GameStop’s NFT marketplace is making just $45,000 on day one after months of hype, retailer may have missed the NFT bandwagon

GameStop’s new NFT Marketplace, which finally launched in beta on June 11 after months of turmoil and hype among some merchants, has netted game distributors about $45,000 in transaction fees in the past 24 hours. While this revenue is a small drop for a company as large as GameStop, it also means that GameStop is now a surprisingly big player in the rapidly shrinking NFT market.

GameStop (EB Games, formerly Babbage’s) is a company specializing in the distribution of video games and electronic equipment. The company’s headquarters are located in Grapevine, Texas. In 2016, the company had 7,117 points of sale around the world. The analysis is based on publicly available data from GameStop’s NFT Marketplace webpage.

To date, this marketplace has been divided into nearly 54,000 different NFTs (many of which are available in multiple limited editions), all of which are part of one of approximately 250 collections. The total combined volume shown for these NFTs, which includes both initial maker sales and subsequent sales by second-hand buyers, was approximately 1,835 ethereum (ETH) (about $1.98 million) on Tuesday afternoon at ETH’s current price. ).

The NFT market is littered with people buying their own NFTs to drive prices up, according to a report by blockchain data firm Chainalysis. Known as “wash trading,” buying and selling securities to deceive the market was once commonplace on Wall Street and has been illegal for nearly a century. But the huge, unregulated NFT market has proved to be a golden opportunity for scammers.

This practice has been termed “wash trading” and has long been considered key to the surge in the NFT market, which reached $44 billion in revenue last year, although it is difficult to prove conclusively. But some examples lurk, according to a report by Chainalysis, a company that monitors blockchain technology, the digital ledgers that serve as the backbone for cryptocurrencies and smart contract assets like NFTs.

GameStop charges a 2.25% market fee on all these trades (which is roughly in line with what is done in competitive markets), which is approximately $44,500 at the current market price. The rest of that sales volume goes to the people selling the NFTs, taking into account crypto network fees and a variable royalty for creators.

Of these 250 collections, the most popular, a set of 10,000 animated GIFs called MetaBoy currently accounts for 25% of GameStop’s NFT transaction volume. The four most popular NFT collections on the service represent just over 52% of all transactions to date. On the other hand, 48 collections representing 317 different NFTs are not yet subject to changes on the GameStop platform. The service’s median roundup has seen about 0.9 ETH ($970) in trading volume so far.

A drop of water in the ocean

For starters, $45,000 in daily transaction fees will have virtually no impact on the bottom line for GameStop, which has net income of more than $6 billion (equivalent to $16.5 million per day) for its last full fiscal year. In other words, if GameStop’s NFT transaction fee revenue remains constant at current levels for an entire year, it will represent only 0.27% of the company’s revenue for fiscal 2021.

GameStop’s NFT transaction costs also pale in comparison to the $1.271 billion in cash the company had at the end of 2021. , in June.

On the other hand, GameStop’s NFT marketplace is significantly different from most of the company’s operations. GameStop’s thousands of stores require spending on physical inventory, shipping and storage costs, store staff salaries, or physical store maintenance. These expenses are largely responsible for GameStop’s $381 million loss in its last fiscal year, despite all revenue.

By contrast, GameStop’s custodial NFT blockchain running on Loopring, a layer 2 solution that itself runs on top of ethereum, incurs none of these ongoing costs. And while GameStop has reportedly invested tens of millions of dollars in launching its NFT Marketplace, the transaction costs it gains from that effort likely comes with little overhead.

A big fish in a pond rtrci

Of course, GameStop’s current daily revenue from NFT trades is just a starting point and could rise or fall significantly as the new market matures. However, recent trends in the NFT market are not encouraging in this regard.

For example, OpenSea, the largest NFT marketplace, posted trading volume of $141.86 million on Jan. 5, the day before the Wall Street Journal reported on GameStop’s NFT plans. In the past 24 hours, OpenSea saw just $15.55 million in trading volume, down nearly 90% in just over six months.

If GameStop had launched its marketplace in January and reached the same relative OpenSea size as it is today, the company would earn more than $400,000 in daily transaction fees on a total transaction volume of more than $18 million. However, GameStop’s NFT marketplace, which launches a few months later, is in the odd position of being a relatively large player in a rapidly shrinking market.

With a trading volume of $2 million on launch day, GameStop’s marketplace is nearly as big as Magic Eden, the second largest NFT marketplace followed by Dappradar. This also means that GameStop’s NFT marketplace is currently more than 11 times the size of Axie Infinity, which was once considered the prime example of a successful NFT game to earn (GameStop’s Marketplace does not currently support web3 gaming resources, which will will be added over time).

Going from a startup to $2 million in NFT transactions on launch day could be a sign of what GameStop called our [lien] special with players [qui] presented us with a unique opportunity in the world of web3 and digital assets during a profit call in March. And who knows, maybe the NFT market will turn around and GameStop will become the ultimate destination in the new gaming paradigm, as Immutable’s Robbie Ferguson suggested when he announced a deal with GameStop in February.

In an interview with Bloomberg TV last week, Coinbase co-founder Fred Ehrsam said 90% of NFTs are likely to have little or no value in three to five years. As the NFT market has stalled for the past month, Ehrsam has drawn parallels between the rise of cryptocurrencies and the dotcom boom of the 1990s.

NFTs (non-fungible tokens) are cryptographic assets based on the blockchain. They are in fact tokens with unique identifiers and metadata that distinguish them from one another. Unlike cryptocurrencies, they cannot be traded or exchanged against the equivalent. This is why they are non-fungible. This is different from fungible tokens such as cryptocurrencies, which are identical to each other and therefore can be used as a medium for commercial transactions.

It’s hard not to think that GameStop has largely missed NFT’s gold rush, which has soured in recent months and is gearing up for this week’s launch. Six months later, it seems that the NFT space is already past its infancy and is in definite decline. GameStop’s NFT marketplace is a relatively big fish in this increasingly murky tide, one that seems far too small to have any impact on the company’s current problems (including another wave of layoffs this week).

Source: GameStop

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Also see:

China will create its own NFT industry based on state-backed blockchain infrastructure, according to Red Date Technology, the project’s lead developer

Are NFTs (non-fungible tokens) a scam? Yes, according to Stephen Diehl, a software engineer

Small group of insiders profit most from NFTs, study finds

NFT tokens from various celebrities have lost a lot of value in recent weeks, causing buyers losses

About 90% of NFTs will be worthless in 3-5 years, Coinbase co-founder Fred Ehrsam warns

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