GameStop’s NFT Marketplace Makes Just $45,000 On Day One After months of hype, retailer may have missed the NFT cart

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 over the past 24 hours. While this revenue represents a small bucket drop for a company the size of GameStop, it also means that GameStop is now a surprisingly large player in the rapidly shrinking NFT market.

GameStop (EB Games, formerly Babbage) is a video game and electronic equipment distributor. The company is headquartered in Grapevine, Texas. In 2016, the company had 7,117 points of sale spread all over the world. Analysis is based on publicly available data from GameStop’s NFT Marketplace webpage.

To date, this market has been categorized into approximately 54,000 NFTs (many of which are available in multiple limited editions) and they are all part of a group of about 250 combinations. The combined aggregate volume shown for NFTs, which includes initial sales by the originator and subsequent sales by second-hand buyers, was approximately 1,835 ethereum (ETH) as of Tuesday afternoon (approximately $1.98 million). at the current price of ETH).

The NFT market is full of people buying their NFTs in order to drive up prices, according to a report by blockchain data firm Chainalysis. The process of buying and selling securities in order to fool the market, known as the “washing trade,” was common on Wall Street, and was illegal for nearly a century. But the vast, unregulated NFT market has proven to be a golden opportunity for fraudsters.

Dubbed “washing trade”, the practice has long been key to the boom in the NFT market, which had $44 billion in revenue last year, although it’s difficult to prove in a definitive way. But some examples lie in plain sight, according to a report by Chainalysis, a company that monitors blockchain technology, the digital ledgers that serve as the backbone of cryptocurrencies and smart contract assets like NFTs.

GameStop charges a market fee of 2.25% on all such transactions (roughly in line with what is done in competing markets), which is about $44,500 at the current market price. The rest of the sales go to people selling NFTs, after taking into account crypto network fees and a variable royalty to creators.

Of these 250 groups, the most popular is a group of 10,000 animated GIFs called MetaBoy that currently accounts for 25% of GameStop’s NFT transaction volume. The four most popular NFT suites on the service account for just over 52% of all trades to date. On the other hand, 48 groups representing 317 different NFTs have not yet undergone any changes on the GameStop platform. The average collection on the service has seen around 0.9 ETH ($970) in trading volume so far.

A drop of water in the ocean

For one thing, the $45,000 daily transaction fee will have virtually no effect on GameStop’s bottom line, which has net revenue of more than $6 billion ($16.5 million per day) over its most recent full fiscal year. In other words: If GameStop’s NFT transaction fee revenue remains constant at its current level for a full year, it will represent only 0.27% of the company’s revenue for fiscal year 2021.

GameStop’s NFT transaction fee also pales 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 market is markedly different from most of the company’s business. Thousands of GameStop retail stores require spending on physical inventory, shipping and warehousing costs, retail employee salaries, or physical store maintenance. Those costs are largely responsible for GameStop’s $381 million loss in its last fiscal year, despite all of its revenue.

In contrast, GameStop’s custodial NFT blockchain running on Loopring, a layer 2 solution that runs itself on top of Ethereum, doesn’t come with any of these ongoing costs. And while GameStop has invested tens of millions of dollars to launch the NFT Marketplace, the transaction fee revenue it generates from this effort will likely come with very little overhead.

big fish in pond rtrci

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

OpenSea, for example, the largest market for NFT, recorded a trading volume of $141.86 million on January 5, the day before the Wall Street Journal reported on GameStop’s NFT plans. In the past 24 hours, OpenSea has seen only $15.55 million in trading volume, down nearly 90% in just over six months.

If GameStop launched its market in January and reached the same relative OpenSea volume as it does today, the company would earn more than $400,000 in daily transaction fees on a total transaction volume of more than $18 million. Launching a few months later, GameStop’s NFT market finds itself in the strange position of being a relatively large player in a rapidly shrinking market.

With a trading volume of $2 million on launch day, the GameStop market is roughly the size of Magic Eden, the second largest NFT market followed by Dappradar. This also means that GameStop’s NFT market is currently over 11 times larger than Axie Infinity, which was once considered the first example of a successful playable NFT game (GameStop’s Marketplace does not currently support web3 game assets, which will have been added over time) .

Going from a startup to $2 million in NFT transactions on launch day could be a sign of what’s called GameStop [lien] private with players [qui] He presented us with a unique opportunity in the world of web3 and digital assets during an earnings call in March. And who knows, maybe the NFT market will shift and GameStop will emerge as the ultimate destination in the new gaming paradigm, Immutable’s Robbie Ferguson suggested when announcing an agreement with GameStop in February.

In an interview with Bloomberg TV last week, Coinbase co-founder Fred Ehrsam said that 90% of NFTs are likely to have little or no value within three to five years. With the NFT market on hold over the past month, Ehrsam drew parallels between the rise of cryptocurrencies and the internet boom of the 1990s.

NFTs (non-fungible tokens) are crypto assets based on the blockchain. They are actually codes with unique metadata and metadata that allow them to be distinguished from one another. Unlike cryptocurrencies, they cannot be traded or exchanged for their equivalent. This is why it is not replaceable. This differs from exchangeable tokens such as cryptocurrencies, which are identical to each other and thus can be used as a medium for commercial transactions.

It’s hard not to think that GameStop has largely missed the NFT gold rush, which has been bad for the past few months in preparation for this week’s launch. GameStop’s NFT Marketplace is a relatively big fish in this increasingly bad tide, and appears too small to have any bearing on the company’s current struggles (including another wave of layoffs this week). finally).

Source: GameStop

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See also:

China will build its own NFT industry on the basis of state-backed blockchain infrastructure, according to Red Date Technology, the lead developer of the project.

Are NFTs (Non-fungible Tokens) a Scam? Yes, according to Stephen Dell, a software engineer

A study finds that a small group of insiders reap the most gains from NFT technologies

The NFT tokens of many celebrities have lost their value significantly in recent weeks, causing losses to buyers

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

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