Analysis: GameStop NFT trading declines in the first week of the marketplace

Analysis: GameStop NFT trading declines in the first week of the marketplace

If GameStop's NFT business is to go "to the moon," the total trading volume on the platform has bent in the wrong direction so far ...
Enlarge / If GameStop’s NFT business is going to go “to the moon”, the total trading volume on the platform has bent in the wrong direction so far …

Last week, when Ars analyzed the first day of NFT sales on GameStop’s highly hyped crypto marketplace, some boosters were quick to suggest that this was just a starting point and that interest and trading volume may increase as time goes on and more people discover trading. . platform. During the first week of the marketplace, however, interest in buying GameStop NFTs appears to be declining compared to performance on launch day.

An Ars-exclusive analysis of the GameStop NFT marketplace now shows that it has been responsible for approximately 5,254 ETH in total trading volume in the first week (worth approximately $ 7.8 million at current exchange rates). This is a daily average of around 750 ETH ($ 1.117 million) in total trading volume. GameStop charges a fee of 2.25 percent of all these trades, which represents a daily average of 16.9 ETH ($ 25,113) in direct revenue to the company. In all, six of the more than 300 collections on the platform are responsible for the majority of this trading volume.

(Note: Constantly volatile ETH prices have increased by about 38 percent since last Tuesday, when Ars conducted its launch day analysis of the marketplace. Unless otherwise stated, we use the current ETH spot price – $ 1,488.06 as of this writing – for conversions here, although transactions earlier in the week were likely to take place at lower dollar / ETH rates.)

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The average daily trading volume during the first week is a significant decrease from the marketplace’s launch day, when it processed 1,831.81 ETH in total trading volume (worth around $ 1.976 million then or $ 2.725 million at today’s exchange rate), according to Ars’ analysis. On the first day, GameStop earned approximately 41.2 ETH in transaction fees (worth approximately $ 44,500 then or $ 61,331 today).

Enlarge / “GameStop Astronaut MetaBoy” NFT has been one of the hottest on the market lately, bringing in over 163 ETH in total trading volume in less than a week.

Of the hundreds of NFT collections that saw some trading activity on the first day of the marketplace, the median collection saw average daily volume shrink by about 50 percent during the first week of trading (compared to launch day volume). It does not include 34 collections that have not yet seen a single trade in the marketplace, of which 25 have been available since day one.

And dozens of new NFT collections on the market (ie those who saw their first transactions after the marketplace’s launch day) do not fill that gap. These 85 or so collections are responsible for only 556 ETH of the total trading volume in the last six days (approximately $ 828,575).

Wrong direction

No matter how you break it down, the total activity on the GameStop NFT marketplace has declined in the days since the service was launched. This is perhaps not so surprising, given the months of pent-up demand among cryptocurrencies and GameStop stock enthusiasts that were unleashed on the platform’s launch day last Monday. It is also not so surprising in connection with the broader NFT market, where a leading marketplace such as OpenSea has seen daily trading volume fall by about 90 percent since the peak in January.

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Still, the downturn is a setback for GameStop and crypto boosters who hope the introduction of NFT trading can revolutionize GameStop’s brick-and-mortar-focused business model. Currently, if trading on the GameStop NFT Marketplace continues at the same weekly rate, it will see a total trading volume of around 273,000 ETH in the first year. It’s worth around $ 406 million today, or about just 6.75 percent of GameStop’s $ 6.011 billion in net sales for the 2021 fiscal year.

Of this volume, GameStop itself will incur approximately 6,147 ETH in transaction fees (approximately $ 9.15 million), which is only approximately 0.15 percent of GameStop’s net sales in fiscal year 2021 or 2.4 percent of the loss of $ 381 million in fiscal year 2021. To and with if GameStop HODLs are all ETH and the cryptocurrency rises back to its highest price of around 4800 dollars, then these annual transaction fees will be worth only 29.5 million dollars (approximately 0.49 percent of net sales in the financial year 2021; 7.7 percent of the loss in the financial year 2021).

Making tens of millions of dollars a year from a whole new industry is not something, of course, especially when GameStop does not have to worry too much in terms of inventory or physical overhead to sell NFTs. Still, this is not the kind of bottom line performance that will affect a multi-billion dollar company in the long run.

It’s still early for GameStop’s NFT business, and the broader NFT market may still return from its current hibernation. Or perhaps the possible integration of “web3 gaming” assets into the GameStop marketplace (which the retailer says will be added “over time”) will help it “cement itself as the ultimate destination in the new gaming paradigm”, as Immutables Robbie Ferguson suggested when announces a deal with GameStop in February.

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For now, however, GameStop and its boosters will be watching and waiting for such a turnaround operation to take place. Until and unless it does, the GameStop NFT marketplace appears to be a relatively small part of the international reseller’s business going forward.

Construction image of the MetaBoy / GameStop NFT marketplace

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