If you had to bet on the right horses for the NFT marketplace success, which one would you choose: an NFT marketplace launched by one of the world’s biggest crypto exchanges or one by an unprofitable video game retailer trying to find its purpose in the web3 world? 

If early-day figures are anything to go by, it's not really a debate: GameStop has already overtaken Coinbase's NFT platform, but also looks set to build on an early trading frenzy to carve out its own space in NFTs. The video game retailer's NFT platform reached $1 million in trading volume within 24 hours, and overtook Coinbase the following day, when it quickly rose past $3 million. Around $4 million has been traded on the platform since it launched three days ago.

MetaBoy, a collection of 10,000 animated and pixellated characters, is responsible for the early trading excitement, with over $1.3 million traded so far. Early trading frenzy saw the collection reach a floor price of 0.33 eth, though this has now cooled off across the platform, with the MetaBoy's floor falling to 0.15.

NFT trader Nicholas “Kix” Kneuper, who co-founded NFT game Crypto Raiders, tells Culture3 that he is optimistic about the GameStop NFT marketplace. “Doing $1 million in volume in the first 24 hours is significant. GameStop’s position in the marketplace presents a unique opportunity to onboard new users – especially gamers – to NFTs,” he said. (GameStop did not respond to Culture3’s request for comment.)

GameStop’s NFT marketplace was a long time coming. The company first signalled its interest in NFTs when it placed an ad in April 2021 for a security analyst skilled in “blockchain, NFTs, and crypto.” The company disclosed plans for an NFT marketplace in January 2022.

Although the marketplace's initial performance has been remarkable when compared to Coinbase, GameStop has other competitors in its sights. The lion’s share of NFT trading occurs on OpenSea, which accounts for 63% of all Ethereum trading volume – likely even more when wash-trading on LooksRare, incentivised by token rewards on the platform, is excluded.

Nonetheless, GameStop's NFT marketplace has several advantages. Built on the Layer 2 solution Loopring, GameStop's platform is cheaper and faster than OpenSea, which is built on the Ethereum mainnet (as well as other chains, like Solana), and augmented by protocols like Seaport, which the company adopted in June 2022.

By contrast, Loopring is one of the most efficient scaling solutions in the market. Network choice significantly impacts the user experience in terms of money spent on gas fees, as OpenSea's recent Seaport adoption demonstrates, which will save customers 35% on gas fees and eliminate setup fees for new users.

Beyond gas, GameStop takes a cut for itself of 2.25% on every NFT sale, no doubt priced to narrowly edge out OpenSea, which takes 2.5%, channelling Chris Dixon’s favourite phrase “your take rate is my opportunity”. Given the trading volume so far, the marketplace has already netted $90,000 in fees.

But Nicholas tells Culture3 that he doesn’t believe GameStop is a direct competitor to OpenSea. “I don't think they will try to compete with OpenSea, but rather leverage their existing consumer base and business relationships to create new NFT opportunities for the market.”Beyond gas, GameStop takes a cut for itself of 2.25% on every NFT sale, no doubt priced to narrowly edge out OpenSea, which takes 2.5%, channelling Chris Dixon’s favourite phrase “your take rate is my opportunity”. Given the trading volume so far, the marketplace has already netted $90,000 in fees.

But Nicholas tells Culture3 that he doesn’t believe GameStop is a direct competitor to web3's most established marketplace. “I don't think they will try to compete with OpenSea, but rather leverage their existing consumer base and business relationships to create new NFT opportunities for the market.”

GameStop’s customer base consists mainly of gamers, who are the obvious focus. Also in the minds of GameStop executives will be the retail traders and investors who propelled the company’s shares from $17 to around $500 in early 2021 with an attempted short squeeze – and likely played a role behind the NFT platform’s enormous initial success. The company's shares rose 22% on the news that an NFT platform was in the works, and in the run-up to the launch $GME has risen 15%, to $149.

GameStop is a natural fit for NFTs because many prominent NFT use-cases revolve around gaming, such as tokenising game skins. Turning game skins into NFTs lets players own them, even outside the gaming ecosystem within which they were bought, such as in other games, metaverses, and marketplaces. Several gaming companies have experimented with NFTs, but the space has proved difficult to navigate amidst backlashes from gamers resistant to monetisation by the back door, similar to the microtransactions and loot boxes that companies have introduced in the last decade.

“I don't think they will try to compete with OpenSea.”

— Nicholas Kneuper, co-founder of Crypto Raiders

But with its gaming heritage, GameStop finds itself in a unique position, trusted to pursue NFTs in a way that augments the experience of gamers, rather than simply trying to extract value. In that respect, the company has partnered with Immutable X, another Ethereum scaling solution designed specifically for NFT game assets. When integrated with Immutable X, the NFT marketplace will become gas-free and carbon-neutral, and the marketplace is already teasing 13 games planning to launch NFTs on the beta platform “soon”. 

These include crypto-enabled games such as Illuvium, Gods Unchained, and Guild of Guardians. Perhaps the hope is that one day GameStop NFT will be the go-to place for NFT game assets, having launched a crypto wallet earlier this year geared towards NFT investors. But at the same time, GameStop executives will not have forgotten the lessons of Twitch and Discord, which both built their products and brand for gamers, who proved to be a strong community and engaged customer base that helped both companies subsequently go mainstream and dominate their categories.

“GameStop’s position presents a unique opportunity to onboard new users to NFTs.”

— Nicholas Kneuper, co-founder of Crypto Raiders