GameStop to Step Back From Crypto Amid Plunging Revenue

American video game retailer GameStop has announced that it is redirecting its focus from crypto-related businesses. The company came to this decision after it recorded a net loss of almost $95 million in Q3. In addition, GameStop laid off most members of its digital asset team. 

According to a Q3 2022 Gamestop Corp. Earnings Conference Call, Matt Furlong Chief Executive Officer (CEO) of GameStop clarifies that the company has proactively minimized its exposure to cryptocurrencies over the year. Furlong also mentioned that the company currently has no material balance in any token.

Like many other crypto enthusiasts who have voiced their stance in recent times following the liquidity crunch faced by Bahamian-headquartered crypto exchange FTX, the GameStop CEO believes that there is a high prospect for digital assets in the long run.

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space,” Furlong said.

GameStop’s Reign in the Crypto Industry 

Unlike the present situation, GameStop started this year filled with enthusiasm for digital assets, Non-fungible tokens (NFTs) and so many other Web3.0 applications.

In March, GameStop tapped the Ethereum-based layer-2 protocol Loopring as the underlying protocol for its NFT marketplace. The choice of the protocol was influenced by the “need to be fast, cheap, and secure for the masses.”

Not long after, the American video game retailer launched an Ethereum-based non-custodial wallet as a web browser extension.

Gamers could use the wallet to store, send, receive and use cryptocurrencies and NFTs across decentralized apps without having to leave their web browsers. Also, the wallet provided gamers with complete autonomy over their funds.

However, GameStop began to notice disappointment in the digital asset department after it got its Q2 earnings report. Based on the report, the firm lost hundreds of millions which was attributed partly to a change in its leadership. As a way of bouncing back, GameStop partnered with the United States arm of the now-bankrupt FTX.

At present, GameStop has decided to be more concerned with collectibles, gaming and pre-owned items.

The firm still very much has its focus on NFTs and according to a recent filing with the Securities and Exchange Commission (SEC), its “also pursuing, and plan to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology.”