Gamestop's NFT marketplace - Have they missed the boat?
My news feeds have been peppered with the notification that Gamestop has just launched their new NFT marketplace.
It feels like every major news publication is covering the launch in one way or another.
Thing is, I can’t help thinking GameStop have missed the boat here, and for more than a few reasons. .
Launching a new business - or offer - during a recession isn’t necessarily a bad thing. A lot of brands launched during economic downturns end up hugely successful.
In fact, around half of all Fortune 500 brands were launched during times of financial crisis.
Here’s the thing though. I’m honestly not certain whether or not Gamestop’s launch of this new marketplace is going to do well.
Cause I don’t think it’s needed, offers anything suitably new, or solves any problems.
The problem with Gamestop’s NFT marketplace launch
A quick look through the Gamestop NFT marketplace shows you pretty much the same kind of artwork and NFTs you’ll find on any of the other, more established and trusted NFT marketplaces.
Generative art that has a few “unique” elements to boost collectability.
Some artwork many might find cool. But it’s not exactly different from what you’d find on something like OpenSea.
It feels like little more than another OpenSea clone.
There’s no real reason for us to choose this over any one of the other more established marketplaces tha have better UX and selection.
The selection itself isn’t too big of an issue as they can add more pieces (I’m willing to bet this initial week is filled with “exclusive” launches”).
But the fact is it’s a knock-off of the NFT marketplaces that saw their peaks months ago.
The folk over at r/WallStreetBets might be bullish on anything GameStop, but there’s only so much they can do.
When a service offers no true benefits or differentiation over more established players, it struggles to make waves.
What about their gaming fanbase?
This feels like a no-brainer.
There’s a growing trend for brands to create Web3 games that have NFT elements built-in as core mechanics. Look at Axie Infinity as an example.
The whole idea of gaming NFts has been a big talking point for the last 6-12 months.
Most people point to the sale of things like skins in Fortnite as proof that this could work.
It should be a compelling argument as Fortnite skins have helped this free-to-play game to generate an estimated $5.8 B in 2021.
The problem though is that GameStop doesn’t own any gaming IP.
Which means they’re going to find it almost impossible to license “official” in-game NFT merch.
I mean, can you imagine someone like Ubisoft letting Gamestop sell official merch when they could collect the moey from transaction fees?
Now, GameStop could have looked at becoming a secondary market for gaming NFTs. To partner with other brands and help them increase reach to the GameStop audience.
It looks like there are plans for them to do this. You’ll find the below notice on their homepage.
But I still can’t see much in the way of potential here.
Because there’s no real market or interest in linking games to NFTs from gamers.
If the user negativity wasn’t enough, it was picked up and spun 100 different ways in the press as “Ubisoft screws the pooch with gaming NFTs”.
It appears that very few people see the value in NFTs within games.
I can’t see any value with the current offerings.
Games including Fortnite have built incredible brands and revenue streams without the need for complicating the user experience with a separate, silo’d blockchain marketplace.
They have an “in-game” store which offers the perfect functionality for users to buy skins direct from the publisher.
Adding another link into that chain feels like complication for complications' sake.
But there’s a bigger issue out there that could further dent GameSpot’s attempts at creating a new NFT marketplace.
The total NFT market appears to be crumbling
Here’s the thing, even the super established brands like OpenSea are struggling right now.
They’ve seen huge drops in both interest and trading volume.
Here’s a quick view of how unique traffic to these sites has been affected from Q1 2022 to Q2 2022.
Between these 5 very popular NFT marketplaces, there’s been an average decrease in traffic (and thus interest) of 41.65%.
That’s almost half of the people who were checking out NFTs in Q1 are returning to look into them in Q2.
Here’s the really damning stat though.
When you look at the number one NFT marketplace in the industry - OpenSea - their trading volume has dropped significantly.
Transactions on Ethereum blockchain have dropped to their lowest levels since July 2021.
In short, The hype around NFTs seems to be waning very quickly.
Yes, we’re in a bear market, but the effect on NFTs has been worse than on Crypto (upto this point).
And it really comes down to a fundamental reason that GameStop is not addressing.
Why is the NFT marketplace seeing worse drops than crypto?
I've written about the uses of blockchain in my very limited opinion before.
The main reason I think a lot of blockchain brands - and that includes crypto and NFT companies - are struggling is due to a lack of real-world usage.
For blockchain to really go mainstream it needs to solve a real problem or make an existing solution more efficient, and a lot of the current applications of blockchain simply don’t do that right now.
I do think that there are some people out there working on useful needs outside of crypto and finance, but we’re not at a point where many of them have taken off.
And this is also true for NFTs, for them to be successful, they have to solve a real problem. Few do this.
Most of them are simply “cool” artwork which you can buy for a few hundred bucks.
And that’s not good enough.
When I analysed some blue-chip NFT collections they all had one thing in common.
The NFT itself was a signifier of membership to a community.
And the community was there to help a specific subset of people achieve a certain goal together.
The use here is that the NFT is an “entry ticket” of sorts to a community of like-minded and collaborative people.
That’s the use, and it solves the problem of entry into a paid membership.
GameStop’s NFTs don’t appear to have any real usage. That may change if they nail the gaming front, but I can’t see it happening.
In short, I think they’ve launched a generic marketplace at a time when the established players are seeing huge drops in interest and revenue.
Which, to me, is a recipe for failure.
It feels like a terrible cash grab from a company that hasn’t spent the time to work out how it can actually help customers.
I could - and hope - I’m wrong on this though.
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