GameStop just realized that Blockchain won’t save it
When you say the word crypto these days, the reaction to it is likely to be very different than it would have been a few years ago.
At the time, there was a lot of buzz about the possibilities of digital currency. Well-respected billionaires like Tesla CEO Elon Musk and Twitter founder Jack Dorsey invested, prompting others to do so as well. Retailers struggled to accept bitcoin and other forms of crypto as payment, wanting to modernize themselves and keep up with the times. After all, if these industry giants are doing it, so should the rest of us, right?
Unfortunately, 2022 has been a terrible year for crypto in general. Both Dorsey and Musk have changed their tune on that since a crypto winter hit in the middle of the year, sending the value of digital currencies plummeting and leaving many wondering if the whole thing was a good idea after all.
Then November brought the absolute collapse of cryptocurrency exchange FTX, reducing founder Sam Bankman-Fried’s $21 billion fortune to nothing in a matter of days. For many already skeptical of crypto, this incident pushed it into a freshly dug grave and kicked dirt on top.
Now, many of the businesses that rushed to support crypto are suddenly turning cool about their investments. The latest of them, the video game retailer GameStop (GME) – Get a free reporthas begun to take action on what may have been one of its last hopes for a foothold in the rapidly changing video game retail market.
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What happened to GameStop?
GameStop is the latest high-profile company to announce layoffs in December, following Amazon, Alphabet, DoorDash and more.
Affected employees posted about the layoffs on LinkedIn on Dec. 5, Axios reports, with the team responsible for the company’s blockchain projects “heavily affected.”
Six software engineers confirmed they were laid off, including former lead software engineer Daniel Williams, who wrote: “Another big round of GameStop layoffs going on right now… E-commerce products and engineers. Lots of them. Stay tuned for help our friends with finding new homes quickly!!”
CEO Matt Furlong sent a chipper email to employees, which was obtained by Kotaku.
“As we emerge from the rebuilding phase of our transformation, GameStop has a strong foundation to pursue near-term profitability and long-term sustainable growth,” it said.
Furlong also cited inflation and “weakening customer confidence” as reasons for the layoffs. The company also had two previous rounds of layoffs this year.
Before and after Meme Stock
The video game retailer has struggled to adapt as the video game market has shifted in a largely digital direction, leaving stores thinly staffed and many employees walking out following allegations of
After being embraced as a meme stock in January 2021 after eager retail investors flocked via Reddit’s Wall Street Bets sub, the retailer received some positive attention. But with revenue falling steadily since 2016, it needed more than that to remain relevant in the eyes of customers.
In June 2022, GameStop announced that it would transition to blockchain and NFTs, a move that seemed odd for a business that primarily appeals to people who play video games. The general response from the gaming community to crypto and NFTs has been lukewarm at best and quite negative at worst.
But with the cryptocurrency market once estimated to be worth $2.2 billion by 2026, it’s most likely that GameStop just saw it as a lifeboat and took it.
GameStop will report its quarterly results on December 7.
