GameStop plans new NFT division to turn around business

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GameStop has reportedly already hired 20 people to build an NFT marketplace for trading virtual goods such as game outfits and weapons.

GameStop, the US video game retail giant, is hoping to cash in on non-fungible tokens (NFTs) and crypto to turn around its loss-making business.

According to the Wall Street Journal, GameStop is launching a new division later this year that will build an online marketplace to buy, sell and exchange NFTs of virtual gaming items such as outfits for avatars, land and weapons.

The company is also reported to have hired 20 people to create the NFT marketplace, where it has asked some game developers and publishers to list NFTs. GameStop is also said to be in talks with two crypto companies to sign partnership and co-invest in blockchain-based game development.

Chief executive Matt Furlong first hinted at the move in a GameStop earnings call last month, where he told investors the company was exploring options in the NFT and crypto space. “We believe our emphasis on the long term is positioning us to build what will ultimately become a much larger business,” he said.

The news led to a 27pc boost in GameStop shares as investors jumped to capitalise on a rapidly trending sector. Game makers Ubisoft, Zynga and Square Enix have all expressed interest in the NFT space in recent months, with the latter’s president saying it will be a “major trend” this year.

While GameStop sales were up in the most recent quarter, losses at the company widened. Growth was seen in sales of hardware and accessories, but the company’s video game selling segment saw a 2pc plunge in revenue.

The company was at the centre of a ‘meme stock’ trading frenzy early last year, in which retail investors hyped GameStop stocks on Reddit and Robinhood in a coordinated effort that provided a blow to hedge funds. The company went on to overhaul its executive team to make its strategy more tech-centric.

The NFT space has seen a boom in interest in recent months. This week, NFT marketplace OpenSea was valued at a whopping $13.3bn after raising $300m in a fresh funding round.

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