But can it really modernize the video game retailer?
If you’re the type of investor that still believes fervently in NFTs despite all signs pointing to waning interest, you’ll be very happy to learn that GameStop (GME) – Get GameStop Corp. Class A Report has a lot in store for you this year.
In its first quarter earnings call on June 1, GameStop’s solution to its losses is one many other businesses are betting on too: shoveling its bets into the blockchain market.
While GameStop is recovering from its pandemic losses, it’s in a position where it will be forced to adapt to an increasing demand for digital products before it follows down the path Blockbuster walked in 2014 — except for that one lone outlier in Bend, Oregon, of course.
So it makes sense that its vision for that is to focus on what’s been hot as of late: crypto and NFTs.
But GameStop’s primary market — people who play video games — seem mostly cold when it comes to NFTs, a concept that is nothing new to folks who have been purchasing digital items in games for decades already.
So if it’s not for gamers, one must wonder what kind of consumer GameStop is trying to attract with this move.
Why Is GameStop Betting Big on Crypto?
While a lot of average humans still turn up their noses at the mention of crypto, analysts continue to predict that the digital currency will become increasingly more valuable with time.
Predicted to hit $4.94 billion by 2030 according to a recent study from Allied Market Research, the glow of possibility is hard to resist.
It seems like the lifeboat for many a floundering business, especially for an older retailer struggling to adapt to a major shift in consumer preference.
But crypto and NFTs aren’t just a snake oil solution only those in dire straits are considering.
Huge businesses have chosen to invest in it too, most famously Facebook (MVRS) – Get Meta Report, which swears it will continue to pour money into its metaverse division despite the massive financial losses it reported earlier in 2022.
Moves like this have a big impact on how other businesses choose their growth strategies, even if public trust in Meta’s products has supposedly been waning, a statistic sometimes cited anecdotally, but with which the user numbers do not agree.
And despite the fact that crypto has also has a rough go of it lately, seeing one of the biggest brands in the world invest in it, along with NFTs, sends the message that crypto really is the next big thing.
While GameStop got a nice boost in public interest after the great meme stock explosion of 2021, the share prices have slowly declined with time.
That’s left the 38-year-old retailer with the conundrum of how to quickly transform its long-established identity as a brick-and mortar business.
Its biggest move so far in this direction has been the launch of its ethereum wallet.
Called the GameStop wallet, the app can be used as a Chrome plug-in and has been downloaded more than 40,000 times as of the time of this writing.
But the success of this strategy is precariously balanced on the promises that this digital-centric future is, as Mark Zuckerberg has called it, “the foundation for the next era of social technology.”
So GameStop has placed its bet, and now it must wait and see.