GameStop abruptly cancels its crypto wallet

Gaming
GameStop abruptly cancels its crypto wallet

GameStop’s foray into the NFT space has taken another hit as it announces the discontinuation of its crypto wallet, which was launched in May 2022. The video game retailer cited “regulatory uncertainty of the crypto space” as the primary reason for the decision.

GameStop web3 wallet halted

The news was delivered through a pop-up message on the company’s NFT marketplace. Support for the wallet, available via Chrome web browser extension and iOS mobile app, will officially end on November 1, prompting users to back up their wallet’s secret passphrase by October 1.

The move comes amidst recent developments in the crypto industry, notably the United States Securities and Exchange Commission’s (SEC) increase in enforcement actions under Chair Gary Gensler’s leadership. Major exchanges Coinbase and Binance have faced legal suits, and this “regulatory uncertainty” has been a recurring explanation for various companies’ drawdown or abandonment of digital asset initiatives.

Pushing for NFTs despite lack of interest by gamers

GameStop’s CEO Matt Furlong was at the helm during the wallet and marketplace launch, as well as the partnership with Ethereum scaling network Immutable X, which featured a $100 million incentives fund for developers.

Before his departure last June, Furlong had already signaled GameStop’s shift away from NFTs and crypto during a December 2022 earnings call, stating the company would not risk significant stockholder capital in the crypto industry.

Not an easy time for GameStop and NFT gaming

The struggles with NFTs and crypto are only part of GameStop’s challenges. The company continues to operate over 4,400 physical stores globally, but it has faced multiple rounds of layoffs in recent years due to the gaming industry’s shift toward digital delivery. What helped keep the firm alive was the tumultuous “meme stock” craze in early 2021, resulting in unprecedented upwards price action for its stock.

GameStop’s move away from NFTs also included laying off crypto wallet engineers in December 2022, aligning with Furlong’s announcement that the company was diverting its focus from the NFT space.

As the NFT market faces challenges, other gaming companies and crypto projects may also have to reevaluate their strategies in light of the SEC’s heightened regulatory actions.

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