GameStop’s NFT Marketplace Earns Only $ 45,000 in Day One After months of hype, the dealer 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 given game distributors around $ 45,000 in transaction fees over the past 24 hours. While this revenue is a small drop in the bucket for a GameStop-sized company, it also means that GameStop is now a surprisingly large 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 sales outlets worldwide. The analysis is based on publicly available data from the GameStops NFT Marketplace website.

So far, this marketplace is categorized into nearly 54,000 different NFTs (many of which are available in several limited editions), all of which are part of one of approximately 250 collections. The total volume shown for these NFTs, which includes both original sales from the creator and subsequent sales from used buyers, was around 1,835 ethereum (ETH) on Tuesday afternoon (around $ 1.98 million) at the current price of ETH.

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

Called “laundry trade”, this practice has long been considered the key to the rise of the NFT market, which reached $ 44 billion in revenue last year, although it is difficult to prove it in a definitive way. But some examples in general lurk, according to a report from Chainalysis, a company that monitors blockchain technology, the digital ledgers that act as the backbone of cryptocurrencies, and smart contract assets such as NFTs.

GameStop charges a market fee of 2.25% on all these transactions (which is roughly in line with what is done in competing markets), which is around $ 44,500 at the current market price. The rest of the sales volume goes to people who sell the NFTs after taking into account krypton 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 account for 25% of GameStop’s NFT transaction volume. The four most popular NFT collections on the service account for just over 52% of all trades so far. On the other hand, 48 collections representing 317 different NFTs have not yet been the subject of any changes to the GameStop platform. The median collection on the service has so far seen around 0.9 ETH ($ 970) in trading volume.

A drop of water in the sea

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

GameStop’s NFT transaction fees 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 markedly different from most of the company’s business. GameStops’ thousands of retail stores require physical inventory costs, shipping and storage costs, retail salaries, or physical store maintenance. These costs are largely responsible for GameStop’s loss of $ 381 million in its last fiscal year, despite all of its revenue.

In contrast, GameStop’s repository-based NFT blockchain running on Loopring, a layer 2 solution that runs on top of ethereum, comes with none of these running costs. And while GameStop has reportedly invested tens of thousands of millions of dollars to launch its NFT Marketplace, the revenue from the transaction fee from this effort is likely to come with a bit of overhead.

A big fish in a pond rtrci

GameStop’s current daily revenue from NFT transactions is, of course, only a starting point and may increase or decrease significantly as the new marketplace matures. However, the recent trends in the NFT market are not encouraging in this regard.

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

If GameStop had launched its marketplace in January and reached the same relative OpenSea size as it does today, the company would earn over $ 400,000 in daily transaction fees on a total transaction volume of over $ 18 million. However, with the launch a few months later, GameStop’s NFT marketplace 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, GameStop’s marketplace is almost as large as Magic Eden, the second largest NFT marketplace, followed by Dappradar. This also means that GameStops NFT Marketplace is currently more than 11 times larger than Axie Infinity, once considered the leading example of a successful play-to-earn NFT game (GameStops Marketplace does not currently support web3 game assets, which 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] especially with players [qui] offered us 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 turn around and GameStop will emerge as the ultimate destination in the new gaming paradigm proposed by Immutables Robbie Ferguson 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 stalled over the past month, Ehrsam has drawn parallels between the advent of cryptocurrencies and the dotcom boom of the 1990s.

NFTs (non-fungible tokens) are cryptographic assets based on blockchain. They are actually tokens with unique identification codes and metadata that make it possible to distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged for equivalent. This is why they are said to be non-fungible. This differs from fungible tokens as cryptocurrencies that are identical to each other and therefore can be used as a medium for commercial transactions.

It’s hard not to believe that GameStop has largely missed out on NFT’s gold rush, which has gone sour in the last few months in preparation for this week’s launch. Six months later, it appears that the NFT space has already passed its infancy and is stuck in its final decline. GameStop’s NFT Marketplace is a relatively large fish in this increasingly disgusting tide, one that seems far too small to have any impact on the company’s current battles (including yet another wave of layoffs this week).

Source: GameStop

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Also see:

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

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

A small group of insiders reap most of the gains from NFTs, study finds

NFT tokens from several celebrities have lost their value enormously in recent weeks, leaving buyers at a loss

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

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