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In the pre-covid era, the gaming giant GameStop experienced a slow decline in its sales, surpassed by the online market and the success of streaming gaming platforms.
Luck would have it that a group of willing to do anything traders brought this company back into fashion via a popular group on Reddit. Many have seen a parallel between the retail investing community that boosted GameStop’s share price and that which invests in cryptocurrencies.
Today, the paths of the crypto world and GameStop officially begin to intersect. The company, looking for new ideas for the future, has just announced the opening of a new NFT section.
This article will analyze the announcement, offering some reflections on the topic in view of the future of GameStop and the sector.
Looking for a new business plan
The enormous influence that a group of small investors has had on the future of GameStop (GME) is truly impressive. Intelligently, the WallStreetBets group managed to raise the company’s share price to trigger panic among large investors, who were short-selling the stocks.
This move led short sellers to immediately cover their losses by opening long positions on the market. This particular mechanism took GME’s price to incredible levels, going from under $20 to a high of $325 in January 2021.
Although GME’s share price has now stabilized at a lower level, it has not returned to the threshold observed before the pandemic to date. This situation is giving new confidence to the management and shareholders of the company.
In the meantime, however, GameStop’s financial situation hasn’t improved. While the company’s revenues have actually grown, the same is also true for the balance sheet losses.
The NFT decision
The new year began with the announcement that GameStop will try to be reborn from its ashes by exploiting the potential of blockchain technology. The company has declared that it has opened a new section within its staff, exclusively dedicated to non-fungible tokens (NFTs).
If you have been following the big news in the blockchain world last year, you will surely know how NFTs are gaining very high popularity. Among the numerous applications of this new technology, the worlds of art and gaming have made the most of NFTs.
Although GameStop has made no further statements, this decision, coupled with the company’s traditional business model, has generated significant interest in the financial markets. GameStop now owns the nft.gamestop.com domain, which only consists of a landing page for the time being.
In the future, new video game producers will be able to decide to sell their in-game digital assets through an extremely wide range of NFT marketplaces. Given GameStop’s long experience in the sector, the fact that the company decided to enter the market in this way is not surprising.
NFTs, gaming and the Metaverse
While gamers all over the world are divided between those who view NFTs with enthusiasm and those who judge them with distrust, the choice of GameStop is undoubtedly fascinating.
In 2021 we witnessed the enormous growth of the NFTs business, increasingly combined with the idea of the Metaverse. What some developers foresee, in summary, is that in the future, many economic activities will take place in virtual reality, hence the need to use tools such as NFTs.
An increasingly digital economy requires tools that can guarantee the copyright of virtual assets. This is why NFTs are having great success in digital art, and game developers are tempted to increase their income thanks to this trick.
Making every in-game asset tradable in the form of an NFT creates a secondary market within the game’s virtual reality. The Metaverse is a concept already known in the gaming universe, but no one had ever tried to create such a strong bond with the real world before the birth of blockchain technology.
What else do we know about this strategical shift?
Following the significant surge of interest in the financial markets for its shares, GameStop is trying to build its own success from its community. The company’s NFT portal shows the message “Request to be a creator on the GameStop NFT Marketplace”.
Anyone interested can fill out an online form to send their application and join the team of developers of the project. This preliminary procedure asks the interested parties six questions, and then the actual selection process will begin.
Furthermore, many rumors on the market speak of how GME management would currently be looking for partnerships with important crypto companies. This move could suggest the birth of the marketplace by the end of the year, with the announcement of partnerships in the industry.
GameStop, cryptos, and NFTs: where do we go from here?
Experts are divided between those who see GameStop’s move as a brilliant idea or, simply, a desperate attempt to avoid failure. Only time will tell which of the two factions is right. However, the entry of an internationally renowned player into the NFTs market has three direct consequences:
- The level of experience in the NFTs sector will increase, given the fact that GameStop has been operating since 1984
- Regardless of the success or failure of the initiative, the topic of NFTs will see its popularity grow further also in 2022
- The world of cryptocurrencies, together with that of NFTs, could see significant growth in the future. The market already expects a substantial increase in active users on Ethereum following the announcement of GameStop.
We will closely monitor the developments of this story and provide readers with the most important updates on the matter.