday, it closed its position at $14.75 after losing over 3 percent throughout Friday’s session.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
