GameStop’s (GME) – Get GameStop Corporation Report NFT (non-fungible token) marketplace has been live in its beta version since July 11. The platform was launched through a partnership with Immutable X and promises users the ability to trade in-game assets via blockchain tokens on the Ethereum (~ETHUSD) platform.
In its first 48 hours, the platform recorded more trading volume than Coinbase’s (COIN) – Get Coinbase Global Inc Report NFT marketplace. This has motivated GameStop investors and helped the stock rally.
Here’s what you need to know.
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An Exciting Start
Since its launch, GameStop’s NFT marketplace has shown some exciting stats. In its first few days, it averaged $1.1 million in total daily trading. In its first week, the platform had already accounted for over 5,254 ETH in total trading volume.
This is almost twice as much as Coinbase’s NFT marketplace, which has been live since May.
By comparison, Coinbase users have so far traded 1,913 ETH, which equates to about $2.8 million, according to Dune Analytics. But unlike GameStop’s NFT marketplace, Coinbase does not charge transaction fees to trade NFTs.
GameStop charges a 2.25% fee on all NFT trades, which so far represents a daily average of $25,113 — or 16.9 ETH — in direct revenue for the company.
And of all the 300 collections available on the platform, Ars Technica indicates that only six have accounted for the majority of trading volume so far.
It’s possible to attribute the platform’s early success to the loyal support of GameStop’s shareholders. The hype surrounding the launch was enormous on Reddit and other social media platforms.
Since the launch of the NFT marketplace on July 11, GameStop shares have already risen more than 16%. Of course, the platform can’t take all the credit: News that GameStop will split its stock on July 21 also helped the stock rally.
But clearly, GameStop investor sentiment is on the rise.
The NFT Market Is Proving to Be Resilient
On the bright side, the overall NFT market has proved resilient in response to bearish trends in the crypto market. Ethereum has plummeted more than 60% since the beginning of the first quarter. Yet the market cap value of NFTs grew from May to June.
When we look at the annual performance of NFTs, we see the numbers are quite positive. Trading volume and sales increased by 533% and 59%, respectively, compared to the same period last year.
A Threat to OpenSea?
Currently, the largest NFT marketplace is OpenSea. Data from earlier this year indicated that the company held about 80% of the NFT market share and had about 1 million users by 2022.
Reports from early 2022 indicate that OpenSea generated about $2 billion in trading volume in January, with an average daily trading volume of an impressive $260 million.
But the latest data provided by DappRadar shows that, in the last 30 days, OpenSea saw a trading volume of $497.6 million, a considerable drop.
Back in 2021, the company generated revenues of $365 million. OpenSea charges a fee of 2.5% per trade, which is slightly higher than GameStop’s NFT marketplace. With this, OpenSea’s market cap value was estimated to be around $13 billion early in 2022.
According to Ars Technica research, considering the current weekly volume of GameStop’s NFT marketplace, we will see a trading volume of about 273,000 ETH in the first year. That would yield about $406 million today — about 6.7% of GameStop’s $6 billion in net sales registered in 2021. These numbers would not even beat OpenSea’s June trading volume this year.
Even assuming ETH hits an all-time high of $4,800 again, the annualized transaction fees will still be $29.5 million, a tiny percentage of GameStop’s 2021 net sales.
Thus, GameStop investors should be aware that the NFT marketplace is an initiative to generate revenues in the long term. Don’t expect the business to become a revenue powerhouse right away.
However, obviously, you should consider that GameStop’s NFT marketplace has just been launched and is still in its beta version. OpenSea has been around since December 2017.
GameStop’s management has much bigger plans for the NFT marketplace, including the GameStop Wallet, the increasing the range of Web 3.0 in gaming, and an expansion into digital markets with a long-term view.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)
Read more: Gamestop is an nft platform – Krypto-NFTs