Analysis: GameStop’s NFT trading is slower in the first week of the market

Enlarge / If GameStop’s NFT business is going to go “over the moon”, the total trading volume on the platform has bent in the wrong direction so far …

Last week, when Ars analyzed the first day of NFT sales on GameStop’s highly publicized crypto market, some boosters were quick to suggest that this was only a starting point, and that interest and trading volume could increase over time, and as more and more more people are discovering trading platform. In the first week of the market, however, interest in trading GameStop NFTs appears to be declining compared to this launch day’s performance.

An Ars-exclusive analysis of the GameStop NFT marketplace now shows that it was responsible for around 5,254 ETH in total trading volume in its first week (worth around $ 7.8 million at exchange rates). current exchange rates). This represents a daily average of around 750 ETH ($ 1,117 million) in total trading volume. GameStop charges a fee of 2.25% for all such transactions, representing a daily average of 16.9 ETH ($ 25,113) in direct revenue for the company. In total, six of the more than 300 collections on the platform are responsible for the majority of this trading volume.

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(Note: Still volatile ETH prices have increased by ~ 38% since last Tuesday, when Ars conducted its market analysis on launch day. Unless otherwise stated, we use the current ETH spot price – $ 1,488.06 at the time of writing – for conversions here, however, transactions earlier in the week were likely to occur at lower USD / ETH rates.)

The average daily trading volume in the first week is a significant slowdown from the market’s launch day, when it traded 1,831.81 ETH in total trading volume (worth about $ 1.976 million at the time or $ 2.725 million at current rates), according to Ars’ analysis. . On the first day, GameStop earned about 41.2 ETH in transaction fees (worth about $ 44,500 then or $ 61,331 today).

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Enlarge / “GameStop Astronaut MetaBoy” NFT has been one of the most popular on the market recently, bringing over 163 ETH in total trading volume in less than a week.

Of the hundreds of NFT collections that experienced some trading activity on the first trading day, the median collection experienced an average daily volume drop of about 50% in the first trading week (compared to the daily volume) of the launch. This does not include 34 collections that have not yet seen a single trade on the market, 25 of which have been available since day one.

And the dozens of new NFT collections on the market (i.e. those who saw their first trades after market launch day) do not bridge this gap. These approximately 85 collections are only responsible for 556 ETH of the total trading volume over the last six days (approximately $ 828,575).

The wrong direction

No matter how you split it, overall activity on the GameStop NFT Marketplace dropped in the days after the service launched. Perhaps that’s not so surprising given months of pent-up demand among cryptocurrency and GameStop stock enthusiasts, which was unleashed on the platform’s launch day last Monday. Nor is it so surprising in the context of the broader NFT market, where a top market such as OpenSea has seen daily trading volumes fall by around 90% since its peak in January.

Nevertheless, the downturn is a setback for GameStop and crypto boosters hoping the introduction of NFT trading can revolutionize GameStop’s physical and mortar-focused business model. So far, if trading on the GameStop NFT Marketplace continues at the same weekly rate, it will see a total trading volume of around 273,000 ETH in the first year. That’s about $ 406 million today, or about 6.75% of GameStop’s $ 6.011 billion in net sales for fiscal year 2021.

Of this amount, GameStop will charge approximately 6,147 ETH in transaction fees (approximately $ 9.15 million), which is only approximately 0.15% of GameStop’s net sales for the fiscal year 2021 or 2.4% of its loss of $ 381 million for the fiscal year 2021 . Self whose HODL games stop all his ETH and cryptocurrency returns to its record high level of around $ 4,800, and then the annual transaction fee will be worth only $ 29.5 million (around 0.49% of net revenue in fiscal year 2021; 7.7% tax loss in 2021).

Of course, making tens of millions of dollars a year from a whole new industry is not a small feat, especially when GameStop does not have to worry about a lot of inventory or physical costs to sell. Still, it is not the kind of profitable performance that in the long run will seriously affect a multi-billion dollar business.

However, this is still the start of GameStop’s NFT business, and the broader NFT market may still return from its current crisis. Or perhaps the possible integration of “web3 gaming” assets into the GameStop marketplace (which the retailer says will be added “over time”) will help it “consolidate itself as the ultimate destination in the new gaming paradigm”, as Immutables Robbie Ferguson suggested. when announcement of a deal with GameStop in February.

For now, though, GameStop and its boosters will watch and wait for such a turnaround to happen. Until that happens, the GameStop NFT marketplace looks set to be a relatively small part of the international retailer’s business going forward.

List image of MetaBoy / GameStop NFT Marketplace

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