GameStop to drop crypto efforts as Q3 losses near $95M

Gaming retailer GameStop says it will no longer focus any efforts on cryptocurrencies, after amounting $94.7 million in net losses in the third quarter and laying off staff from its digital assets department.

During a Dec. 7 earnings call, GameStop CEO Matt Furlong said the video game retailer “proactively minimized exposure to cryptocurrency” during the year and “does not currently hold a material balance of any token,” adding:

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.”

The company said earlier this year that it was looking at crypto, nonfungible tokens (NFTs) and Web3 applications as avenues for growth, calling these spaces “increasingly relevant for gamers of the future.”

Going forward GameStop will shift its focus to collectibles, gaming and pre-owned items.

Its moves in the NFT space are still seemingly going ahead, as it says its “also pursuing, and plan[s] to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology,” according to a Dec. 7 filing with the Securities and Exchange Commission.

Cointelegraph contacted GameStop to confirm that it would continue efforts on its NFT marketplace but did not receive a response.

GameStop has pushed numerous Web3-related products, the most recent being its NFT marketplace went live on Oct. 31 on ImmutableX, an Ethereum layer-2 blockchain, following a public beta launch in July.

Earlier, the company launched a beta self-custody crypto wallet in May and a beta NFT marketplace on Loopring in March. Loopring is another Ethereum-based layer-2 protocol.

It also partnered with the now-bankrupt crypto exchange FTX US in September, aiming to bring more customers to crypto and to work together on e-commerce and online marketing initiatives. It ended ties with the exchange on Nov. 11, soon after it filed for bankruptcy.

GameStop’s Q3 losses slightly narrowed compared to the second quarter, which saw losses of $108.7 million. It’s also a year-on-year improvement for GameStop, which posted a $105.4 million loss in the third quarter of 2021.

Staff cuts reportedly hit crypto department

On Dec. 5, GameStop cut multiple staff in its third round of layoffs for 2022, as Furlong confirmed in the earnings call.

While earlier reports suggested that the team working on the company’s blockchain and NFT projects was the most impacted, Furlong did not specify where the staff cuts were concentrated.

Still, posts from employees and people claiming to be former employees have shed some light on the layoffs. Daniel Williams, lead software engineer at GameStop, wrote in a Dec. 5 LinkedIn post:

“Another big round of layoffs from GameStop currently in progress… E-commerce Product and Engineers… Lots of them.”

Other posts from those claiming to be affected by the cuts also appeared on LinkedIn at the time. Brandon Jenniges, a former iOS and blockchain engineer posted he “had a great time getting a deep dive into Ethereum and learning about many new things in the crypto space.”

“I and the rest of the mobile team were let go,” wrote former developer Christopher Fields.

In July, the company terminated its chief financial officer, Michael Recupero, and a number of staff at its video game-focused magazine Game Informer.