GameStop News: Crypto Initiatives Decline

GameStop To Drop Crypto Initiatives Now After Significant Loss

GameStop, the gaming giant has withdrawn itself from crypto initiatives after facing a huge loss. The company suffered a net loss of $94.7 million in the third quarter (Q3). However, it seems that it will continue to move forward with NFT and blockchain technology plans.

GameStop Crypto Decline: The Announcement

The video game retailer, GameStop has announced that it will no longer take risks in the crypto assets as they have massively lost around $95 million. The company had to fire workers from its digital assets department owing to the situation. 

Matt Furlong, the GameStop CEO stated,

“We have proactively limited exposure to cryptocurrencies during the year and do not currently own a meaningful amount of any token.”

He added,

“Despite our continued belief that digital assets in the gaming industry have long-term potential, we have not and will not take a risk.”

At the start of the year, the company considered cryptocurrency, NFTs, or non-fungible tokens as well as the Web3 applications as developmental areas possessing great potential. GameStop had claimed that these sectors seem to be increasingly relevant for future gamers.

The company is looking forward to investing more in NFTs or collectibles, used goods, and gaming. That said, it seems that the company is having a strong grip on the NFT sector. The gaming company has also mentioned in a filing with the Securities and Exchange Commission (SEC) dated the 7th of December 2022,

“We are also pursuing, and planning to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology.”

The Next Steps…

As the filing mentions, GameStop is not planning to withdraw completely from blockchain but has a stronger grip over the collectibles and NFTs. The company was reluctant to make any statement on if it would keep on working in the NFT marketplace. The gaming company has promoted various Web3-based items. Most recently, the company associated with the NFT marketplace had its public test launch back in July. On the 31st of October, this year, the NFT marketplace went live on ImmutableX, which is an Ethereum layer-2 blockchain.

Earlier to this, GameStop had also released a beta self-custody crypto wallet as well as a beta NFT marketplace on Loopring. This was back in the months of March and May. The company also tried to attract even more customers. While doing this, it also partnered with the now-bankrupt cryptocurrency exchange FTX back in September. After the exchange had declared bankruptcy back on November 11, the company detached itself from the firm.

As compared to the gaming company’s second quarter (Q2) losses of $108.7 million, the quarter three losses are relatively lower. In addition to this, the company even experienced an increase in the YoY after it reported a $105.4 million loss in the Q3 of 2021.

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