The sector that once attracted top gunners like Adidas, Gucci, Lamborghini and others is now turning their attention elsewhere. American gaming retailer GameStop is saying goodbye to its non-fungible token (NFT) operations. The organization has officially announced that they will be shutting down their NFT marketplace that supports digital assets in Ethereum (ETH)-based networks Immutable X (IMX) and Loopring (LRC).Thank you for reading this post, don't forget to subscribe!
NFT fails to be a driver of growth
“Due to the continued regulatory uncertainty of the crypto space, GameStop has decided to shut down our NFT marketplace,” GameStop shared on its NFT website. This decision will be effective from February 2, 2024. Looping expressed his gratitude in an X (formerly Twitter) post.
#gamestop NFT market is shutting down
we would like to thank @GameStop To select Loopring L2 as integration partner. It was a lot of fun working with the team there.
Producer: The future doesn’t stop here. Looping L2 has become the home of amazing NFT artists,… pic.twitter.com/B6H57kUDBg
– Looping💙 (@loopringorg) 12 January 2024
GameStop’s NFT journey will begin in July 2022. This was a bold move, as the crypto market was witnessing a major decline due to the collapse of Luna Protocol. The bear market lasted for the rest of the year due to the crash of FTX, one of the crypto powerhouses.
The bull market of 2021 gave the company the advantage of taking advantage of a thriving gaming segment at the time. This year can be considered the best time for crypto as the market capitalization has reached its all-time high. Furthermore, it had a direct impact on the NFT market as the volume in this segment increased by 21,000 percent.
However, this rise was short-lived for what happened next. In August 2023, citing regulatory concerns, the company dissolved its digital wallet offered for iOS and the Chrome browser. Concerns were heightened after the United States regulator Securities and Exchange Commission (SEC) cracked down on major crypto exchanges.
According to gaming blog Game Developer, the company may have been working on this decision before the SEC action. His layoff in December 2022 had a deep impact on the team working on the Ethereum-based wallet. The company advised users that “all customers should ensure access to their secret passphrase by October 1, 2023.” They also suggested compatible wallets for their assets, including MetaMask.
The losses reported by the company in June 2022 were to be offset by profits from non-fungible tokens, Web3 and crypto exploration. According to GameStop, the company lost about $160 million in the first quarter of 2022. Strauss Zelnick, CEO of video game company Take-Two Interactive, said at the time that organizations going after blockchain-based metaverse assets “cannot end well.”
NFTs aren’t exactly the apple of traditional gamers’ eyes, in fact, they are far from it. Traditional gamers are not in favor of integrating blockchain into mainstream games as they believe it will impact the entertainment value of the games. Some people also believe that greenhouse gases (GHGs) emitted through blockchain operations have a negative impact on the environment.
GameStop stock, listed as GME on the New York Stock Exchange (NYSE), has declined about 16 percent since the beginning of 2024. Yesterday, its positions closed at $14.75 after falling more than 3 percent throughout Friday’s session.
Anurag has been working as a native writer for The Coin Republic since 2021. They love to exercise their curiosity and research a topic in depth. Although he covers various aspects of the crypto industry, he is quite passionate about Web3, NFTs, gaming, and the metaverse, and sees them as the future of the (digital) economy. A reader and writer at heart, he calls himself an “average guitar player” and a keen footballer.