GameStop to Abandon Crypto Efforts as Q3 Losses Approach $95M

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Gaming retailer GameStop said it would no longer focus its efforts on cryptocurrencies, after posting net losses of $94.7 million in the third quarter and laying off staff from its digital assets department.

In a Dec. 7 earnings call, GameStop CEO Matt Furlong said the video game retailer has proactively minimized cryptocurrency exposure over the year and currently only holds no hardware token balance, adding:

While we continue to believe there is long-term potential for digital assets in the gaming world, we do not and will not risk significant shareholder capital in this space.

The company said earlier this year that it is considering crypto, non-fungible tokens (NFTs), and Web3 applications as avenues for growth, calling these spaces “increasingly relevant for gamers of the future.”

Going forward, GameStop will focus on collectibles, games, and used items.

His movements in the NFT space always seem to be moving forward, as he says he is also chasing and planning[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 in its NFT marketplace but did not receive a response.

GameStop has pushed numerous Web3-related products, the most recent being its NFT Marketplace going live October 31 on ImmutableX, a layer-2 Ethereum blockchain, after a public beta launch in July.

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

It also partnered with now-bankrupt crypto exchange FTX US in September, with the aim of bringing more customers to crypto and working together on e-commerce and online marketing initiatives. He ended ties with the stock exchange on November 11, shortly after filing for bankruptcy.

GameStops’ third-quarter losses were down slightly from the second quarter, which saw losses of $108.7 million. It’s also a year-over-year improvement for GameStop, which posted a loss of $105.4 million in the third quarter of 2021.

Staff cuts reportedly hit crypto department

On December 5, GameStop laid off several employees in its third round of layoffs for 2022, as confirmed by Furlong during the earnings call.

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

Still, posts from employees and people claiming to be former employees have shed light on the layoffs. Daniel Williams, Chief Software Engineer at GameStop, wrote in a LinkedIn post on December 5:

Another big round of GameStop layoffs currently underway Producers and e-commerce engineers… Lots of them.

Related: Why Bots Dominate Crypto Gaming? Money-snatching developers trick 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, said he had a great time diving deep into Ethereum and learning many new things in the crypto space.

Me and the rest of the mobile team have been laid off, wrote former developer Christopher Fields.

In July, the company fired its chief financial officer, Michael Recupero, and a number of employees from its video game-focused magazine Game Informer.

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