Farewell to GameStop NFT Marketplace: A Victim of Regulatory Ambiguities

• In July 2022 GameStop partnered with ImmutableX to launch an ecosystem allowing players to earn via gameplay and interact with unique features.
• On Jan 2024, 18 months after its launch, Gamestop warned its users that it would phase out its NFT marketplace next month due to regulatory uncertainty.
• On August 2023, the organization announced that it would discontinue iOS and Chrome extension Wallet access.

The web3 industry has various main branches that have extended the reach of blockchain-based applications. They include the crypto market, the NFT marketplace, the metaverse, and Decentralized applications. Unfortunately, the 2022 crypto crash severely affected most of the web3 industry.

Its effects rippled throughout the industry, forcing many to rethink their stance on decentralized applications. Amid this chaos, NFT marketplaces faced the worst backlash of them all. With crypto prices tanking, many NFT artists had no choice but to either increase their art prices or significantly lower them to lure in more collectors.

Either option was a desperate attempt at salvaging their efforts. Soon enough, a trend emerged referred to as NFT Phasing out. The value of most marketplaces dropped exponentially, causing many to abandon digital artwork and look into other alternatives.

Unfortunately, despite the recent crypto revival, NFT phasing out has persisted. In recent developments, the GameStop NFT marketplace has announced its imminent shutdown following the regulatory uncertainty on cryptocurrency from the US SEC. This announcement has sent ripples across the industry, further creating a more definite answer for NFT phasing out.

GameStop ventures into the web3 franchise

In July 2022, Gamestop finally ventured into the web3 space by launching its own NFT marketplace. At the time, the collaboration between the gaming industry and the market proved beneficial, allowing both entities to benefit from their vast network. This led to the rise of web3 games, which incorporate NFT technology for game characters, tokens, and other new features.

The GameStop NFT marketplace was no different; it merely took another approach. To accomplish this feat, the video game retail giant partners with ImmutableX to launch an ecosystem allowing players to earn via gameplay and interact with unique features. Soon enough, the world took notice of the GameStop NFT marketplace for its unique approach and strategy of exploiting its existing distributed network.

Also, Read Africa’s NFT Gaming Rise: Ninja Game Guild-SYNCTHESIS Collaboration and SYNCFit Venture

GameStop already had a massive customer base; thus, shifting to a new platform proved simpler than most startups. In its launch, the video game retail shop took advantage of this hack, enabling significant sales volume to outpace crypto titans like Coinbase. Its fame gradually grew, and so did its strategic partnerships. GameStop NFT Marketplace kickstarted its journey by introducing explainer videos, allied products, and community initiatives that aided in its market.

GameStop partnered with Immutable to launch an NFT marketplace in July 2022.[Photo/medium]

In addition, the GameStop NFT marketplace presented new features to gamers previously unavailable. For instance, one of its explainer videos was a “How-To” video showcasing how the player could connect their digital wallets to Gamestop NFT, giving access to its unique access to its collections. Aside from this, the NFT platform also provides a native wallet offering on-amping functionalities, allowing it to perform free fiat-currency-to-Ethe conversions without the complexities of using an exchange. 

To also cater to new web3-informed users, the platform offers 100% gas-free and carbon-neutral minting services. 

Unfortunately, the launch soon faced numerous hurdles after the FTX crash. The NFT phasing out period significantly slowed its sales, forcing many investors to abandon it.

GameStop NFT marketplace set to shut down.

On Jan 2024, 18 months after its launch, Gamestop warned its users that it would phase out its NFT marketplace next month due to regulatory uncertainty. According to the official website, “Effective as of February 2, 2024, customers will no longer be able to buy, sell or create NFTs. Your NFTs are on the blockchain and will remain accessible and saleable through other platforms. GameStop has decided to wind down our NFT marketplace due to the continuing regulatory uncertainty of the crypto space.”

GameStop’s main base of operation is the United States. The region has faced intense regulatory uncertainty for the past year, especially with the US SEC gunning down any suspicious activity within the market. Unfortunately, the US SEC has still failed to clarify the region’s crypto market, forcing many organizations to flee. After raining down fire on the top three crypto exchanges, many underdog crypto-based businesses have been forced to shut down or expand their services to buyers. 

This announcement comes after Gamestop indicated it would move away from the crypto sphere after suffering losses caused by the 2022 crypto crash. According to the official announcement, Gamestop experiences a $94.7 million net loss, forcing the organization to lay off its staff.

In addition, on August 2023, the gaming retail organization urged its customers to secure access to their “Secret PassPhrase.” The organization had announced that it would discontinue iOS and Chrome extension Wallet access. Unfortunately, the regulatory uncertainty in the US has taken a toll on its web3 community.

Despite the US SEC approving the 11 Bitcoin Spot ETF Proposals, the year-long damage still looms over the region. GameStop CEO Matt Furlong still contends that the company should interact with the crypto sphere but will not risk investor funds. In a last comment, Matt Furlong said, “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.“

Also, Read Zebedee Fintech ventures into the African crypto gaming industry.

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• Source: https://web3africa.news/2024/01/19/news/gamestop-nft-marketplace-shut-down/