GameStop launches digital wallet for cryptocurrency, NFTs

Dive Brief:

• GameStop on Monday announced the beta launch of its digital asset wallet for users to store, send, receive and use non-fungible tokens and cryptocurrency, according to a press release.
• The video game retailer said the wallet will enable transactions with GameStop’s NFT marketplace, which is expected to launch in the second quarter of its fiscal year.
• The GameStop Wallet is a self-custodial Ethereum wallet, meaning users have complete control of assets but can’t recover their accounts if login information is stolen or lost. The wallet is currently accessible through a web browser extension.

Dive Insight:

GameStop is entering a new arena with its digital wallet — one that already has some heavy competition from companies like Robinhood and Coinbase. The GameStop Wallet touts its ability to let users operate without leaving their browser and provides lower transaction fees through Loopring Layer 2, a set of protocols to resolve common congestion issues from the Layer 1 blockchain.

The video game retailer officially joins the blockchain world in the midst of intense volatility and a decline in NFT interest. NFT sales are down by 92% since last September, according to the data website NonFungible. More so, earlier this month, the cryptocurrency market had one of its most volatile trading weeks in the past two years.

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The announcement also follows GameStop’s rough Q4 earnings report in March, as its losses widened despite increased sales. The push into NFTs and crypto comes as no surprise though. Shareholder and Chewy founder Ryan Cohen launched an activist campaign against GameStop in 2020, calling for it to become a digitally driven technology company. 

Since then, Cohen has become the board’s chairman, and several executives have been appointed. Most recently, GameStop COO Jenna Owens left after just seven months on the job. She was replaced by former Belk CEO Nir Patel earlier this month.

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Acting on the digital transformation Owens called for, GameStop in February released its plans to develop an NFT marketplace with technology partner Immutable X. However, the video game company isn’t the first to take a step into the world of blockchain. Home retailer Overstock started accepting crypto in 2014 and invested heavily in a company blockchain unit, which later lost the retailer millions of dollars.

With the crypto market becoming more popular, volatile and prone to large-scale theft, GameStop knows it’s opening up a new world of risks for its fans. The company on Twitter even cautioned users about the irreversibility of transactions and to use the wallet responsibly.

This is a beta launch. Please use responsibly, and do not add more funds than you are comfortable with.

— GameStopNFT (@GameStopNFT) May 23, 2022