Dive Brief:
- GameStop has tapped Immutable X as a technology partner and platform to launch a marketplace for non-fungible tokens, according to a press release and securities filing from the retailer.
- GameStop also entered agreement with Digital Worlds NFTs to encourage new projects using Immutable X's technology via grants to creators of the firm's IMX tokens, with a commitment of up to $100 million in the tokens.
- GameStop expects its NFT marketplace to launch later this year.
Dive Insight:
With Ryan Cohen in the chairman spot, GameStop has been working toward a technological makeover.
When Cohen, who founded online pet retail specialist Chewy, took an activist stake in GameStop in late 2020, he pushed the company's management and board at the time to transform it from a brick-and-mortar retailer into a technology company.
In the time since, the company's vision and strategy for the future has come out only in drips and drabs. What has been visible is the influx of executives with backgrounds at tech giants like Amazon, Google and others. CEO Matt Furlong, one of the Amazon vets to join the gaming retailer, said late last year that GameStop has made more than 200 senior hires "from some of the top technology companies." To recruit talent, the company has added offices in two major tech hubs, Seattle and Boston.
But what a successful technological transformation means for a retailer with thousands of stores and whose category is rapidly being digitized — in a way that would seem to negate the need for a third-party retailer between game makers and consumers — has been and is still an open question.
GameStop's partnership with Immutable X and its plans to launch an NFT marketplace is another hint at the retailer's vision for its future. But there again, plenty of questions remain. NFTs themselves are simply unique digital artifacts created with blockchain technology, meaning they can take all sorts of forms. Moreover, the ultimate value and adoption of various NFTs are still matters of speculation.
Through the partnership, GameStop is encouraging programmers and game developers to "power the future of Web3 gaming" with IMX token grants as an incentive. What will come of the effort, what GameStop's NFT marketplace will look like or how it will function, if it will be popular with consumers or profitable to GameStop — all are questions without an inkling of answers at the moment.
Jefferies analyst Stephanie Wissink said in a research note from January, "Recent headlines re: GME's involvement in the growing metaverse and NFT marketplace are intriguing, but still very difficult to size and to apply value in our financial model."
GameStop isn't the first retailer to pivot to futuristic technology. Online furniture specialist Overstock made several bets on blockchain and cryptocurrency technology last decade, only to hemorrhage money, lose focus and ultimately pivot back to retail.
Meanwhile, GameStop's current core business of selling video games and hardware is not likely to get any easier. After Xbox maker Microsoft's announced plans to acquire videogame publisher Activision, Wissink cut the price target for GameStop stock for the second time in January.
"Both companies are key vendors to [GameStop]," Wissink said of the Microsoft-Activision tie-up. "A combo fortifies power over the retailer; could reshape volumes for Activision titles if made exclusive to Xbox; and portends a more rapid transition to cloud-driven IP gaming."
