GameStop, the sweetheart of the modern internet, has had a brief foray into crypto, but it appears that has been moved to the backburner for the time being.
GameStop’s Move Into Web3: A Recap
For the uninitiated, let me give you a recap. GameStop as a company was circling the drain with major hedge funds shorting the stock into oblivion. This mass shorting was spotted by a user on Reddit’s /r/WallStreetBets and began a great story of the power of internet communities. To watch a video on what happened, click here. Then, in October 2021, GameStop — under Ryan Cohen’s leadership — started a Web3 hiring drive, with eight jobs pertaining to NFTs or Web3.
The project first on the viral company’s to-do list was a marketplace in partnership with Immutable. The marketplace would be (and is) 100% carbon neutral and has zero gas fees, which won over some of the crypto naysayers. Unsurprisingly, there were still detractors, with Yahoo! Finance posting an article on how GameStop’s new platform is going to be dead on arrival.
Well, the marketplace open beta launched and it was decent, albeit a little art-heavy and game-light for a GameStop marketplace, particularly given the flagship partnership with Immutable. Thankfully, just a few months ago, GameStop enabled Immutable gaming NFTs.
We’re excited to share that the @GameStopNFT Marketplace is officially live on ImmutableX!
— Immutable 🅧 – $IMX (@Immutable) October 31, 2022
So, what’s happened?
GameStop’s Change of Focus
It felt as if blockchain technology and NFTs were GameStop’s big move forward and method of capitalizing on their unlikely rescue from death. However, as of the 7th December 2022’s earnings call, it appears this will no longer be the case.
Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.
— Matt Furlong, CEO GameStop
I am a long way from being a finance expert, but this isn’t a wholly unexpected move to my eye. GameStop has been posting losses quarter-on-quarter for over a year, and although the losses are slightly less this quarter ($94.7 million) than in previous quarters, there is a significant distinction between now and this time last year. In December 2021, crypto was setting all-time highs left and right, whereas in December 2022 we are in the depths of a crypto winter.
I would suggest another key element in this mindset shift away from blockchain is a reaction to recent events. Furlong’s quote “we have not and will not risk meaningful stockholder capital in this space” clearly aims to set distance between GameStop and crypto as a whole, but it also highlights that unease may have set in among stockholders. This is compounded by GameStop’s partnership with the industry-moving disaster, FTX — though it is believed that GameStop was not directly impacted as the company had no token holdings whatsoever.
It is a disappointing decision by GameStop, and although it isn’t a binary decision where the company has turned its back on crypto entirely, it’s still a blow for the industry. I am a supporter of GameStop, but it’s hard not to see this move as another example of fair-weather Web3 builders — flying the blockchain flag as ATHs are broken, but turning tail when the graphs are red. I will take some solace in Furlong’s reiteration of blockchain’s long-term potential for gaming, but the taste left by this news is sour, however justifiable the decision may be for GameStop’s immediate survival.