GameStop recently announced its decision through a pop-up message on its NFT marketplace to discontinue support for its proprietary crypto wallet, GameStop Wallet, which doesn’t really come as much surprise.
The wallet itself was introduced to the public in May 2022 to support NFT trading through the retailer’s native NFT marketplace.
While the video game retailer’s move is underpinned by the regulatory uncertainty of the crypto space as among the SEC, CFTC, and lawmakers, GameStop has been publicly hinting that this would ultimately be coming down the pipeline.
Since GameStop took its first steps into the NFT world back in Q2 2022 with the debut of its own marketplace that would support crypto-based games, its commitment to the crypto space and the further development of initiatives gradually diminished in efforts to protect stockholders financial interests. It also partnered with the now fallen FTX crypto exchange platform last September.
However, the public launch of its NFT marketplace was met with mixed reactions, where some users had taken to Twitter to express their disappointment in what appeared to be an “aggressive Web3 strategy.”
Support will end in November
According to the pop-up message, GameStop will discontinue its wallet support on November 1, which includes the iOS mobile app and the Google Chrome web browser extension. GameStop customers and users have been advised to back up their wallet’s secret passphrase by October 1, in anticipation of the impending shutdown.
Unfortunately, the lack of leadership and willingness by SEC Chair Gary Gensler to really help push forward clearer guidelines and insight, has come to the detriment of industry participants and investors. Gensler’s priority for the past several years has been to continue down a futile path of enforcement actions that seek only to penalize without offering up any guidance behind those decisions.
The discontinuation of the wallet, however, is not the only significant change at GameStop.
Roughly two months ago, the company parted ways with CEO Matt Furlong who was initially hired to help facilitate the wallet’s and marketplace’s launch. Furlong’s tenure not only witnessed the launch of both the wallet and NFT marketplace, but also GameStop’s fruitful partnership with the Ethereum scaling network, Immutable X. The partnership had promised a $100 million incentives fund dedicated to developers working on the network.
Although, even before his departure, Furlong had hinted at a shift in GameStop’s strategy during a December 2022 earnings call where he mentioned that GameStop would not be committing significant shareholder capital to the crypto sector.
GameStop’s journey has been marked by several challenges and transformations. With over 4,400 physical stores operational worldwide as of January, the company has grappled with the evolving dynamics of the video game industry, which is steadily moving towards these types of digital platforms.
Reports from December 2022 indicated that GameStop had laid off several employees, including those working on crypto wallet engineering. This move aligned with Furlong’s statements about the company’s changing focus and its gradual distancing from both the crypto and NFT arenas.
As the crypto industry continues to navigate regulatory challenges and the broader market dynamics shift, GameStop’s decision underscores the complexities businesses face when integrating digital assets into their operations, and whether it’s a good financial investment to “get in early” with these emerging technologies.