In a stunning turn of events when compared to where it was just a few years ago, the traditionalist faction running video game retailer GameStop appears to be winning out over online and meme shareholders as the company plans to shutter its NFT marketplace next month. The news is not too much of a shocker for a few reasons. First, GameStop closed down its NFT wallet program approximately four months ago, and cited "regulatory uncertainty" as the primary reason for doing so. Those were the primary reasons they shared for shutting down their entire NFT marketplace as well, but the absolute cratering of the NFT market did not help either. dappGambl did an expose looking at all major NFT marketplaces and owners and found that "23 million people held worthless investments." As they state in their report and research:

Data from the Block reveals a weekly traded value of around $80 million in July 2023, just 3% of its peak back in August 2021. So what happened?

NFTs had a bull run then crashed. Hard.

Of the 73,257 NFT collections we identified, an eye-watering 69,795 of them have a market cap of 0 Ether (ETH).

This statistic effectively means that 95% of people holding NFT collections are currently holding onto worthless investments. Having looked into those figures, we would estimate that 95% to include over 23 million people who’s investments are now worthless.

Now, I hinted earlier that GameStop pivoting away from NFTs was a slight surprise considering what was happening to the company in 2021 wherein amateur traders from Reddit organized a short squeeze on the company using the Robinhood stock trading app and even started to influence decision-making in the company when some invested in voting shares. This fiasco was not exclusive to GameStop and led to the growing ubiquity of the term "meme stock" or "stonks." While GameStop's situation was eventually the subject a book and movie adaptation titled "Dumb Money," it is important to note most of the people that attempted to make investments based on Reddit's WallStreetBets subreddit lost money.

Nonetheless, with the decision to axe the NFT Marketplace GameStop does not appear to be in a great situation. 2023 marked a continuing trend in which they reported declining revenues and their board took the extreme measure of firing the previous CEO of the company. Are GameStop's days numbered?

I dunno, does 0 count as a number?

Gamestop has failed to present a reason why it should continue to exist. It intentionally modeled itself as a mall based store that was as bland and corporate as possible. It intentionally drove out any employee who wanted to create a good shopping experience instead of pushing worthless insurance products or other garbage on customers. It was always a vaguely unpleasant place to shop but a necessary evil for people without local game stores in their area who just wanted to pick up games. And of course they had their notorious trade in practices.

Now physical games are on the decline, malls are dying, the Internet has enabled more person to person sales of used items so trade ins have less value, and the only people who care about Gamestop at all are former mall rats who are more nostalgic for that time in their lives than anything else.

The NFT marketplace was just another attempt to create an actual business model, just like the pivot to Funko Pops (as if we need a Funko Pop store in every dying mall in America) and every other attempt to reimagine the model.

To some extent Gamestop's decline was inevitable. Blockbuster and Tower Records both collapsed for similar reasons. There's room for local shops or perhaps small chains in these legacy media spaces (trade in shops that deal in retro and specialty stuff seem to be doing okay) but no massive, sprawling, empires. On the other hand Gamestop did itself no favors by positioning itself as a disposable, often unpleasant, experience. They never built customer loyalty and the customers left as soon as they could.

Personally I have 0 nostalgia for Gamestop. I feel for the employees losing jobs, of course, but my local Gamestop closed years ago and I hadn't visited it for years before. I used to have a local game store about a quarter mile further away than that Gamestop and even as a kid or teen I would always go there to buy games. Gamestop just felt sterile and off putting and I hated the hard sell you'd get whenever you went in to pick something up.

As for NFTs, I mean, I'm not surprised they collapsed but I am a bit more surprised that crypto is still going strong even though the difference between the two is minimal. I guess NFTs were less useful for ransomeware and other crimes.

With talks of stores potentially ditching physical media, maybe they can carve out some niche market as the last place selling physical media. But is that a market that's going to satisfy Gamestop's financial overlords? Probably not. They'll probably just find a way to blow whatever money's left on A.I. or whatever the next buzzword's going to be until the company is finally driven into the ground by current society's clueless management class that has continued to prove that couldn't manage a plastic bag off their own heads if their lives depended on it.

@brian_: Maybe a niche, but the problem is that Gamestop is not scaled as a niche operation. Also physical is going either online or specialty (meaning from local stores with people who know games and generally do used games over a bunch of generations.)

I think it's too late to save Gamestop. There might have been a time to do it ten years ago when it became obvious where things were going, but now? Maybe it will survive in some way in a scaled back version.

@bigsocrates: Oh yeah. That's what I mean. Unless they hit upon some miracle, unforeseen goldmine, it's way too late for GameStop to be anything other than massively scaled back or completely defunct. And I'm guessing the moneymen in charge probably don't have much interest in running a scaled back operation. Maybe they sell it off to someone who would. But I'm guessing they just let it die.