GameStop looks ahead to NFT market launch after big Q4 loss

The much-loved video game retail chain GameStop (GME) is looking ahead to its long-awaited NFT marketplace and Web3 gaming division after suffering a $147.5 million net loss in the fourth quarter of 2021.

GameStop quietly built a simple NFT website in mid-2021, but has ramped up its efforts significantly this year, unveiling an NFT and Web3 gaming division in January and signing a major contract with ethereum scaling solution Immutable X the following month. Partnership to build an NFT marketplace.

As part of its fourth-quarter results (which ended January 29, released March 17), GameStop revealed that it intends to launch its NFT marketplace by the end of the second quarter of 2022.

GameStop will reportedly open its NFT marketplace by the end of the second quarter of 2022.

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The company also emphasized that the Immutable X deal will bring the company $150 million worth of IMX tokens after “certain milestones are achieved,” noting that it has additionally hired “dozens of people in blockchain gaming, e-commerce and experienced employees in areas such as technology, product refurbishment and operations”.

GameStop’s net loss of $147.5 million was 83% higher than its loss a year earlier, or a loss of $1.94 per share, well above Wall Street’s forecast of $0.84 per share.

GameStop’s Q4 earnings report appears to have had a significant impact on GME’s stock price, which is down 7.31% at around $81.29 as of this writing. Despite the positive progress on the Web3 initiative, GME prices have been on a strong downward trend this year, with prices down more than 40% since the beginning of January.

Digging deeper into the report, GameStop’s sales were $2.254 billion last quarter, up slightly from $2.122 billion a year earlier. A major hurdle in the latest figures was cost of sales of $1.87 billion, while selling, general and administrative expenses totaled $538.9 million.

The company raised more than $1.67 billion, which was enough to wipe out “all of the company’s long-term debt, with the exception of a $44.6 million low-interest unsecured term loan related to the French government’s response to the Covid-19 pandemic.”

Despite the bearish trend in the NFT market over the past few months, GameStop partner Immutable X has gone from strength to strength, with the company announcing a $200 million Series C round on March 8 at a valuation of $2 billion, which puts the The price of IMX surged by about 50% in 24 hours, reaching about $1.78. Since then, the price has retreated to around $1.54.

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