The well-known video game store GameStop entered the non-fungible tokens (NFTs) industry in a big way by establishing its own NFT marketplace and announcing ambitious intentions to offer crypto games. GameStop chose to back off as the NFT market lost momentum. It is now preparing to end support for its cryptocurrency wallet.
The corporation gave the standard justification for businesses withdrawing or scrapping plans to use digital assets—”regulatory uncertainty of the crypto space”—as the basis for this decision. GameStop’s announcement about ending wallet support was through a pop-up notification on its NFT marketplace. Support would cease on November 1. To access their funds before the shutdown, users should back up the wallet’s secret password by October 1. The wallet was launched in May 2022.
GameStop’s decision was prompted by recent changes in the cryptocurrency sector. This includes increased enforcement activities by the SEC under Chair Gary Gensler’s leadership. Major exchanges like Coinbase and Binance, as well as smaller businesses and initiatives, have been sued by the SEC.
GameStop Evolving Stance: From NFT Enthusiasm to Pragmatism
The new action by GameStop also comes after Matt Furlong, its former CEO, was fired about two months ago. Furlong served during the establishment of the marketplace, wallet, and collaboration with Immutable X. The partnership included a $100 million incentive fund for network development. Furlong, though, had already made it clear that GameStop was turning away from NFTs and cryptocurrency before he left. He said that GameStop will not put a sizable amount of stockholder capital at risk in the cryptocurrency market in a December 2022 earnings call.
Despite having over 4,400 physical locations worldwide as of January, GameStop faced multiple rounds of layoffs. These were due to the video game industry’s transition to digital delivery. The retailer’s stock price saw substantial swings during the “meme stock” craze in early 2021, which contributed to the company’s erratic behavior.
According to rumors, crypto wallet engineers were among those let go in December 2022. This occurred around the time Furlong announced GameStop’s shift away from the NFT industry.
The circumstance emphasizes the difficulties traditional shops confront as they foray into the quickly developing and frequently ambiguous world of cryptocurrencies and NFTs. The NFT industry attracts interest from various sectors. Regulatory concerns and market shifts prompt businesses like GameStop to reassess their involvement.