On July 11, GameStop — the world’s largest video game retailer — made the headlines again. It announced an NFT marketplace launch aiming to give “power to the players” (in fact, it was launched in March).
The news about the long-anticipated platform came shortly after a four-for-one stock split announcement followed by a 10% shares surge and… CFO change, as well as dismissals across the company.
OneArt is recalling the story of the gaming giant, its short squeeze, and the memmers’ games and tries to grab an idea of what’s coming next.
How it all began
GameStop is a U.S-based retailer with 4,600+ stores across the U.S, Europe, Canada, Australia, and New Zealand. It offers a wide range of products — starting from video games and accessories for consoles, electronics, collectible card games, and Lego sets.
GameStop’s story dates back to 1984 when a Babbage’s retailer was founded. It was selling generic software, then changed its focus to the video games market. Having acquired EB Games in 2005, the company turned into a global gaming market player, entering its palmy days. At its peak in 2015, the retailer had 6,000+ stores generating $9 billion in sales annually.
In 2016, GameStop realized it was lagging behind competitors offering digital games. Next year, the company saw a 16.4% decline in YOY sales. The turf war was lost. In 2019, the company’s shares crashed to a 14-year low.
The pandemic improved the situation: the shares rose 3x in August-December 2020. But the most interesting times were ahead.
To pump or not to pump
Last year, GameStop was involved in a high-profile scandal deemed by experts as a “wild rally fueled by day traders,” “squeeze of a lifetime,” and a pump-and-dump scheme.
Or maybe it was a successful stunt that drove the attention of top traders, experts, media, and celebrities, including Elon Musk?
Anyway, the frenzy made the GameStop shares skyrocket from ≈$4 to $483 per share. Brokerages had to restrict trades. On January 25, they halted trading nine (!) times. The company in decline was seeing banner weeks, with its shares wiping out fortunes from investment funds.
It was a meme stock that really blew up
It was the r/wallstreetbets community on Reddit that played a cruel short squeeze joke on short sellers and made those who bet against GameStop lose $6 billion.
So who’s the Wolf of Wall Street now?
Not all experts consider this frenzy pump-and-dump
Jay Clayton, the ex-SEC chairman, said no such scheme was present, and “people were very transparent about what they were doing and why they were doing it.”
What do we know about the marketplace?
- Users can explore, collect, trade, create NFTs, and view stats.
- There’re 244 collections on the marketplace so far. They’re artworks, gaming tokens will be added later.
- The access is granted via a wallet, including GameStop Wallet (beta).
- To create a token, you have to fill out a form. And who knows whether you “receive an exclusive minting feature.”
- FAQs and tutorials are included.
- GameStop aims to provide “low fees & high speeds.”
- The company has also launched a $100 million IMX Grant Program for creators and developers.
❗️ Currently the market is beta ➡️ disruptions and outages are possible.
Why should we care?
The short squeeze had long-term consequences in terms of capital losses, lawsuits, some regulation changes, and documentaries filmed. We’ll wait and see if GameStop manages to leverage the NFT trend and change the brand perception.
GameStop NFT may become one of the largest gaming NFT marketplaces when it adds Web3 gaming and expands its creators’ base. The company claims Immutable X will provide access to “millions of world-class gaming assets” and offer “gas-free and carbon-neutral minting and trading.” It means GameStop NFT marketplace has a great chance to be added to OneArt app which will allow users access all the most popular NFT marketplaces worldwide.
