Remember the epic short squeeze at the beginning of last year, the leek cuts off Wall Street hedge funds, and the GameStop incident that was even selected by Netflix for the film and television adaptation rights?
On March 18, American game retailer GameStop stated in its fourth quarter earnings report that it plans to launch the NFT market by the end of July. In fact, as early as April last year, GameStop began to recruit employees with blockchain work experience to create a new NFT department and seek to work with cryptocurrency partners to promote the companys entry into the encryption field.
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From the wind vane of the game market to the sunset industry
GameStop, also known as Game Station, is the largest video game retailer in the United States, operating 5,889 chain stores worldwide. In addition to console and computer games, GameStop also sells game magazines, game guides, and entertainment-related DVDs.
GameStop dominated the game retail industry at the time, and as long as a new game was released, there would be a long line at the door of GameStop (no matter how remote). Its sales figures are also seen as a barometer of a games success。
However, even such a company cannot escape the impact of digitalization.
The development of the Internet and e-commerce has made players accustomed to online consumption, and physical sellers have gradually declined amid industry changes. For GameStop, online downloading is the primary problem it faces. Players who have experienced the digital version will be attracted by its speed and convenience. Gradually, the sales of traditional CD-ROM games have declined, and store traffic has been lost. GameStop has also changed from a weathervane of the game industry to a sunset industry, and its sales share has been shrinking.
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The short selling event brought GameStop back to life?
For a company that was once brilliant, these experiences have to be embarrassing. But the wolves of Wall Street smell blood here. Due to GameStops poor management, it is no surprise that it has become the least optimistic stock in the market, and it is only natural to be short.
However, there is a board on Reddit to discuss stocks, called WallStreetBets, which brings together some young people who are extremely enthusiastic about GameStop stock, and occasionally mixed with young people who hate short positions. They kept buying GameStop stock to fight the Air Force, which also snowballed GMEs stock price from less than $3 to $20. In the later stage, the stock price of GME also got on the rocket, triggering circuit breaker suspensions many times.
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GameStop develops NFT market, enters the encryption field
Although this stock market incident has brought GameStop back to the publics vision, it cannot restore its business failure and the verge of bankruptcy. Does the market still hold out hope for its recovery?
GameStop seems determined to make reforms in business, trying to transform from the main physical retail business to game e-commerce, and develop into the NFT market.
As early as January this year, it was reported that GameStop had hired more than 20 people to operate the NFT department. This division is used to buy, sell and trade NFTs of virtual video game merchandise (such as avatar clothing and weapons), cooperates with selected game developers and publishers, and lists NFTs on its marketplace.
Affected by this news, GameStops stock price rose 31% in after-hours trading, reaching a recent high of $170. The performance of the secondary market also reflects the publics support and optimism for GameStops transformation.
Additionally, GameStop has entered into a partnership with Immutable X, an Ethereum L2 solution. The two jointly established an IMX fund pool of up to US$100 million to support developers with NFT plans. The cooperation between the two parties can be said to be complementary. Immutable X can provide blockchain technology support, and GameStop can contribute its reputation and brand accumulated over the years.
Robbie Ferguson, founder of Immutable X, believes: This is a leap forward in the gaming and blockchain industries, further verifying that NFT and blockchain have great utility and are reaching a wider audience.
This series of cooperation of GameStop also verified its determination to enter the NFT market. When Metaverse and NFT become the focus of the game industry, major game companies and brands are also waiting for opportunities.
For GameStop, its own business also naturally fits with the attributes of NFT, and the logic of NFT based on the collection and commemorative value of games is similar. This transformation is also the only way for GameStop to adapt to the development of the digital age.
