GameStop is reportedly planning to enter the Web 3.0 space with moves into non-fungible tokens (NFTs) and cryptocurrency.
According to CNBC, reporting on a story first posted in the Wall Street Journal, the specialty video game retailer is planning to create a marketplace for NFTs. GameStop reportedly has hired more than 20 experts in blockchain and cryptocurrency technologies in the past several months as part of advance work it has been quietly conducting.
NFTs are unique digital assets stored on a blockchain ledger which certifies the owner. There is no way for an NFT to have more than one owner, and only the certified owner can sell it. GameStop is also reportedly developing partnerships with cryptocurrency companies as part of its NFT marketplace development.
GameStop may view NFTs as a way to create new revenue streams, relieve supply chain and inventory pressures, and increase its stock value. The companylost $105.4 million, or $1.39 a share, in the quarter ended Oct. 30, 2021, compared with a loss of $19 million, or $0.29 a share, in the year-ago period.
Inventory was $1.141 billion at the close of the quarter, compared to $861 million at the close of the prior year’s third quarter. GameStop said the increase reflected its focus on “front-loading investments “in inventory to meet increased customer demand and mitigate supply chain issues.”
In one bright note, sales increased to $1.3 billion from $1 billion, topping estimates of $1.19 billion. In initial morning trading on Jan. 7, following media reports of its NFT marketplace plans, GameStop’s shares rose more than 10%.
“GameStop is in a very unique position, because a lot of these NFT projects are starting to add gaming utility behind the NFTs themselves,” Adam Hollander, an NFT investor and creator of the “Hungry Wolves” NFT collection, told CNBC. “GameStop is well-positioned, in my opinion, to be able to capitalize on that they have hundreds of millions of people that play video games that least recognize GameStop as a credible brand.”
In recent months, NFTs have experienced a dramatic surge in popularity among retailers. In October 2021, specialty fashion brand DKNY unveiled a new logo inspired by its mural which was on display for over a decade on Houston Street in New York City. The NFT was created in partnership with Paris-based art collective Obvious, which works with the latest models of deep learning to create artificial intelligence (AI)-based artwork. In addition to visuals, the NFT includes a soundscape of news reports, nostalgic radio voiceovers, and testimonials on what makes New York City.
In addition, pizza chain Domino’s resurrected its own former “Noid” advertising campaign in a recent series of NFTs, and eBay and Shopify both now permit their purchase and sale. And CKE Restaurants banners Carl's Jr. and Hardee's are partnering with actress and supermodel Charlotte Mckinney for an NFT promotion featuring one of Mckinney's “All-Natural Burger” bite shots from a 2015 advertising campaign.