GameStop Ends NFT Marketplace Due to Regulatory Challenges of Crypto Assets

In an advanced communication, the American-based video game studio GameStop has revealed plans to sunset its non-fungible token (NFT) arm. The GameStop report demonstrated that the decision to wind down its NFT operation stemmed from a lack of comprehensive regulations for digital assets.

Since last year, the regulators have shifted their focus on the crypto industry to shield the customers from exploitative business activities.

GameStop Set to Terminate Crypto Games Initiatives

The ongoing regulatory scrutiny of the crypto sector has forced industry players to flee the US to offshore markets. In a December 12 blog post, GameStop underlined that its NFT marketplace will no longer be available.

The gaming company plans to sunset the NFT marketplace on February 2 2024. This demonstrated that GameStop will be joining strings of companies seeking to end their NFT offering.

Late last year, the GameStop team suspended the operation of its NFT wallet due to regulatory uncertainty in the crypto sector.

Initially, the GameStop team introduced the NFT and collectable features in 2022 to boost the gaming experience. However, the efforts made by GameStop to support the growth of the game sector became futile shortly after the US Securities and Exchange (SEC) took enforcement actions against the digital industry.

Regulatory Uncertainties in the Crypto Industry

The regulatory action taken by the SEC hindered the growth of the NFT sector. The loss of NFT steam compelled the GameStop team to take decisive action and pull back from the crypto-related initiatives.

The report illustrated that the GameStop NFT division has operated for nearly two years. Months after launching the NFT project, the Gamestop team regretted that its digital assets initiative failed to attain the desired objective.

After intense efforts to support NFT’s growth, Gamestop teamed up with fast-paced gaming companies, including Immutable. At this time, Immutable and GameStop agreed to establish a $100 million fund for game developers.

The partnership enabled Gamestop to list Immutable on its NFT marketplace. Months after the launching NFT marketplace the GameStop failed to generated considerable returns from crypto investmets. This forced the gaming company to engage in multiple headcount reduction.

Major Layoffs in Crypto Gaming Industry

The GameStop downsizing impacted the dismissal of the chief executive Matt Furlong and other team players behind the NFT project. Since then, the GameStop team has engaged in multiple layoffs to sustain the business operations.

The layoffs impacted the dismissal of product developers and engineers who joined the GameStop team for nearly decades. Besides the layoff, GameStop changed its organizational structure and returned former CEO Ryan Cohen to the board chair role.

In an earlier report, the GameStop spokesperson confirmed that the company’s resizing efforts aimed at supporting the firm to maximize profits and stimulate business growth. According to DappRadar, GameStop’s trading volume reached $29 million as of October 2023. The report indicated that the GameStop marketplace has around 24,000 active traders.

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