GameStop Membership Rewards Up, But Stock Down as Investors Question Future

GameStop’s stock GME dipped about 10% in pre-market trading Friday (March 18), less than a day after the company announced its fiscal 2021 fourth-quarter and yearly earnings, which were highlighted by a 32% year-over-year growth in its subscription-based membership program, PowerUp Rewards Pro, in Q4.

GameStop, which has seen its stock drop about 55% in the past six months, trumpeted the growth of PowerUp Rewards Pro year over year to 5.8 million members for the three-month period that ended Jan. 29, according to a company press release Thursday (March 17).

PowerUp Rewards Pro members pay $14.99 for an annual membership and get an instant $10 reward that can be used the next time they shop for games and accessories; $5 monthly rewards; 2% in rewards on every dollar they spend (twice what non-Pro members get); early access on console releases; graphics cards, collectibles and more; and a subscription to Game Informer magazine.

Also as part of its FY21 quarterly and full-year earnings call, GameStop announced that it will launch a marketplace for non-fungible tokens (NFTs) by the end of July to close out the first half of fiscal 2022.

In FY 21 Q4, GameStop generated net sales of $2.254 billion, up from $2.122 billion in the fourth quarter of 2020 and $2.194 billion in the fourth quarter of 2019. For the full fiscal year, GameStop had net sales of $6.011 billion, up from $5.090 billion in fiscal year 2020.

GameStop also partnered with PC gaming companies Alienware, Corsair and Lenovo and Australian blockchain startup Immutable X that will be the backbone of its NFT marketplace and is expected to generate up to $150 million in IMX tokens when it comes to fruition.

Earlier in the fiscal year, GameStop opened new offices in Seattle and Boston.

Related: Is GameStop’s New NFT Marketplace Diversification or Distraction?

As part of its collaboration with GameStop, Immutable X will become a layer-2 partner and platform for GameStop and its NFT marketplace, which is likely to launch later this year.

GameStop hired more than 20 people to run its new NFT- and cryptocurrency-related division. Activist investor Ryan Cohen, who was named GameStop chairman in June, has said the company must become more tech-centric and has vowed to make that happen.

Immutable debuted late in 2017. It has 152 employees, Co-founder and President Robbie Ferguson told The Wall Street Journal earlier this year, adding that the company has raised around $85 million in funding.