Brick-and-mortar gaming retailer GameStop is collaborating with crypto exchange platform FTX in hopes of doubling down on its Web3 strategy amid reports of income losses.
According to a statement released by the company, the partnership’s goal is to funnel the company’s growing Web3-savvy customer base toward FTX’s suite of Web3 services. What is worth noting is that FTX has its own NFT marketplace.
Incidentally, this new partnership with FTX comes on the heels of another disappointing quarter for the brick-and-mortar gaming retailer. GameStop recently announced a net loss of $108.7 million. The loss followed its revenue decline from $1.8 billion to $1.4 billion in the same quarter a year ago.
“The deal we just announced with FTX is a by-product of our commerce and blockchain team, working hand-in-hand together to establish something unique in the retail world,” said GameStop’s chief executive officer Matt Furlong when asked to comment on the partnership.
Purpose of GameStop and FTX’s Collaboration
GameStop and FTX are looking to capitalize on the former’s exposure to mainstream gaming to onboard masses to Web3, touted to be the Internet’s next iteration. That’s because Web3 is way more tech-centric, leveraging more modern technologies like blockchain technology, augmented reality, artificial intelligence, virtual reality, and decentralized apps to support immersive interactions in 3D virtual spaces.
A press release announcing the collaboration stated that it intends to “introduce more GameStop customers to the crypto exchange’s community and its marketplaces for digital assets.” Nevertheless, additional details, including the partnership’s financial terms, have not been disclosed.
Per GameStop’s announcement, the company will introduce its customers to FTX’s product line—NFT marketplaces, a crypto exchange platform, and the newly-launched stock trading platform, among others. The agreement might also see GameStop carrying FTX gift cards in some of its physical stores.
GameStop in the Web3 Space
As mentioned at the outset, GameStop launched an NFT marketplace in July amid the crypto winter. The gaming retailer teamed up with Immutable X, a Layer 2 Ethereum scaling protocol. The marketplace has since grown to outdo Coinbase NFT in terms of transaction volume.
In fact, GameStop’s NFT marketplace raked more than $7 million in its first few days of operation. As of this time of writing, the revenue has ballooned to over $20 million. Nevertheless, the marketplace’s sales have seen a slump, including a 24-hour period only recently where it accrued a mere $4,000 in sales volume.
“The launch of our NFT marketplace supports GameStop’s long-term growth in the cryptocurrency, NFT, and Web3 gaming verticals, all of which we expect to be increasingly relevant for the collectors and gamers of the future,” Furlong said.
However, when GameStop submitted its Q2 2022 earnings report this week, it noted that revenues from the marketplace might not have a bearing on the report.
“Revenues earned from our digital asset wallet and NFT marketplace were not material to the condensed consolidated financial statements for the three and six months ended July 30, 2022,” its quarterly SEC filing stated.
After GameStop launched its marketplace, it said that one of the reasons for it was because the company expects Web3 to play a critical role in its next growth phase. Hence, the company invested heavily in Web3 initiatives.
Still, given the recent market downturn, it remains to be seen whether GameStop’s investments would pay off, with the company generating close to $443,400 in fees from the platform, surpassing 500 live collections.
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