GameStop shares surge on plan to enter NFT market
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GameStop is asking select game developers and publishers to list NFTs on its marketplace when it launches later in 2022.
PHOTO: REUTERS
TOKYO (BLOOMBERG) - It was just a matter of time before the turbocharged worlds of meme-stock and crypto trading collided in a burst of speculative frenzy.
News that GameStop, which became emblematic of 2021’s turbulent year of retail investing, is getting into the business of non-fungible tokens (NFTs) sent the stock soaring 29 per cent in extended trading. The jump followed a sharp retreat since late November.
NFTs emerged as the hottest commodity of the crypto universe last year as prices for some digital artworks spiraled into the millions of dollars and celebrities and athletes flocked to the asset class.
GameStop’s flirtation with crypto follows that of fellow Reddit-crowd darling AMC Entertainment Holdings, which announced in November that it’s contemplating issuing its own cryptocurrency.
Getting into the NFT trade would mark the latest pivot for chairman Ryan Cohen, whose push to reinvent the brick-and-mortar video games seller into a digital-first retailer sparked a fervour for the stock last year, triggering large losses for hedge funds who were short the shares.
GameStop’s NFT strategy involves talks with crypto and blockchain operators about what tokens would be accepted on its marketplace as well as the setup of potential funds, each of up to US$100 million (S$136 million), to invest in NFT content creators and game studios.
The largest market for NFTs, OpenSea, was valued at US$13.3 billion this week in its latest fundraising round. It saw an explosion in sales last year, with monthly volume peaking at US$3.4 billion in August, up from US$96.7 million in February, according to Dune Analytics. The company makes money by taking a 2.5 per cent cut of every transaction.
GameStop already has a stable of millions of loyal gamer fans whom it can direct into its own marketplace.
The stock-boosting power of crypto was on display earlier this week when Square Enix Holdings shares jumped 7.5 per cent after its president’s new-year letter set out plans to develop metaverse, blockchain and NFT-based incentives for players.
That also illustrated the contrast between the market and public reaction as the developer, whose titles include the iconic Final Fantasy franchise, was roundly lambasted by gamers and industry observers for its monetisation efforts.
