GameStop Abandons Crypto As Q3 Losses Reach $95M
Although the gaming firm has taken steps to reduce its exposure to cryptocurrency activities, it appears to be continuing to move forward with initiatives connected to non-fungible tokens (NFTs) and blockchain technology.
After recording a net loss of $94.7 million during the third quarter and laying off workers from its digital assets section, gaming retailer GameStop has announced that it would no longer concentrate any efforts on cryptocurrency.
GameStop's Chief Executive Officer, Matt Furlong, stated on an earnings call on December 7 that the company has "proactively limited exposure to cryptocurrencies" over the course of the previous year and "does not currently own a meaningful amount of any token."
The firm said earlier this year that it was looking into crypto, nonfungible tokens (NFTs), and Web3 apps as potential paths for development. The company described these areas as being "increasingly important for gamers of the future."
In the future, GameStop will place a greater emphasis on collectibles, used game systems, and previously owned things.
In a filing made with the Securities and Exchange Commission on December 7, the company stated that it is "also pursuing, and plan[s] to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology." These statements give the impression that the company is still moving forward with its plans to make moves in the non-fiat currency space.
Following a public beta launch in July, GameStop brought a number of Web3-related products to market, the most recent of which was its NFT marketplace, which went live on October 31 on ImmutableX, an Ethereum layer-2 blockchain. This came after GameStop pushed a number of other Web3-related products.
Earlier, in May, the business introduced a beta version of its self-custodial cryptocurrency wallet, and in March, it introduced a test version of its NFT marketplace on Loopring.
The losses that GameStop incurred during the third quarter were marginally reduced as compared to the second quarter, which had losses of $108.7 million.
Additionally, this is a year-over-year gain for GameStop, which reported a loss of $105.4 million in the third quarter of the previous fiscal year.
According to reports, the crypto section saw staff layoffs.
As verified by Furlong on the results call, GameStop conducted its third round of layoffs for 2022 on December 5 and let go of several employees as a result.
Furlong did not clarify where the majority of the personnel losses were centered; prior reports claimed that the team working on the company's blockchain and NFT initiatives was the most impacted; however, Furlong did not provide this clarification.
A former iOS and blockchain programmer named Brandon Jenniges commented on his blog that he "had a terrific day taking a deep dive into Ethereum and learning about many new things in the crypto sector."
In July, the firm let off a number of employees at its magazine dedicated to video games, Game Informer, including its chief financial officer Michael Recupero and many other staff members.