GameStop’s NFT Marketplace: What Investors Need to Know
GameStop‘s (GME) – Get GameStop Corporation Report The NFT (non-fungible token) marketplace has been live in its beta version since July 11. Launched through a partnership with Immutable X, the platform promises users the ability to trade in-game assets via blockchain tokens on Ethereum (~ETHUSD) platform.
In the first 48 hours, the platform recorded more trading volume than Coin base‘s (COIN) – Get Coinbase Global Inc Report NFT marketplace. This has motivated GameStop investors and helped the stock rally.
Here’s what you need to know.
Figure 1: GameStop’s NFT Marketplace: What Investors Need to Know
GameStop
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An exciting start
Since its launch, GameStop’s NFT marketplace has shown some intriguing statistics. During the first few days, it averaged $1.1 million in total daily trading. In the first week, the platform had already accounted for over 5,254 ETH in total trading volume.
This is almost twice as much as Coinbase’s NFT marketplace, which has been live since May.
By comparison, Coinbase users have so far traded 1,913 ETH, which equates to about $2.8 million, according to Dune Analytics. However, unlike GameStop’s NFT marketplace, Coinbase does not charge transaction fees to trade NFTs.
GameStop takes a 2.25% fee on all NFT trades, which so far represents a daily average of $25,113 – or 16.9 ETH – in direct revenue for the company.
And of all the 300 collections available on the platform, Ars Technica indicates that only six have accounted for the majority of trading volume so far.
It is possible to attribute the platform’s early success to the loyal support of GameStop’s shareholders. The hype around the launch was huge on Reddit and other social media platforms.
Since the launch of the NFT marketplace on July 11, GameStop shares are already up more than 16%. Of course, the platform can’t take all the credit: News that GameStop will split its stock on July 21 also helped the stock rally.
But it’s clear that GameStop investor sentiment is on the rise.
The NFT market is proving to be resilient
On the bright side, the general NFT market has proved resilient in response to bearish trends in the crypto market. Ethereum has fallen more than 60% since the beginning of the first quarter. Nevertheless, the market value of NFTs grew from May to June.
Figure 2: NFT market value vs. ETH price.
DappRadar
When we look at the annual performance of NFT, we see that the numbers are quite positive. Trading volume and sales increased by 533% and 59% respectively compared to the same period last year.
A threat to OpenSea?
Currently, the largest NFT marketplace is OpenSea. Data from earlier this year indicated that the company had around 80% of the NFT market share and had around 1 million users by 2022.
Reports from early 2022 indicate that OpenSea generated around $2 billion in trading volume in January, with an average daily trading volume of an impressive $260 million.
But the latest data from DappRadar shows that in the last 30 days, OpenSea has had a trading volume of $497.6 million, a significant decrease.
Back in 2021, the company generated revenues of $365 million. OpenSea charges a fee of 2.5% per trade, which is slightly higher than GameStop’s NFT marketplace. With this, OpenSea’s market value was estimated to be around 13 billion dollars in early 2022.
According to Ars Technica research, considering the current weekly volume of GameStop’s NFT marketplace, we will see a trading volume of around 273,000 ETH in the first year. That would bring in about $406 million today — about 6.7% of GameStop’s $6 billion in net sales recorded in 2021. Those numbers wouldn’t even beat OpenSea’s trading volume in June of this year.
Even if we assume that ETH reaches an all-time high of $4,800 again, the annual transaction fees will still be $29.5 million, a small percentage of GameStop’s net sales in 2021.
GameStop investors should therefore be aware that the NFT Marketplace is a long-term revenue generating initiative. Don’t expect your business to become a revenue powerhouse right away.
However, you should of course consider that GameStop’s NFT marketplace has just launched and is still in beta. OpenSea has existed since December 2017.
GameStop’s management has much bigger plans for the NFT marketplace, including the GameStop wallet, the expansion of Web 3.0 into gaming, and an expansion into digital markets with a long-term perspective.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. The article may also contain affiliate links. These partnerships do not influence editorial content. Thank you for supporting Wall Street Memes)
