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Congratulations if you spotted the Easter eggs in GameStop's job advertisements. Turns out the video game retailer really is getting into crypto.
GameStop has created a new unit for building an NFT platform and hired more than 20 people thus far to run it, according to a report today from The Wall Street Journal. The platform will allow customers to buy, sell and trade NFTs of video game items, such as clothes and weapons for player avatars. The company had previously placed ads looking for engineers and others for the team.
GameStop (GME) stock duly surged 31% in after-hours trading to reach $170, its highest price in nearly a month.
Prominent video game publishers such as Ubisoft have begun incorporating NFTs—blockchain-based deeds of ownership for digital items—into their titles. In-game NFTs open up the possibility of games becoming interoperable and players profiting from trading rare items.
Rumors have been percolating for almost a year that GameStop would jump into the NFT sphere. An April 2021 job posting on its website sought an analyst with knowledge of crypto, blockchain and NFTs. In May, a landing page for the company confirmed it was looking for "exceptional engineers (solidity, react, python), designers, gamers, marketers, and community leaders" to come aboard an Ethereum NFT project. And Loopring's token price tripled in November on speculation that it would be involved in the marketplace.
Today's news gives GME stock another boost as it hops aboard a multi-billion dollar trend. Reddit-based day traders promoted GME as a meme stock last January, rallying the price from a middling $20 per share to $483 at one point. It's since come down from those highs but has used the increased interest and capital to innovate.
But it will run headlong into antipathy toward NFTs from many gamers. Ubisoft's NFT launch was threatened by a revolt from players, many of whom argue that blockchain technology threatens the environment (though not all chains are energy-intensive) or bear hard feelings from supply chain issues that cost the price of graphics cards—also used for crypto mining—to rise exponentially.
GameStop clearly thinks it's worth the risk as the company looks to reverse several years of losses.