GameStop takes its crypto dream a step ahead with a new partnership with FTX US
FTX US joins hand with GameStop to promote e-commerce and marketing initiatives in the crypto space
By Shashank Bhardwaj
The stocks of GameStop Corp. rose nearly 12 percent in the extended session on Wednesday, September 7. This came after the video game retailer announced a partnership with Sam Bankman-Fried’s USA-based crypto exchange FTX US. The collaboration aims to bring more customers to the crypto world. The two further intend to collaborate on online marketing initiatives. The rise in GameStop stocks is also thought to be influenced by the company's recent report on a 'smaller-than-expected' quarterly loss.
On September 7, the company said in a public announcement, "GameStop Corp. (NYSE: GME) ("GameStop" or the "Company") today announced that it has entered into a partnership with FTX US ("FTX"). The partnership is intended to introduce more GameStop customers to FTX’s community and its marketplaces for digital assets."
The two companies are coming together to promote e-commerce and marketing initiatives through this partnership. According to reports, FTX gift cards will be available at select GameStop retail locations. GameStop will be FTX's 'preferred retail partner in the United States' for the duration of the agreement. As of August 31, there are 2,970 GameStop locations in the United States. The financial terms of the collaboration were not disclosed by GameStop.
GameStop reported $1.136 billion in sales for the second quarter of 2022, missing consensus expectations by around $130 million. However, the company's collectibles segment was a bright spot. It saw sales of $223.2 million. This was up from $177.2 million recorded in Q2 2021. Despite reporting a nearly 4 percent decrease in net sales to $1.14 billion in the quarter, GameStop shares rose nearly 12 percent in after-hours trading, reaching $26.84 per share.
The collaboration marks a step ahead in GameStop's foray into the crypto world. GameStop has long been one of the most well-known names among the so-called 'meme stocks.' Meme stocks are those that are driven by social media. GameStop was at the epicentre of a social media-fueled trading frenzy last year. This caused its stock to skyrocket. In January of this year, the company unveiled an NFT and Web3 gaming division. On July 11, it also launched its NFT marketplace in collaboration with Ethereum (ETH) scaling solution Immutable X.
GameStop has established a $100 million fund denominated in Immutable X's IMX tokens in order to attract NFT creators. The company eventually intends to host billions of low-cost in-game digital assets and NFTs. Digital real estate and in-game skins are examples of these. In this manner, the company hopes to generate a significant new source of revenue.
In addition, the company recently laid off employees. CEO Matt Furlong also emphasised the company's blockchain group in a memo to employees about the layoffs. He stated that the new partnership with FTX is intended to create something 'unique' in the retail space.
Talking about the same, Furlong stated, "The deal we just announced with FTX is a by-product of our commerce and blockchain team, working hand-in-hand together to establish something unique in the retail world."
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash