Video game retailer GameStop (GME) has launched an online marketplace for non-fungible tokens (NFTs).
GameStop said the new NFT marketplace will help to diversify its business and enable the struggling bricks-and-mortar retailer to benefit from cryptocurrencies and blockchain technologies.
However, some analysts are questioning the timing of the NFT marketplace, coming as it does amid a crash in prices for cryptocurrencies and demand for digital products. The price of Bitcoin (BTC), the biggest cryptocurrency, is down 71% from a peak of $68,000 U.S. reached last fall.
The new NFT platform, which is now open to the public for beta testing, allows users to connect their own digital wallets, including the recently launched “GameStop Wallet,” and then buy, sell and trade NFTs.
GameStop said in a news release that the marketplace will be expanded to eventually offer other features such as Web3 gaming.
GameStop’s push into NFTs comes as the company tries to turnaround its business after years of declining sales and poor financial results. GameStop has been hurt by the videogame industry’s shift online and away from buying games on physical discs from retail outlets.
The company is trying to win over investors who have written GameStop off as a poorly run legacy retailer. GameStop operates a total of 4,573 retail stores, including 3,018 in the U.S. The company also owns the EB Games and Micromania retail brands.
GameStop is also known as the “original meme stock,” and its shares have been caught in a short squeeze on several occasions over the past 18 months, sending them up to unsustainable levels.
The company hasn’t provided a financial outlook since the start of the pandemic in 2020. Year to date, GameStop’s stock has declined 15% to trade at $130.09 U.S. per share.
The company is tapping into NFTs to grow financially. However, some analysts are saying that the new NFT marketplace is coming a little too late as sales of digital artwork and digital avatars is cooling off from their pandemic highs.
GameStop must also compete with established NFT marketplaces, such as industry leader OpenSea.
GameStop’s losses have been growing this year. In the three-months ended April 30, the company reported a net loss of $157.9 million U.S. on revenues of $1.38 billion U.S. A year earlier, GameStop reported a $66 million U.S. net loss on $1.27 billion U.S. in revenue.
