GameStop to drop crypto efforts as Q3 losses near $95M

December 9, 2022 Coin Telegraph

GameStop to drop crypto efforts as Q3 losses near M

The gaming company has stopped its cryptocurrency-related focuses but is seemingly still pushing ahead with its NFT and blockchain plans.

Gaming retailer GameStop says it will no longer focus any efforts on cryptocurrencies, after amounting $94.7 million in net losses in the third quarter and laying off staff from its digital assets department.

On a Dec. 7 earnings call GameStop CEO, Matt Furlong, said it “proactively minimized exposure to cryptocurrency” over the year and “does not currently hold a material balance of any token,” adding:

“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.”

Earlier this year the company said it was looking at crypto, along with nonfungible tokens (NFTs) and Web3 applications, as avenues for growth calling these spaces "increasingly relevant for gamers of the future."

Going forward it will shift focus to collectibles, gaming and pre-owned items.

Its moves in the NFT space are still seemingly going ahead as it says its “also pursuing, and plan to continue to pursue, other business and strategic initiatives associated with digital assets and blockchain technology,” according to a Dec. 7 filing with the Securities and Exchange Commission (SEC).

Cointelegraph contacted GameStop to confirm that it would continue efforts on its NFT marketplace but did not receive a response.

GameStop has pushed numerous Web3-related products, the most recent being its NFT marketplace that went live on ImmutableX, an Ethereum layer-2 blockchain, on Oct. 31 following a July public beta.

Prior to its NFT marketplace, in May the company launched a beta self-custody crypto wallet and beta NFT marketplace on Loopring in March, Loopring is another Ethereum-based layer-2 protocol.

It also partnered with the now bankrupt crypto exchange FTX US in September aimed at bringing more customers to crypto and working together on e-commerce and online marketing initiatives. It ended ties with the exchange on Nov. 11 soon after it filed for bankruptcy.

It’s Q3 losses slightly narrowed compared to the second quarter however, which saw losses of $108.7 million. It’s also a year-on-year improvement for GameStop, which posted a $105.4 million loss in Q3 2021.

Staff cuts reportedly hit crypto department

On Dec. 5 GameStop cut multiple staff in its third round of layoffs for 2022 which Furlong confirmed in the earnings call.

Earlier reports suggested that the team working on the company's blockchain and NFT projects was the most impacted, however, Furlong did not specify where the staff cuts were concentrated during the call.

Earlier posts from people claiming to be former employees have shed some light. Daniel Williams, lead software engineer at GameStop wrote in a Dec. 5 LinkedIn post:

“Another big round of layoffs from GameStop currently in progress… E-commerce Product and Engineers... Lots of them.”

Other posts from those claiming to be affected by the cuts also appeared on LinkedIn at the time. Brandon Jenniges, a former iOS and blockchain engineer posted he “had a great time getting a deep dive into Ethereum and learning about many new things in the crypto space.”

“I and the rest of the mobile team were let go,” wrote former developer Christopher Fields.

In July, the company terminated its CFO Michael Recupero and a number of staff at its video game-focused magazine Game Informer.

Data From October Shows Gold Reserves Held by Central Banks Tapped the Highest Level in 47 Years

December 7, 2022 Bitcoin.com

Solana-Based Lending App Solend Gets Hacked for $1.26 Million in ‘Oracle Attack’

November 2, 2022 Bitcoin.com

Central Bank Gold Buys This Year Reach an All-Time Quarterly High in Q3, 400 Tons Purchased Is the ‘Most on Record’

November 2, 2022 Bitcoin.com

Metaverse losses top $3.6B for Meta with spending set to increase

October 27, 2022 Coin Telegraph

Metaverse losses top .6B for Meta with spending set to increase

Big Tech

The tech giant is just over $500 million away from topping its more than $10 billion Metaverse department losses in 2021, but it said its spending will only grow next year.

Big Five technology player Meta is still burning cash through its Metaverse research and development arm Reality Labs with a $3.67 billion loss posted for the third quarter of 2022, stating those losses will further deepen next year.

The company’s Q3 2022 earnings released on Oct. 26 show the biggest-ever quarterly losses for Reality Labs from earnings dating back to the fourth quarter of 2020, the business also made $285 million in revenue for the third quarter, its lowest on record within that time.

With its Reality Labs business marking its third straight quarterly loss totaling $9.44 billion so far in 2022, Meta is shaping up to beat its 2021 losses on its metaverse play which saw just over $10 billion in losses last year.

Those year-on-year losses are set to deepen as Meta CFO Dave Whener stated in the earnings:

“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year. Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”

On Meta’s earnings call, CEO Mark Zuckerberg continued to be unfazed by the company’s big investment in what he called the “next computing platform.” He said it was the firm’s top priority and told investors that building a Metaverse and its related hardware is “a massive undertaking.”

“It's often going to take a few versions of each product before they become mainstream,” he added. “I think that our work here is going to be of historical importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives as well as the foundation for the long term of our business.”

Overall the company slightly exceeded its revenue expectations from Wall Street analysts, bringing in $27.71 billion in revenue for the quarter but bought in $1.64 earnings per share, missing its estimate of $1.88 per share.

Meta’s stock price has fallen over 19.5% in after-hours trading at the time of writing according to Yahoo Finance with the company’s shares down over 61.5% since the start of 2022.

Meta’s big bet on its virtual world has some investors urging the firm to scale back its investment, with Brad Gerstner, founder of technology investment firm Altimeter Capital and Meta shareholder penning an open letter to Zuckerberg and the board of directors.

Gerstner said its “investment in an unknown future is super-sized and terrifying” and that it could take a decade for its Metaverse to start making a profit, he said the firm should focus on an artificial intelligence offering as it has the potential to better the company’s results.

Some are not optimistic about the future of the Metaverse in the hands of Zuckerberg, Meta whistleblower Frances Haugen in April said its virtual world will repeat “all the harms of Facebook” if the company doesn’t commit to transparency.

q3 2022