The sports retailer Fanatics has abandoned NFTs and is selling its majority stake in Candy Digital.
The firm aims to sell its 60% ownership in Candy in order to prevent what Fanatics Executive Chairman Michael Rubin described as a “imploding NFT market,” according to an internal email viewed by CNBC on Wednesday.
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a separate business,” Rubin wrote. “In addition to physical collectibles (trading cards), which account for 99% of the company’s revenue, we believe digital solutions will have higher value and use when linked to genuine collectibles to provide the best collector experience.”
Fanatics, which was recently valued at $31 billion, announced the introduction of Candy Digital in 2021 to authenticate sports memorabilia and, as a result, validate values.
Candy is a “next-generation digital collectibles firm that brings together world-class digital artists, designers, and developers to generate a broad spectrum of official NFTs,” according to the company.
The NFT industry’s monthly expenditure on digital products as “stark and financially punishing” late last month, with monthly spending on digital offerings falling by 87% to $442 million in November.
At the same time, the number of “minted” NFTs has fallen by 60%, and the volume of active buyers and sellers is one-third of what it was at the beginning of the year.
Nonetheless, NFT supporters continue to fight for their future. In a December interview with the Financial Times, OpenSea CEO Devin Finzler stated that he believes people would continue to spend money on digital photographs to display in virtual environments or at home.
