Is Gamestop moving to Web3 without Gamers?
Gamestop has generated a lot of interest over the last 2 years following its wild price action spurred by Reddit users. Since that time, the company has expanded itself towards a web3 business model with its new NFT Marketplace where projects are all individually curated by the GameStop team to promote NFT collections which embody the spirit of video games and GameFi.
Since its launch, the NFT marketplace has generated over $50,000 in profits for the company with over $3,000,000 being traded through volume. While the numbers aren’t near Opensea and other NFT marketplaces, it’s a strong start for a company that is transitioning itself from web2 and into web3; however, there are still major challenges which need to be overcome before the new marketplace can thrive.
New Direction for Video Game Industry
GameFi has become one of the hottest topics in the web3 ecosystem because of the potential that P2E games have for players and developers. The ability to reward players with real value through their play offers a new aspect of gaming which has never been done before.
However, gamers are increasingly hesitant to trust this new style of gaming due to previous issues with microtransactions and a fear that more monetization will only reduce true entertainment value.
Yet, GameStop finds itself in an interesting situation where its popularity as a gaming retailer has gone through some intense cycles lately.
GME Short Squeeze
As many already know, the GME short squeeze in January 2021 was one of the most surprising events in American business, with many investors hitting the jackpot.
Following many bullish indicators including low trading volume and a high number of short selling patterns, traders such as u/DeepFuckingValue were able to capitalize on massive ROI’s as the price of GME shares shot up from $4 to $350 within a year.
This event caused a major shift in activity on Reddit where support for the company went wild, where “diamond hands” and “hold the line” became battlecries for users on r/Wallstreetbets overnight.
Spurred on by this public sentiment, the company began to shift its focus from a brick-and-mortar video game store to becoming an online platform where gamers could congregate.
Then, shortly after the squeeze, Beeple’s digital artwork sold for $69 million at a Christie’s auction in Singapore, blowing up the NFT scene and causing a massive surge in liquidity for crypto.
Looking at all of this, Gamestop decided that an NFT marketplace would be their best option and began building their platform.
Curated Projects
In order to stand out among other marketplaces which have been facilitating NFT trades for a few years now, GameStop has decided to take a more focused approach on collections that relate to gaming similar to how Autograph approaches NFTs that are connected to athletes and professional sports.
In turn, one of the things that GameStop does is personally evaluate each and every project which applies to their marketplace for listing. Through this process, GameStop can approve or reject collections that meet their standards.
Collection Controversy
A key issue with the curated projects is that some of the collections which have made it through their evaluation have been noted as offensive and bizarre. The key issue stems from a collection which depicted a person falling from a skyscraper nearly identical to the image of a man jumping from the World Trade Center during 9/11.
Although art like this is not rare on the internet, it is entirely bizarre that GameStop would allow this sort of imagery to pass their standards for their marketplace. Firstly, because the image is totally offensive to Americans and victims of the tragedy, but also because it does not correlate with video games.
Fortunately, the offensive collection has been delisted by GameStop. However, it is not the first impression that the company should have made. This kind of blunder is hard to forget, especially with the current status of the NFT market which has been doing poorly lately.
Future of GameFi
Looking on the bright side, if GameStop can prevent this kind of material from reaching their marketplace then it could rebound. Although GameFi is suffering from the crypto crash and a lack of interest in blockchain gaming by web2 users, it still has the capacity to improve as market conditions soften.
With better curation practices, GameStop could evolve to become a key hub for web3 users that are using the blockchain to build the next generation of video games. They’ll just have to attract more web3 users first.
