GameStop Corp. shares surged after they announced a collaboration with crypto exchange FTX US, signaling the business is making gains in its strategic shift to NFTs.
The market is wary of Chairman Ryan Cohen’s drive into crypto to turn around the gaming industry, which hasn’t generated a quarterly profit since 2021. Cohen, who also established Chewy Inc., has pressed forward, targeting gamers as the NFT industry’s greatest audience.
GameStop will work with FTX US on e-commerce and internet marketing activities and offer FTX gift cards in certain shops. The partnership’s finances are unknown. In extended trade, GameStop shares, down 35% this year, surged 11%.
The deal builds on GameStop’s past excursions into NFTs, including the development of a digital asset wallet in June. In July, the business launched an NFT platform to trade these assets, despite the crypto sector slump.
GameStop’s switch to NFTs hasn’t shown yet. The company’s second-quarter net sales fell 4% to $1.14 billion, below analysts’ projections. The corporation lost $108.7 million, almost doubling.
FTX US established a stock trading facility for all US customers, including non-crypto investors, to enhance its client base and funds under custody. It’s teamed with Reddit to facilitate bitcoin payments.
GameStop’s approach has shifted in recent years from discs to downloads. Much of its retail business was affected by the Covid crisis and console supply issues. According to NPD Group, overall gaming expenditure declined 13% in the second quarter.
GameStop’s leadership has struggled to transition into crypto, with unimpressive results thus far.
GameStop is focusing on toys and collectibles in its locations. Sales reached $223.2 million in the quarter, up from $177.2 million the previous year.
Cohen was criticized after selling Bed, Bath & Beyond for $68.1 million in mid-August. Retail investors who rushed to him amid meme-stock hysteria lost millions. GameStop’s shares dropped.