GameStop’s NFT marketplace will launch soon according to Robbie Ferguson, co-founder of Immutable X, the company that will be responsible for the platform's technology.
After conversations with several members of GameStop’s (GME) C-suite, including Chairman Ryan Cohen, blockchain game development company Immutable X promises that great things are to come for GameStop. The brick-and-mortar company is looking for ways to diversify its business model and drive new growth.
And since we can’t really talk about GameStop without mentioning its ultra meme-y stock, we note that advances related to the company's immersion into the world of NFTs may be super bullish for investors. Here's why recent developments could be a great opportunity for GameStop, and its stock, in the near future.
GameStop is on track to be a major NFT player
In partnership with Immutable X, GameStop will soon launch its NFT marketplace. There, users will be able to trade in-game assets - such as items from Fortnite, the popular Battle Royale video game - via blockchain tokens on the Ethereum platform.
GameStop’s platform will not charge any transaction fees and will (supposedly) be completely carbon neutral. It’s also expected to be an intuitive, easy-to-use platform - GameStop wants to be able to market it to as many potential users as possible.
All the platform’s backend work - including the management of all trades - will be done by Immutable X.
Immutable X and GameStop will also launch a $100 million joint fund for Gaming NFTs. That fund will help developers build on the platform and distribute their in-game items starting from day one.
The size of the opportunity
GameStop's business had been degrading over the past several years as brick-and-mortar retail gaming stores have lost ground to e-commerce giants and digital game streaming platforms.
Even with new management at GameStop focused on digitizing its business to keep up with current market trends, the company’s decision to immerse itself in the crypto and NFT market seems like a great, forward-looking move.
The addressable markets are massive. In 2021 alone, the NFT market generated more than $41 billion. And consumer spending on in-game purchases is expected to exceed $74.4 billion by 2025.
With GameStop being a potential beneficiary of both these markets, the company has the opportunity to add sizable new revenue streams to its business. For that to work out, though, GameStop’s new platform will have live up to its user-friendly promises and allow for the seamless integration of new games into its ecosystem.
It’s also important to remember that the NFT marketplace is still in its early days. OpenSea dominates with a more than 90%market share. And some new entrants, such as eBay and Coinbase, may become important competitors in the future.
What a successful NFT marketplace would mean for GME stock
If GameStop's NFT marketplace is indeed successful, it could be a game-changer for the company's business model in the long term.
Wall Street's skepticism regarding GameStop’s future growth may diminish if a clear path to profitability is laid out, and sentiment from loyal retail shareholders should strengthen even more. Taken together, those two developments could prove to be very bullish for GME’s stock.