Author: Andrew Hayward & Kate Irwin, Decrypt
Compiled by: Felix, PANews
Less than three years after first hinting at its interest in NFTs, GameStop has abandoned its NFT marketplace. On January 13, GameStop announced that starting February 2, its NFT platform would no longer have the ability to buy and sell assets, but NFTs would still be viewable online.
The gaming retailer, which began as a brick-and-mortar store in the U.S. in 1984, has struggled to turn a profit in recent years. It finally turned a profit for the first time in years in late 2022, but that came after company-wide layoffs and the exit of some European businesses.
GameStop has been in a state of transition, and the latest victim is its NFT marketplace. Here’s how GameStop’s NFT plans began.
April 2021: GameStop recruits blockchain analysts
As early as April 2021, a job posting for a blockchain security analyst posted by GameStop indicated that the retailer was planning to launch NFTs. A fintech recruiter said at the time that since the job posting focused on security, GameStop was likely planning to launch something "serious" in the crypto space.
May 2021: GameStop launches mystery website
In May 2021, GameStop announced through a minimalist landing page that it would continue to recruit employees for its blockchain project. At the time, it was unclear whether the retailer would launch an NFT series, tokens, a market, or something else.
However, the landing page included some hints and Easter eggs, such as a link to a GameStop Ethereum smart contract that earned NFTs from Immutable’s Gods Unchained card game. The site also hid an “Endless Runner” browser game.
January 2022: Establishment of blockchain department
By January 2022, GameStop had established its own blockchain division and hired 20 employees to work on its then-upcoming crypto initiatives. GameStop’s stock price surged 31% after the news broke.
February 2022: Deal with Immutable + $100 million grant
In February 2022, GameStop announced a $100 million grant in partnership with crypto startup Immutable to provide IMX tokens to developers who want to use the Immutable X blockchain and release NFTs with GameStop.
The news also confirms that GameStop will use the Immutable X blockchain for its upcoming NFT marketplace (GameStop’s NFT marketplace also uses Loopring, another Ethereum extension network).
So far, GameStop has remained silent about its blockchain plans.
February 2022: GameStop sells $47 million worth of IMX
Embarrassingly, GameStop sold $47 million worth of IMX tokens, causing the price of IMX to plummet 23% in 24 hours. While the token payment was part of a pre-arranged deal, it could be seen as GameStop looking to immediately cash out and profit from its crypto partnerships before launching a crypto product.
May 2022: GameStop launches NFT Twitter account and releases wallet
GameStop has set up a GameStop NFT Twitter account specifically to promote its NFT plans.
“What the internet did for communication, blockchain does for value,” GameStop’s NFT account wrote in May 2022. To promote the potential benefits of cryptocurrency, GameStop said: “A public, permissionless, trusted, neutral value layer [empowers] players.”
However, at this point, NFT sales have entered a period of stagnation.
July 2022: Market launch and layoffs
In July 2022, GameStop fired its chief financial officer and laid off all employees in its business unit, a month after reporting huge losses. A few days later, GameStop launched a beta version of its anticipated NFT marketplace, which required NFT creators to submit an application and be approved before they could go online or mint.
GameStop’s NFT market does not provide any data transparency except for the Top 50 series of statistics with the highest transaction volume. In the first two days of its launch, the market traded NFTs worth more than 3,100 ETH, which was about $3.5 million at the time. Although it was not much compared to the largest NFT markets such as OpenSea at the time, GameStop surpassed Coinbase’s NFT market.
In the meantime, GameStop continues to encourage developers to apply for its $100 million grant program.
October 2022: GameStop finally adds gaming NFTs
Three months after launching its NFT marketplace, GameStop has finally added Immutable X gaming NFTs to its platform. This means that NFT props or assets from games such as Gods Unchained, Illuvium, and Guild of Guardians can be traded through GameStop's NFT marketplace. Prior to this, GameStop only offered avatar-style NFTs and art-style NFTs on its platform.
According to a U.S. SEC filing, in November 2022, GameStop released a version for iOS mobile devices through Apple's App Store, further promoting the development of cryptocurrency and NFT wallets.
March 2023: SEC filings show business is falling short of expectations
GameStop wrote in a risk assessment document submitted to the U.S. SEC in March 2023: "Our new digital asset products and services may not achieve the expected results and may expose us to new risks."
“If we are unable to successfully implement and operate these digital asset initiatives, we could incur unexpected costs and losses and face other adverse consequences, such as negative reputational impact.”
GameStop further stated that its blockchain product exposes the company to "risks associated with any new product, including, but not limited to, the risk of accurately predicting market demand and acceptance, risks of creator and buyer acceptance, technical issues with product operations, and legal and regulatory risks."
June 2023: GameStop fires CEO
Within a year of launching its NFT marketplace, GameStop fired the CEO who led the company’s push into blockchain and NFTs.
August 2023: GameStop cancels crypto wallet
In August 2023, GameStop quietly revealed via a pop-up message on its NFT marketplace website that it would stop operating its crypto wallet in November due to "regulatory uncertainty in the crypto space."
Meanwhile, crypto litigation between exchanges such as Coinbase and Binance and the U.S. SEC is still ongoing.
September 2023: NFT Twitter account goes silent
GameStop’s NFT-focused Twitter account, which was primarily used to promote artists and collectibles approved by its NFT marketplace, has stopped posting content. But as of December 2023, the account was still sporadically replying to some users.
It's unclear whether the employee responsible for the account was fired, reassigned to another position, or simply told to stop posting "gm" content on the account.
November 2023: GameStop Wallet Service Discontinued
GameStop’s crypto wallet, which was initially released for the Chrome browser and iOS, gave users about three months to transfer their assets before shutting down in November.
December 2023: Minimum returns for NFTs
Last December, GameStop's quarterly earnings report showed that the company made $2.8 million in profits from the sale of digital assets (referring to NFTs) from January to the end of October 2023. This is a far cry from the $77.4 million in digital asset sales in the same period of 2022.
The report showed that GameStop had an operating net loss of $56.4 million during the same period.
February 2024: GameStop NFT Marketplace Closes
By January of this year, GameStop had made its intentions clear: it would shut down its NFT marketplace. However, the publicly traded company once again remained silent on its plans to shut down its NFT platform, once again choosing to communicate this information through a small pop-up message on its NFT website.
On February 2, as planned, the NFT marketplace cut off all trading functionality, meaning users can still view assets on the platform but cannot actually trade them. All NFTs previously purchased or sold through the platform remain on their respective blockchains and can be accessed and/or traded in other ways.
GameStop’s foray into cryptocurrency comes as the company struggles to become profitable, and if the company’s earnings report is any indication, NFTs haven’t quite solved the profitability problem.
Related reading: OpenSea has fallen from grace, CEO admits he may consider acquisitions and being acquired