Level 11: Are retro games an investment?

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Investment and speculation are common themes in the retro community,  but how much of an investment are these games actually?

Anyone who’s been around the retro collecting scene for a while has probably read more than a few forum threads, etc about buying games as an investment, but how viable are retro games as commodity that will give a solid return for what you’ve initially invested in them?

The main thing about investments is to remember is: is this something that will grow enough in value to be something that someone in the future will buy for a higher price? People play the stock market because stocks and portfolios can grow and create wealth, but is this something that translates to the retro game market? 

What exactly are you investing in? These are old games who’s sole value is determined by supply and demand, being a finite resource because there’s a limited remaining amount of these games this creates value by scarcity.
Some games are known to be less available than others and thus command higher prices but does that always mean this will continue to
A: hold it’s current value?
B: continue to grow in value in the future?

With regular stocks, the company affects the price by showing positive profit margins and returns each quarter and year which entices investors to put more money into company x in order to cash in when the stock goes higher in price again. With retro games the only real determining factor is whether collectors are willing to pay the price being asked.

Currently speculators, profiteers and resellers have built up a market where the prices have hit all time highs due to the resurgence in interest in retro games. This is in part because there’s a whole generation who grew up on the tail end of the Atari, moved into the Nintendo Era and eventually the Super NES, Sega Genesis, Turbo grafx, and Nintendo 64 and on…this cohort also happen to be in their early 30’s, have careers and the expendable income to purchase these products.

This demand paired with the fact that the target market has available cash to relive their childhood memories is a recipe for printing money…but for how long? Nostalgia is a strange beast, some people just dip their toe in the water and buy an NES and Mario 3 for some laughs and never bother collecting, but some go in full bore and want to get their hands on the games they had as kids or always wanted as a kid.

I know for myself, at times I’ve had to pay a pretty big premium for a little nostalgia, the first thing I did as a collector was try to round up the games I had as a kid for a starting point. Fortunately I was able to grab a large majority before the prices really went up but there were a few that I wasn’t able to find right away and ended up having to pay higher prices to get them.

With some of the higher priced games being in the $40+CAD, how do I know these are a solid investment? Their not is the simple answer. Just because I wanted to own say…Contra doesn’t mean the demand for it say 10 years down the road will be the same, what if they find a pallet of boxes of contra’s somewhere and the price plummets and my $40 game becomes a $5 game? This is possible as I talked about last time in regards to the sealed shipping box of stadium events.

Also how can I be sure that by the time I’d want to relinquish my collection that there will be any interest in it? What if the retro game trend stays around but shifts? As collectors like me get older and possibly start losing interest in the hobby will new NES collectors be there or in 10 years will things like the Playstation 1 and 2 be the popular retro system thus rendering my games worthless unless I can find someone to pay me what I feel it was worth.

Which brings me to my next point: these games are only worth money to collectors…things like stocks are valuable to anyone because they can always be converted into cash, not always true with retro games. If I have a “rare” title like say Bubble Bobble 2, I buy it for $800 now so it’s worth $800 to me, will it be worth $800, $1000, $2000 later just because it’s rare? Maybe if the demand for NES games is still there, not so much if the market has moved on to the next big thing. I’ve made the connection between retro game collecting and sports cards several times but it’s the best example of what we as collectors have to look  forward to when they hype around retro games dies off.

What happens when the kids of today becoming adults and get bit by the nostalgia bug? Their first thought isn’t going to be “Man I wish I had an NES!”, their going to look back fondly on that GameCube or Playstation they had as a child and the cycle will start anew. So what happens then? What happens when the new “investors” don’t want my Bubble Bobble 2? Just like in the real stock market when people are not longer interested in your stock, the price can plummet.

Thinking of game collecting as an investment is a short game for profit as the window of opportunity is limited unless you can see into the future to know when the retro bubble (pun intended) will burst or interest will shift. This hurts the guys who are hoarding  boxed systems and have their Stadium events, Bonk’s adventures and Little Samson’s locked away in safety deposit boxes hoping that in the future their going to be able to retire off selling these items again.

Collectables are super fun, they add value to your life by being awesome and are mostly priceless to you because they have intrinsic sentimental value…they should stay that way. It’s hard to transfer the excitement you had from playing Metroid to the person you’re selling it to, so they don’t see beyond what it’s worth monitarily. So unless the price of the game has risen in value and there’s a demand it will only be worth what the market will bear at the time. So if you’re planning your retirement around your game collection it might be time to better invest your money in something that won’t possibly leave you with less than your original investment and just enjoy your game collection for what it is, a hobby.

Ok rant over…thanks for hearing out my rants, I promise the next one will be about something more fun and upbeat.
Cheers!

#retroredneck
#8bitliving

Level 10: Price Burnout (is ebay is killing the fun?)

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“Well I saw it’s listed for X on ebay…”
This phrase is a trigger for rage for any collector…we’ve all had to endure being at a yard sale or junk shop, found a random treasure, only to be told by the seller “Just let me look it up”.

Ebay…oh ebay, you son of a bitch! With the introduction of ebay the market for items went worldwide, you could find items that were not necessarily available in your area, rare items, merchandise, and imports that didn’t always make it to our shores.

How great was that? Well it’s become a beast all it’s own, prices get adjusted to compensate for ebay fees, shipping, etc and it has had a major influence on prices in the retro market. The main problem is that the ebay mindset has made it’s way into the flea markets, yard sales and online sellers and has created a division in the retro community.

I spoke before about the duality of being a collector and reseller, it’s a fight between my wanting to collect cheap but also needing to move merchandise at a fair value. As a collector you run into ebay pricing on items so often that you find yourself, whether or not you like it checking sold listings when selling your own items just to be able to fund your own collection.

As much as I despise it, it’s part of the market landscape and isn’t going away any time soon, but things could be better…if sellers were at least better educated on how ebay works, sold listings determine prices not “buy it now” prices, etc.

Anyone who has ever perused ebay knows that like any other sale, you can ask whatever you want, but that doesn’t mean that’s the price the item will fetch. The idea that because something is old = value is a faulty thought process, Mario 3 for instance is a very common game, a popular game and fondly remembered, but with 60 million copies out there it’s not rare in anyway and never merits the asking price many sellers put on it.

I’ve said before that nostalgia can blind some sellers to the reality of what the object is worth because nostalgia isn’t exactly a license to print money. When confronted with what are obviously buy it now prices, I’ll definitely be haggling on it and frequently come across the phrase I opened the article with.

“Well I saw it listed for X on ebay…”
Ok, great, so if that’s what it’s going for on ebay….”WHY DON’T YOU HAVE IT LISTED ON EBAY?”. When I go to flea markets and yard sales and hear the seller mention ebay I start seeing red, if the price is so cherry, sell it there…oh wait you don’t want to deal with the fees? You don’t want the hassle of shipping? You don’t want to get tied up in fake claims from the buyer because ebay always sides with the buyer and you don’t want to get ripped off?

Fair enough. So don’t try to grind the ebay price on it just to be greedy, if the game is right in front of me there’s no shipping or fees to you, so don’t blow smoke up my ass about what it’s going for on ebay, there’s one thing you’re forgetting…you need my money more than I need the game.

I’d prefer you put it on ebay, if I choose to buy it then be a dirt bag and put a claim against you…ebay will side with me as the buyer and that’s a big win for me…seems like it would be easier to just sell at a reasonable market price, nobody is asking you not to make some profit, but there’s got to be some realistic consideration that goes into it.

There’s a lot of factors that go through my mind when purchasing, biggest thing I take in to account: how much you paid for it. At a pawn shop I know you’re not paying close to a fair value to get the item so don’t try to feed me an ebay price. Has the item been around for a while? If the game has been gathering dust for a year, don’t expect a dime close to what you’re asking because it’s already overpriced, which is why it isn’t moving.

Now ebay hasn’t completely destroyed what was a fun hobby, but has done a lot to poison sales outside the online market. This hurts new collectors more than ones like myself who already have a substantial collection so I’m not often looking for many rarer titles as I was able to pick them up during the cheaper days. The new guy who decides to come into the retro community is the one getting bombarded with the $50 Mario 3 because the seller saw someone asking $50 as a buy it now price.

This is where ebay ruins the hobby by making it hard for new collectors to get into the scene. It now costs an arm and a leg just to start collecting even common games which can deter a lot new collectors, the guys who’ve seen a few episodes of the Game Chasers or Pat the NES punk’ “flea market madness” and go out starry eyed looking for deals, only to get hit point blank in face with ridiculous ebay priced games.

Negotiation is key in this market where applicable, there are some sellers who will not flinch, so don’t bother trying, in that case it’s best to just move on as you can eventually find what you’re looking for at a price you want. You have to have a set price in mind and be ready to haggle it out, most times if you try it’s successful but it can be tedious.
Even non collectors are now aware that there’s value to old games which is why sometimes yard sales can be more of a hassle than dealing with your local reseller at a flea market or retail store, at least the guy in the store has done a bit of research beyond “I heard nintendo games sell for like X on ebay”. There’s nothing worse than asking a seller at a yard sale how much their copy of Anticipation for NES is and getting $20 back as a price, you know if you go on ebay that’s probably going to be the first and/or highest buy it now price.

As collectors and resellers we need to bring change to the scene, if nobody rebels against the price gouging the profiteers have no reason to stop running prices up. The more people refuse to pay ridiculous prices the sooner the profit guys get out, once the goldmine starts to dry up they’re gone.
As sellers it’s important to be aware of keeping prices reasonable,  profit is part of the game but there’s a limit. As the market changes and profiteers get out, more merchandise will find it’s way back into the market at much lower prices. Also as the hype over retro collecting eventually dies down we will see fairweather collectors dumping collections back into the market again as well.

In the meantime though it’s the retro community that has to influence the change if it’s going to happen, bitching about prices is one thing, but if we do nothing to change them then we can’t blame ebay for ruining our hobby. So get out there, get deals, help each other out, trade games and don’t give your money to profiteers and we will eventually see the change we want.

#retroredneck
#8bitliving