The price of GameStop stock is rising nearly 2% this morning in pre-market stock trading action following news that the company is launching a wallet for both cryptocurrencies and non-fungible tokens (NFTs) as part of its continuous effort to capitalize on the rise of the so-called web 3.0.

According to the company’s official press release, the product is called the GameStop Wallet – a self-custodial Ethereum-based wallet.

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GameStop (GME) price chart – Source: TradingView

Users will be able to download it in the Chrome Web Store and it will allow them to make transactions within the GameStop NFT marketplace – a service that is expected to be launched during the second quarter of the current fiscal year.

GameStop has been working on blockchain projects for a while now and it has assembled a team of around 20 people to assemble its marketplace for NFTs. This is the latest effort from the company to revive its decaying business model that relies primarily on the sale of both new and used videogames at a time when most gamers use cloud-based platforms.

On 3 February this year, the company announced that it partnered with Immutable X to power this marketplace. Immutable X is a layer-2 protocol that enables zero-fee NFT transactions within the Ethereum network.

Elevated gas fees and network congestion are some of the most common concerns that users have when transacting with non-fungible tokens on the Ethereum blockchain. By partnering with Immutable X, GameStop is seeking to get rid of those objections to attract millions to a platform that may eventually partner with top videogame developers to offer NFTs for their respective experiences.

In addition, GameStop might be aiming to capitalize on the up-and-coming metaverse industry by creating a go-to marketplace in which digital assets can be easily bought and sold to be used on these platforms.

Can Web 3.0 Change the Faith of GameStop?

GameStop’s sales have been on a downturn for many years now as the company has failed to modify its business model to capitalize on the rise of cloud-based gaming.

However, the company caught a lucky break in 2021 when its equity became a “meme stock”, with retail investors piling into it to squeeze short sellers. Back then, the stock surged to all-time highs and made many individual investors overnight millionaires.

The management team took advantage of the situation and raised capital via at-the-market stock offerings and paid off a large portion of the firm’s debt. By the end of January 29 this year, GameStop had total cash and equivalents of $1.27 billion and a meager long-term debt of $40.5 million.

As a result, the company is now better positioned to turn around its business. The management has focused most of its efforts on the web 3.0. The success of the business in the future will largely depend on whether these efforts pay off or not. Last year, the company burned $434.3 in cash million as net losses accelerated as a percentage of sales due to higher operating expenditures related to these initiatives.

What Does the Future Hold for GameStop Stock?

According to predictions from Wallet Investor, the price of GameStop (GME) stock is expected to rise both in the near and mid-term. For June 2022, the baseline forecast from this service is standing at $104 per share resulting in a 9.2% upside potential.

Meanwhile, for December 2022, the algorithm is predicting that the price will rise to a range between $122.9 and $124.9 per share resulting in a 30% upside potential based on last Friday’s closing price.

So far this year, GameStop stocks have lost almost 36% of their value while they are trading 72.2% below their 52-week high and 38% below their 200-day simple moving average.

Your capital is at risk.