GameStop launches NFT marketplace to seek growth online

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GameStop on Monday announced the long-awaited debut of its online marketplace for non-fungible tokens, or NFTs, to reinvent its business and capitalize on consumer acceptance of cryptocurrencies and blockchain technology.

The platform, which is now publicly available for beta testing, allows users to connect their own digital asset wallets, including the recently launched GameStop wallet, the company said in a press release. You can then buy, sell and trade NFTs of virtual goods. Over time, the marketplace will expand to offer other features like Web3 gaming, GameStop said.

This is the latest foray into investing in a digital future from the video game retailer, now led by Chewy founder and activist investor Ryan Cohen. GameStop is in a reversal after several years of financial troubles, weighed in part by its massive real estate presence and the video game industry’s rapid shift to the Internet.

Cohen, whose investment in GameStop helped fuel a so-called meme craze in 2020, was hired last year to lead that turnaround effort. He brought in a new roster of company leaders, including current Chief Executive Officer Matt Furlong, formerly of Amazon. He’s also brought on another former Amazon exec, Mike Recupero, as chief financial officer.

The company is trying to attract investors who may have written GameStop off as an old retailer with too many storefronts in outdated malls. According to an annual filing, GameStop operated a total of 4,573 stores as of Jan. 29, including 3,018 in the United States. In addition to its eponymous store, it also owns the banners of EB Games and Micromania.

Now the company is tapping into busy areas like NFTs for growth. The unique digital assets have aroused both enthusiasm and skepticism. Some retail industry observers expect it to be a hot Christmas present. About half a million NFTs are expected to be purchased by retailers between November and December, according to Salesforce, for a total market value of $54 million.

A screenshot of GameStop’s NFT Marketplace, where

Source: Game Stop

However, others may see the marketplace a little too late. Sales of virtual digital artworks and avatars may cool off from their pandemic-related highs. GameStop also has to compete with other established NFT marketplaces, including giant OpenSea.

And so far, the company’s digital-first turnaround hasn’t been without bumps. Last week, GameStop fired Recupero and announced layoffs across all departments. Recupero, who joined the retailer about a year ago, was “fired because he didn’t fit the right culture” and was “too loose,” a person familiar with the matter told CNBC. He was driven out by Cohen, the person said.

Recupero was not immediately available to respond to CNBC’s request for comment.

The video games retailer has struggled to contain losses in recent years, even as its sales of hardware, software, and collectibles have grown.

For the three months ended April 30, GameStop reported a net loss of $157.9 million on revenue of $1.38 billion. A year earlier, the company reported a net loss of $66 million on sales of $1.27 billion.

The company has also not provided a financial outlook since the start of the Covid-19 pandemic. Furlong said in March that GameStop is making investments to encourage customer loyalty and build its brand, which has weighed on profitability.

https://www.cnbc.com/2022/07/11/gamestop-launches-nft-marketplace-as-it-hunts-for-growth-online.html GameStop launches NFT marketplace to seek growth online

Chrissy Callahan

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