Video game retailer GameStop Corp. (NYSE: GME) recently announced the launch of its Non-Fungible Token (NFT) marketplace.
Following the news, shares of the company gained almost 2% to close at $131 in yesterday’s extended trade.
GameStop’s NFT Marketplace Will Be Based on Ethereum
GameStop’s NFT marketplace is a non-custodial, Ethereum Layer 2-based marketplace. This will allow the buyers and sellers to own their digital assets with the security of the blockchain.
Notably, the marketplace will allow gamers, creators, collectors, and other community members to transact in NFTs. Further, the marketplace can be accessed from nft.gamestop.com and will allow users to connect their digital wallet assets.
Meanwhile, the company announced that it will look to broaden the functionality of the marketplace by incorporating additional categories such as Web3 gaming and other Ethereum environments.
What Are Analysts Thinking About GameStop Stock?
Consensus among analysts is a Moderate Sell based on one Hold and one Sell. The GME average price target of $70 implies downside potential of 46.2% from current levels. Shares have declined 31.3% over the past year.
Declining Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into GameStop’s performance this quarter.
According to the tool, the GameStop website recorded a 17.48% monthly fall in global visits in June, compared to the same period last year. Moreover, year-to-date, GameStop website traffic decreased by 24.19%, compared to the previous year.
GameStop’s declining website traffic alludes to the fact that the company’s current product offerings are not attracting customers. In such a situation, its NFT marketplace can be expected to drive some traffic to the website.
GameStop has been struggling with its stock price declining steadily. To address the same, the company’s move to launch its own NFT marketplace seems like a strategic move to arrest this decline. However, the company needs to prudently manage the same and launch products in the marketplace that can drive volume, ensuring revenue visibility and profitability in the future.
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