According to people familiar with the firm’s intentions, GameStop Corp. (GME 1.28%) is forming a subsidiary to develop a marketplace for nonfungible currencies and form cryptocurrency partnerships, pushing the company into much-hyped sectors as it works to turn around its core video game business.
As said, the shop has employed around 20 people to oversee the operation, which is developing an online hub for buying, selling, and exchanging NFTs of virtual videogame products including avatar clothing and weaponry. According to the people, the company is inviting a few game developers and publishers to put NFTs on its marketplace when it comes later this year.
GameStop is also close to signing deals with two crypto startups to exchange technology and co-invest in the creation of blockchain and NFT-based games, as well as other NFT-related initiatives. The store plans to get into similar deals with a dozen or more crypto startups this year and invest tens of millions of dollars in them.
GameStop, situated in Grapevine, Texas, has been striving to restructure its business following years of losses. Last year, the company was at the focus of a stock-trading frenzy that raised its share price, riding a wave of enthusiasm and optimism from individual investors.
On an earnings call with analysts this month, GameStop Chief Executive Matt Furlong remarked, “We believe our focus on the long term is placing us to grow what will ultimately become a much larger organization.” Mr. Furlong, who joined GameStop from Amazon.com Inc. last year, then said that the company was looking into blockchain and NFT technology for commercial prospects.
Some investors have shown symptoms of losing patience. GameStop shares have dropped more than 45 percent in the last six weeks as of Thursday’s closing, albeit the stock is still much above where it was when investors began rushing into the stock a year ago. Following the news published in The Wall Street Journal, the stock jumped more than 20% in after-hours trading.
According to researchers, the gaming industry is anticipated to play a significant role in the adoption of bitcoin, NFTs, and blockchain technology. Because they currently spend a lot of money on virtual products, gamers are likely to be the first to adopt the technology. A fast-developing part of the NFT business is virtual real estate in video games, as well as video game collectibles.
Some of the industry’s largest publicly traded video game businesses, including Ubisoft Entertainment, Zynga Inc., and Square Enix Holdings Co., have started or announced plans to sell NFTs in recent weeks. However, some industry leaders and players have expressed reservations about the worth of NFTs and the motivations of their developers.
GameStop intends to avoid missing out on possibilities to be part of a burgeoning trend by entering the crypto and NFT space when it is still in its infancy, as it did with computer game downloads roughly a decade ago, according to sources familiar with its plans. At the time, GameStop attempted but failed to enter the videogame streaming market. Downloading and streaming games are becoming increasingly popular in today’s world.