GameStop shares rose 22% in extended trading Thursday after a Wall Street Journal report revealed that the gaming goods retailer is planning to create a non-fungible token market (NFT). The report, which cited people familiar with the matter, revealed that GameStop is seeking blind partnerships to create games and products for the NFT market.
The Texas-based company, Grapevine, has reportedly hired more than 20 people to run the NFT business, which will include an online hub for buying, selling and trading NFTs for virtual video game goods such as token clothing and weapons.
At the time of writing, GameStop (GME) stock is trading at $131.03. This price represents a gain of 1.28% on the day. By taking advantage of the booming NFT market, GameStop could get a much-needed change of pace that frees it from its trend of posting huge losses despite its stock flexibility.
GameStop is currently based on actual sales of new and used physical video games. However, Ryan Cohen, the company’s newly elected chairman, is keen to steer the company in the direction of technology.
Notably, GameStop’s decision to embrace NFT is not new. The company launched a barebones website called GameStop NFT in May 2021.
The site invited content creators to participate in shaping the NFT platform, stating:
We welcome exceptional engineers (hardiness, reaction, python), designers, gamers, marketers, and community leaders. If you would like to join our team, send your profile or anything you’ve created to: [email protected]”
Forming strategic partnerships
According to sources, GameStop is asking select game developers and publishers to include NFT in its market when it launches later this year. Specifically, the company is close to entering into two strategic partnerships with two crypto companies that will share their technology and joint investment in games, as well as other NFT-related initiatives.
Loopring, a Layer 2 protocol rumored to be one of the companies working with GameStop, has also seen an increase in the original token. At the time of writing, Loopring (LRC), the 61st cryptocurrency by market capitalization, is up 6.66% in the past 24 hours to reach $1.81.
While incorporating NFTs into its business may help turn GameStop’s luck, it’s worth noting that the plan is fraught with risks. Experts believe the NFT space is a huge bubble that will inevitably burst, leaving investors shattered.