NFTs and the blockchain were supposed to take GameStop to the moon. Now the flagging video game retailer is dropping support for its crypto wallet as the Securities and Exchange Commission threatens to crackdown on the burgeoning nexus of finance, tech, and online gambling. It’s the latest high-profile misfire for the company, and even some of the most devoted “GME” meme stock boosters are getting worried.
GameStop reported losses of $50 million in June and canceled its earnings call. It fired its CEO Matt Furlong the same day. Chief financial officer Diana Saadeh-Jajeh announced her resignation at the end of July, only a year after her predecessor had been fired. Neither have replacements lined up, and meanwhile conditions at stores continue to worsen while the stock price is down 45 percent year-over-year. Backing off crypto is just the cherry on top for a shit sundae of bad headlines.
“Due to the regulatory uncertainty of the crypto space, GameStop has decided to remove its iOS and Chrome Extension wallets from the market on November 1, 2023,” the company wrote in a notice posted on its website. Customers who have their passphrase can use it to transfer their account to a separate crypto wallet like MetaMask. The GameStop NFT marketplace will still exist, but it’s getting out of the game of being a one-stop shop for crypto dealing and other Web 3.0 buffoonery.
The wallet was launched back in May 2022 to make it easier for GameStop customers to buy and sell NFTs and various crypto currencies through their mobile and PC web browsers. But by December of that year, then-CEO Matt Furlong was already telling investors that it had “proactively minimized exposure to cryptocurrency risk” and would not “risk meaningful stockholder capital in the space.”
GameStop meme stock fans across communities like r/GME and r/SuperStonk often spoke about the company’s initial crypto pivot as the start of a master plan to remake the Funko Pop! seller into the next tech giant by becoming the Steam of blockchain games. “This is your chance to buy Motorola in 1985, Microsoft in 1994, Apple in 1995, Google in 2000, or hell Coca-Cola in 1920,” wrote a commenter beneath one of the many bullish “due diligence” posts on Reddit hyping up the company’s prospects. In March of this year, GameStop confirmed NFT marketplace sales failed to constitute a “material” part of its annual earnings.
Some devotees are trying to spin GameStop walking away from the wallet as both smart and inconsequential, but not everyone’s buying it. “The wallet being released, especially on IOS, was one of the major things that people were waiting for,” wrote 2xBAKEDPOTOOOOOOOO on r/SuperStonk. “Now all of a sudden the wallet being removed from everywhere is even better!”
Others chimed in on a thread explaining why the move wasn’t a big deal with uncharacteristic concern. “I think spinning this as good news because it’s negative press is insane,” wrote tomsrobots. “GameStop spent real resources developing this wallet and now it’s being discontinued. We can go ahead and point fingers at the SEC for causing this, but that’s not good news either.” “OG ape here,” wrote manaf. “I don’t like the decision making. Either the wallet was needed or not. Saying it was needed, developing it, only to scrap it a year or so after, honestly doesn’t inspire confidence.”
The 2021 explosion in GameStop’s meme stock value bought it time and a huge warchest, but two years later the company looks as adrift as ever. Digital game sales continue to grow even as the company’s other initiatives—become Amazon for games, sell TVs, get into the wholesale PC accessory business—have all stalled or fizzled out. Chairman Ryan Cohen, who many still believe can deliver the Snydercut-style redemption of GameStop, has little to show for his financial takeover in the meantime except a bunch of tweets. Remind you of anyone else?