GameStop Entering NFT and Cryptocurrency Markets as Part of Turnaround Plan

GameStop is also near signing partnerships with two crypto firms to share know-how and co-invest within the improvement of video games that use blockchain and NFT know-how, in addition to different NFT-related initiatives, the folks mentioned. The retailer expects to enter into related agreements with a dozen or extra crypto firms and make investments tens of tens of millions of {dollars} in them this 12 months, the folks mentioned.

Grapevine, Texas-based GameStop has been working to reset its enterprise after years of losses. The corporate was on the heart of a stock-trading frenzy final 12 months that boosted its share worth, which rode a surge in curiosity and optimism from particular person traders.

Many noticed potential in GameStop regardless of the pandemic’s detrimental influence on foot visitors and regardless that shoppers have been more and more opting to obtain and stream video games over the web, relatively than purchase the type of arduous copies that the corporate focuses on promoting.

Final 12 months, GameStop overhauled its govt staff and board of administrators, naming activist investor

Ryan Cohen

as chairman. Mr. Cohen, who co-founded on-line pet-products retailer

Chewy Inc.

and sold it for $3.35 billion in 2017, has been pushing to make GameStop extra tech-centric.

The turnaround effort has but to point out important ends in GameStop’s monetary efficiency. Within the quarter by October, the corporate mentioned revenues grew, however its loss widened in contrast with the identical interval a 12 months earlier. The income progress got here from gross sales of {hardware} and equipment, whereas income from recreation software program slipped 2%.

“We imagine our emphasis on the long run is positioning us to construct what’s going to finally turn into a a lot bigger enterprise,” GameStop Chief Govt

Matt Furlong

mentioned on an earnings name with analysts final month. Mr. Furlong, who joined the corporate final 12 months from

Amazon.com Inc.,

then talked about that GameStop was exploring enterprise alternatives involving blockchain and NFT applied sciences.

There have been indicators some traders are dropping persistence. By way of Thursday’s shut, GameStop shares had plunged by greater than 45% over the previous six weeks, although the inventory stays far above the place it was when traders began piling into GameStop shares a 12 months in the past. The inventory surged greater than 20% in after-hours buying and selling following The Wall Road Journal’s publication of the information.

Diving into the crypto and NFT house places GameStop on a quickly rising checklist of firms attempting to money in on these nascent and largely unproven applied sciences. A handful of NFT marketplaces exist already and a few characteristic tokens from recreation publishers. Earlier this week, a market referred to as OpenSea mentioned it raised $300 million in enterprise capital and is now valued at $13.3 billion, larger than GameStop’s valuation of near $10 billion.

The videogame business is prone to play a serious position within the adoption of cryptocurrency, NFTs and blockchain know-how, analysts say. Avid gamers are anticipated to be among the many first to embrace the applied sciences as a result of they’re already spending a lot on virtual goods. Digital actual property in videogames, in addition to videogame collectibles, are a quickly rising section of the NFT market.

In latest weeks, a number of the business’s greatest publicly traded videogame firms have launched or introduced plans to promote NFTs, together with

Ubisoft Entertainment,

Zynga Inc.

and

Square Enix Holdings Co.

Some business executives and gamers, although, have expressed considerations concerning the worth of NFTs and builders’ motives for creating them.

By stepping into the crypto and NFT house whereas it’s nonetheless in its infancy, GameStop hopes to keep away from lacking out on alternatives to be a part of a budding pattern because it did with computer-game downloads a few decade in the past, the folks aware of its plans mentioned. GameStop tried to get into the streaming of videogames on the time however deserted the trouble. At this time, the downloading and streaming of video games are quickly rising developments.

Write to Sarah E. Needleman at sarah.needleman@wsj.com