A web platform for non-fungible tokens (NFTs) is going to be launched by GameStop by the end of the second quarter of 2022. In Q4 2021, GameStop (GME), one of the world’s largest retail video game stores, suffered a net loss of $147.5 million as the company anticipated its long-awaited NFT marketplace.
As part of its 10-K disclosure filing as part of ‘new growth opportunities,’ the firm announced its plans in its Q4 2021 earnings call today.
“As we scale and expand our core offerings we will simultaneously invest in additional growth, including blockchain, digital assets (including non-fungible tokens (“NFTs”)), Web 3.0 technology, and new destination formats for our stores,” said the filing.
Despite quietly launching an NFT website in mid-2021, GameStop has significantly increased its efforts this year after announcing the creation of a web3 and NFT gaming division in January and securing a partnership with Ethereum (ETH) scaling solution Immutable X for the creation of a NFT marketplace in February.
Digital World’s plan is to give game developers from the NFT platform up to $100 million in IMX tokens and up to $150 million to Gamestop itself once a set of milestones is reached, as per the terms of the deal.
The Immutable X network uses StarkWare’s ZK-rollup technology to create an Ethereum Layer 2 network for NFTs, which is supposed to be scalable and cheaper than other mining technologies.
GameStop has announced that it plans to launch its NFT marketplace by the end of Q2 2022, in its Q4 results ending on January 29 and published on March 17.
$GME will reportedly open their NFT marketplace at the end of their second quarter 2022.
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In addition, GameStop’s net loss of $147.5 million is 83% worse than it was a year earlier and its loss of $1.94 per share is far below Wall Street’s expectation of $0.84.
The publication of GameStop’s Q4 financial results has significantly impacted the price of GME, with the stock dropping 7.31% to $81.29 at the time of writing. This year, despite positive developments in its Web3 initiatives, GME’s stock price has been on a downward trend with the price dropping more than 40% since the beginning of the year.
Taking a closer look at the report, GameStop posted sales of $2.254 billion per quarter in Q3 2016, which represents a slight increase from $2.122 billion per quarter a year earlier. A major factor that impacted the latest figures was the $1.87 billion cost of sales, while the $538.9 million in selling, general, and administrative expenses curtailed the growth.
It was noted that this raised more than $1.67 billion in additional capital, which was enough to be able to eliminate “the entire Company’s long-term debt, other than a $44.6 million low-interest, unsecured term loan associated with the French government’s response to COVID-19”.
As the NFT market has remained bearish in recent months, GameStop’s partner, Immutable X, has flourished. On March 8, the firm announced a $200 million round of funding at a $2 billion valuation, sending IMX’s price up roughly 50% within 24 hours to around $1.78. The price has since retraced to around $1.54.
