Analysis: GameStop’s NFT Trading Slows in Market’s First Week

Enlarge / If GameStop’s NFT business is going to go “over the moon”, the total trading volume on the platform has bent in the wrong direction so far…

Last week, when Ars analyzed the first day of NFT sales on GameStop’s heavily publicized crypto market, some boosters were quick to suggest that this was just a starting point and that interest and trading volume could increase over time and as more and more people discover the trading platform. In the first week of the market, however, interest in trading GameStop NFTs appears to be waning compared to this launch day’s performance.

An Ars-exclusive analysis of the GameStop NFT marketplace now shows that it was responsible for around 5,254 ETH in total trading volume in its first week (worth around $7.8 million at exchange rates). current exchange rates). This represents a daily average of around 750 ETH ($1.117 million) in total trading volume. GameStop takes a 2.25% fee for all such transactions, which represents a daily average of 16.9 ETH ($25,113) in direct revenue for the company. In total, six of the more than 300 collections on the platform are responsible for the majority of this trading volume.

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(Note: Ever-volatile ETH prices are up ~38% since last Tuesday when Ars conducted its launch day market analysis. Unless otherwise specified, we are using the current ETH spot price – $1,488.06 at time of writing – for conversions here, though transactions earlier in the week likely took place at lower dollar/ETH rates.)

The average daily trading volume in the first week is a significant slowdown from the market’s launch day, when it processed 1,831.81 ETH in total trade volume (worth around 1.976 million dollars at the time or $2.725 million at current rates), according to Ars’ analysis. On that first day, GameStop earned around 41.2 ETH in transaction fees (worth around $44,500 back then or $61,331 today).

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Enlarge / The “GameStop Astronaut MetaBoy” NFT has been one of the most popular to hit the market recently, bringing over 163 ETH in total trading volume in less than a week.

Of the hundreds of NFT collections that saw some trading activity on the first day of trading, the median collection saw average daily volume decline by around 50% in the first week of trading (compared to daily volume). of the launch). This does not include 34 collections that have yet to see a single trade on the market, 25 of which have been available since day one.

And the dozens of new NFT collections on the market (i.e. those that saw their first trades after market launch day) don’t bridge that gap. These roughly 85 collections are only responsible for 556 ETH of the total trading volume over the past six days (approximately $828,575).

The wrong direction

Whichever way you slice it, total activity in the GameStop NFT Marketplace slowed in the days following the service’s launch. Perhaps that’s not too surprising, given months of pent-up demand among crypto bulls and GameStop stock enthusiasts that was sparked on the platform’s launch day last Monday. It’s also not so surprising in the context of the broader NFT market, where a top market like OpenSea has seen daily trading volume drop around 90% since its peak in January.

Nonetheless, the slowdown is a setback for GameStop and crypto boosters who are hoping that the introduction of NFT trading can revolutionize GameStop’s brick-and-mortar focused business model. For now, if trading on the GameStop NFT Marketplace continues at the same weekly rate, it will see a total trading volume of around 273,000 ETH in its first year. That’s about $406 million today, or about 6.75% of GameStop’s $6.011 billion in net sales for fiscal 2021.

Of this volume, GameStop will take approximately 6,147 ETH in transaction fees (approximately $9.15 million), which is only approximately 0.15% of GameStop’s net sales for fiscal 2021 or 2.4%. from its $381 million loss for fiscal 2021. Even if HODL game stop all his ETH and cryptocurrency returns to its all-time high of around $4,800, and then that annualized transaction fee will be worth just $29.5 million (around 0.49% of net sales in fiscal 2021; 7.7% tax losses of 2021).

Earning tens of millions of dollars a year from a whole new line of business is no small feat, of course, especially when GameStop doesn’t have to worry about a lot of inventory or physical overhead to sell. NFTs. Still, it’s not the kind of profitable performance that will seriously impact a multi-billion dollar business in the long run.

However, this is still the start of GameStop’s NFT business, and the broader NFT market could still rebound from its current slump. Or perhaps the eventual integration of “web3 game” assets into the GameStop marketplace (which the retailer says will be added “over time”) will help it “consolidate itself as the ultimate destination in the new gaming paradigm,” as Immutable’s Robbie Ferguson suggested when announcement of a deal with GameStop in February.

For now, however, GameStop and its boosters will be watching and waiting for such a turnaround to occur. Until that happens, the GameStop NFT marketplace seems destined to be a relatively minor part of the international retailer’s business going forward.

Listing image by MetaBoy/GameStop NFT Marketplace

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