🎮 game changer
GameStop launches self-custodial digital wallet for crypto and NFTs.
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The Big Story
Remember GameStop?
That infamous video game retailer whose share price rose to a whopping 1500% last year and which drove the subsequent meme-stock craze trading that invited millions into the stock market?
Yeah, well, it's now pivoting to crypto.
Yesterday, the company announced the launch of its digital asset wallet for cryptocurrencies and NFTs.
The GameStop Wallet will allow gamers and others to acquire, store, and send Ether, NFTs, and ERC20 tokens (a standard allowing developers to make their tokens inside the Ethereum network) across decentralized apps (dapps) without having to leave their web browsers.
The wallet is non-custodial, meaning only you hold the private key to your digital wallets, and is hardware compatible, thus reducing the risk of being hacked or confiscated. It's currently available on Google Chrome and Brave as an extension, with the company planning to launch a mobile app for iPhone users soon.
Furthermore, the wallet leverages Loopring's zk-Rollup, an Ethereum Layer-2 (L2) scaling protocol designed for decentralized exchanges that supports cheaper and faster transactions.
Shortly after the release, some Twitter users put the wallet to the test. And the results were astounding.
Shares of GameStop were up nearly 3% at $98.21 in premarket trading on the news. But the stock was still down over 37% this year, from $152.8 to $95.
All that said, the timing of such an announcement couldn't have been worse. And GameStop knows this. Given the UST meltdown and the recent crypto market crash, GameStop cautioned users: "This is a beta launch. Please use responsibly, and do not add more funds than you are comfortable with."
NFT marketplace
In addition to this announcement, GameStop also revealed that it would debut its NFT marketplace in the second quarter of this year. This isn’t surprising considering that GameStop has been teasing about the launch since last May. But the company finally put an end to rumours in February when it announced its partnership with the Ethereum-based L2 project Immutable X.
The Sydney-based startup claims to be the "first layer two for NFTs on Ethereum" to provide “zero gas fees, instant trades, and carbon-neutral NFTs for marketplaces, games, and applications without compromise.” The duo also launched a $100 million creator grant to invite game developers and studios to build the future of Web3 gaming.
GameStop's NFT marketplace is currently in beta. And given that it uses Loopring's zk-Rollup tech, users can mint NFTs for less than $1—a fraction of what it would take to mint on L1 protocols—without comprising Ethereum L1 security.
So far, not much is known about its NFT marketplace, except that GameStop has hired over 20 people with experience in blockchain gaming, e-commerce and technology, product refurbishment and operations to build the product.
A crowded market
With the launch of its digital wallet, GameStop will go against big, established behemoths like MetaMask targeting the same focal point: Web3. But it’s not alone.
Last week, Coinbase rolled out a Web3 dapp wallet and browser extension for select users in the US, facilitating access to DeFi lending protocols, NFT trading, and token swaps on popular Ethereum-based decentralised exchanges like Uniswap and OpenSea. Even trading firm Robinhood, which launched its tightly-monitored crypto wallet last month, disclosed plans to release a Web3 wallet exclusively for NFT collectors and DeFi traders.
For some time now, GameStop has been working on revamping its business model. The company recorded an unexpected loss in March despite reporting an increase in sales. This latest push into NFTs and crypto is one such attempt that GameStop chairperson Ryan Cohen is counting on.
But historically, the gaming community has been against NFTs due to concerns over energy consumption associated with the proof-of-work consensus model. Major publishers like EA and Ubisoft have tried selling NFTs but faced the wrath of gamers, who prefer traditional console and PC games. But as Ethereum's long-awaited merge enters the final testing stage, it will be interesting to see how the overall community reacts.
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