GameStop launches the NFT marketplace as it seeks online growth

GameStop on Monday announced the long-awaited debut of its online marketplace for non-fungible tokens, or NFTs, in an effort to reinvent its business and monetize consumers’ use of cryptocurrencies and blockchain technology.

The platform, now open to the public for beta testing, allows users to connect to their own digital assets, including the recently launched GameStop Wallet, the company said in a press release. They will then be able to buy, sell and trade NFTs of virtual goods. Over time, the marketplace will expand to offer other features such as Web3 games, GameStop said.

This is the latest push from video game retailer, now led by Chewy founder and activist investor Ryan Cohen, to invest in a digital future. GameStop is undergoing a turnaround operation after several years of financial struggles, partly weighed down by its massive real estate footprint and the video game industry’s rapid shift online.

Cohen, whose 2020 investment in GameStop helped fuel a so-called meme frenzy, was used last year to lead this turnaround operation. He brought in a recent list of business leaders, including current CEO Matt Furlong, formerly at Amazon. He also elected another former Amazon boss, Mike Recupero, as CFO.

The company is trying to win over investors who may have written off GameStop as an older retailer with too many store fronts in outdated malls. GameStop operated a total of 4,573 stores, including 3,018 in the United States, as of January 29, according to an annual registration. In addition to its namesake, it also owns the EB Games and Micromania banners.

The company now uses busy areas such as NFTs for growth. The unique digital resources have attracted both enthusiasm and skepticism. Some retail industry watchdogs expect them to be a warm Christmas present. About half a million NFTs are expected to be purchased from dealers between November and December, giving a total market value of $ 54 million, according to Salesforce.

However, others may see that the marketplace is coming a little too late. Sales of virtual digital artwork and avatars can cool off from their pandemic-driven heights. GameStop must also compete with other established NFT marketplaces, including the giant OpenSea.

And so far, the company’s digital first turnaround operation has not been without road bumps. Last week, GameStop Recupero kicked off and announced layoffs across departments. Recupero, who started at the retailer about a year ago, was “fired because he did not fit the culture” and was “for hands off,” a person familiar with the matter told CNBC. He was pushed out by Cohen, the person said.

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

The video game retailer has struggled to stop losses in recent years, even though sales of hardware, software and collectibles are growing.

During the three-month period ending April 30, GameStop reported a net loss of $ 157.9 million on revenue of $ 1.38 billion. A year earlier, the company had a net loss of $ 66 million of $ 1.27 billion in revenue.

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