The Rise and Fall of GameStop’s NFT Business: Is It Profitable for Traditional Companies to Enter the NFT Space?
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The Rise and Fall of GameStop’s NFT Business: Is It Profitable for Traditional Companies to Enter the NFT Space?
GameStop generated $2.8 million in revenue from the sale of digital assets (referring to NFTs) between January and the end of October 2023.
Navigating Web3 tides with focused insightsBy Andrew Hayward
Translated by TechFlow
NFTs were once not only darlings of the crypto market but also a panacea for traditional companies seeking attention and business growth.
Among them was the well-known GameStop.
Readers with memory will recall that in 2021, GameStop’s stock became the stage for a legendary retail investor uprising against Wall Street elites. Institutional investors shorted the stock, believing its traditional retail business was weakening, but overwhelming retail buying triggered an epic short squeeze, inflicting massive financial losses on hedge funds.
GameStop itself actively embraced NFTs in an attempt to revitalize its struggling business.
Yet less than three years after first signaling interest in NFTs, GameStop has decided to shut down its NFT marketplace.
From symbol of retail empowerment, to embracing crypto for transformation, to now quietly exiting—how did GameStop get here, and why did it abandon this venture? Are NFTs actually a profitable business for traditional companies?
Perhaps we can find some answers in the timeline of GameStop’s shifting strategy as compiled by Decrypt.
April 2021: GameStop hires blockchain analyst
In April 2021, GameStop posted a job listing for a blockchain security analyst, hinting at plans to enter the NFT space. At the time, a fintech recruiter noted that given the role's focus on security, GameStop was likely planning something “serious” in the crypto domain.
May 2021: GameStop launches mysterious website
In May 2021, GameStop launched a minimalist landing page indicating it was hiring staff for a blockchain project. It remained unclear whether the company planned to release NFT collectibles, tokens, a marketplace, or something entirely different.
However, the landing page included several hints and Easter eggs, such as a link to a GameStop Ethereum smart contract that had acquired an NFT from Immutable’s Gods Unchained card game. The teaser site also hid an “endless runner” browser game.
January 2022: Blockchain division established
By January 2022, GameStop had formed its blockchain division and hired 20 employees for its upcoming crypto initiatives. Following the news, GameStop’s stock surged 31%.
February 2022: Partnership with Immutable + $100 million fund
In February 2022, GameStop announced a partnership with crypto startup Immutable to launch a $100 million grant fund, providing developers with Immutable’s IMX tokens if they built NFT projects on the Immutable X blockchain and collaborated with GameStop.
The announcement confirmed that GameStop would use the Immutable X blockchain for its upcoming NFT marketplace (the marketplace also used another Ethereum scaling network, Loopring).
Up to this point, GameStop remained largely silent about its broader blockchain plans.
February 2022: GameStop sells $47 million worth of IMX
The situation turned awkward when GameStop sold $47 million worth of IMX tokens, causing the token’s price to plummet 23% within 24 hours. While the sale was part of a prearranged agreement, outsiders might interpret this as GameStop seeking immediate profits from its crypto partnership—even before launching any crypto products.
May 2022: GameStop launches NFT Twitter account and wallet
GameStop created a dedicated Twitter account, GameStop NFT, to promote its NFT initiative. In May 2022, the account tweeted: “Blockchain does for value what the internet did for communication.” It added that a public, permissionless, trustworthy layer for value empowers players and highlighted potential benefits of crypto. However, by this time, NFT market sales were already beginning to decline.
That same month, GameStop also launched its browser extension crypto and NFT wallet, tweeting frequent patch updates throughout the year.
July 2022: NFT marketplace launch and layoffs
In July 2022, one month after reporting heavy losses, GameStop fired its CFO and laid off employees across business units. Days later, it launched the long-awaited beta version of its NFT marketplace—a platform requiring NFT creators to apply and be approved before listing or minting items.
In its first two days, GameStop’s NFT marketplace recorded over 3,100 ETH in trading volume, worth about $3.5 million at the time. Though modest compared to giants like OpenSea, it outperformed Coinbase’s NFT marketplace efforts.
During this period, GameStop continued encouraging developers to apply for its $100 million grant program.
October 2022: GameStop finally adds gaming NFTs
Three months after launching its NFT marketplace, GameStop finally added Immutable X gaming NFTs to its platform. This meant NFT items or assets from games like Gods Unchained, Illuvium, and Guild of Guardians could now be bought and sold via GameStop’s NFT marketplace. Previously, GameStop had only offered avatar-style and art NFTs on its platform.
According to a filing with the U.S. Securities and Exchange Commission (SEC), in November 2022, GameStop released an iOS version of its crypto and NFT wallet through Apple’s App Store, further advancing its wallet development.
March 2023: SEC filing reveals NFT plans falling short
In a March 2023 SEC filing, GameStop stated in its risk assessment of blockchain: “Our new digital asset products and services may not achieve the results we expect and may expose us to new risks.”
The company added: “If we are unable to successfully implement and operate these digital asset initiatives, we may incur unexpected costs and losses, and face other adverse consequences, such as reputational damage.”
GameStop further noted that its blockchain products exposed it to risks “similar to those associated with any new product,” including but not limited to our ability to accurately forecast market demand and adoption, acceptance by creators and buyers, technical issues in operating the product, and legal and regulatory risks.”
June 2023: GameStop fires CEO
Within a year of launching its NFT marketplace, GameStop dismissed the CEO who led its push into blockchain and NFTs.
August 2023: GameStop cancels crypto wallet
In August 2023, GameStop announced on its NFT marketplace website that it would cease development of its crypto wallet by November due to “regulatory uncertainty in the cryptocurrency space.”
Around this time, high-profile crypto lawsuits involving exchanges like Coinbase and Binance against the SEC were ongoing.
September 2023: NFT Twitter account goes silent
GameStop’s NFT-focused Twitter account—which primarily promoted artists and collections endorsed by its NFT marketplace—ceased posting content. Though until December 2023, it sporadically replied to some users.
It remains unclear whether the employee managing the account was fired, reassigned, or simply instructed to stop posting content like “gm.”
November 2023: GameStop wallet shuts down
GameStop gave its crypto wallet users about three months to transfer their assets out before shutting down the service in November. The wallet was initially launched for Chrome and iOS.
December 2023: NFT revenue proves minimal
In December 2023, GameStop’s quarterly earnings report revealed that the company generated $2.8 million in revenue from digital asset sales (i.e., NFTs) between January and October 2023. This paled in comparison to $77 million in digital asset sales during the same period in 2022.
January 2024: GameStop NFT marketplace to close
By January, GameStop made its intentions clear: its NFT marketplace would shut down. Yet the publicly traded company remained silent about its closure plans and declined to comment on related inquiries.
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