Tuesday, April 3, 2012

Freakonomics: How to Enjoy an Endless Supply of Free Retro Games and Consoles

If you, like me, purchased a Play Station 2 new in 2002 you would have paid 27,800 yen for it. 

If you were to walk into an average store selling used game stuff today, you can buy that same Play Station 2 for 7,000 yen, about 1/4 what it cost in 2002 (and about 1/5 the cost when it was first released).  You basically paid 20,000 yen that is completely unrecoverable.  In economic terms that money could be described as the amount you paid to enjoy the console over the course of the decade while it was new - a kind of `rent` if you will.

That is a pretty standard rate of depreciation.  If you buy a car or TV new it will also experience a precipitous drop in value starting the second you purchase it. 

One of the economic benefits of purchasing retro game stuff is that unlike new stuff the thing`s value doesn`t immediately start going down like that after you buy it.  Its value has already depcreciated as much as it is likely to (though maybe the PS2 still has a bit more depreciation left in it).

If today you were to buy, for example, a complete Famicom system for 40$, assuming you don`t break it in the interim, it will probably still be worth 40$ five years from now.  Maybe more if you are lucky.

If you consider the implication of this fact it creates a rather exciting opportunity for retro gamers - the possibility of an endless supply of free consoles and games.  Let me demonstrate below how this could be done.

How to get an Endless Supply of Free Retro Games and Consoles for the Rest of Your Life

The availability of Ebay and buy/sell/trade sections on retro game forums creates a market in which it is pretty easy to sell retro games and consoles to other enthusiasts providing you charge a reasonable price for them. 

So lets say you have 100$ and you want a Famicom and some games.  No problem, there are a lot of people who will sell that to you on Ebay or any one of a number of forums.  You get them, play them, enjoy them for a couple of years.

At the end of that you decide to sell them.  And you can because these forums exist.  Because there was no depreciation and assuming you were smart and paid a reasonable price for them you can probably sell them for the same 100$ you paid for them, maybe even a bit more.  You can then use that money to buy your next console - say the Super Famicom or something. Again you pay 100$, play the games for a few years and then sell them for the same amount.

And you just repeat the process until you decide you no longer want to play retro video games anymore, at which point you sell whatever console and games you are left with and recover your 100$ - leaving you with the exact same amount you started with.

With the exception of shipping charges at the end of the day you have gotten years and years worth of retro gaming for free. If you were a particularly good wheeler and dealer who turned a profit of 10% or so on each transaction, you could probably eliminate even the shipping costs as an expense.

I use 100$ just as an example, you could start with 500$ if you wanted to get some rare system or to get a lot of games, the beauty part is that it doesn`t matter because at the end of the day you could still recover everything and not be out a dime.

All of this, of course, is predicated on a few assumptions that might not work out in actual experience.  It assumes you don`t overpay for anything, which might not happen.  Fortunately though even if you do overpay for one thing, if you are constantly engaged in transactions over the course of several years you will probably also underpay for other things, so the two should cancel each other out.  And of course this idea will only work if you don`t break anything that can`t be repaired - so be careful with those consoles!

It also assumes that you are able to resist the urge to become a collector who wants to keep everything, which (as I know from personal experience) is very difficult to do :)

Anyway, food for thought.


  1. You read my mind... this also fuels the secondhand market very well with people buying & selling games constantly.

  2. Great minds think alike as they say:) Keeping the second hand market healthy is the key to allowing this sort of thing to work. Fortunately the existence of forums like Racketboy, Famicom World, etc makes this possible. Prior to the internet it just couldn`t have been done, at least not easily.

  3. I'm too much of a horder to sell any of my games. Also my tastes tend to veer into the rare and expensive territory.

  4. Really great way to look at it Sean! Unfortunately (for my wife) I am in the same category as Retr0gamer is above - just can't part with anything.

  5. I like the way you think, Sean! That said, I'm like Retr0gamer--I'm too much of a collector/hoarder to sell my games. I used to sell them, mind you, but I quickly discovered that I always end up wanting them back at some point, so I may as well just keep them :)

  6. Retr0gamer, Hollo, Bryan -

    Yes, this is one of the reasons this may be impossible for anyone to actually accomplish in practice. I can`t resist the urge to collect stuff either. You have to be pretty cold to actually do it.

    1. In a big move I have started to sell off my triples, but I'm not sure if that counts. :D

  7. Triples kind of count. I like to keep doubles of some so I`ll have back-ups in case something happens to the main one. Then you get a triple of a game and have to think `Do I really trust that double? What if I experience a double-cart failure?`

    Then I keep the triple. You can never have too much insurance for the good ones.

  8. Someone not heard of inflation then...

  9. I live in Japan, inflation hasn`t existed here in about 20 years.

    Besides inflation wouldn`t effect this. Inflation means the prices of consumer goods goes up. That includes used video games. So if you buy something now for 40$, in 5 years it may sell for 45$ due to inflation. That extra 5$ would not be profit but merely a reflection of inflation.

    I have to point out that none of this is necessarily intended as something anyone would actually accomplish, merely that it is something that is theoretically possible. One would be incredibly unlikely to actually sell something for the same price adjusted exactly for inflation 5 yeas later.

  10. Well you also have to consider that interest in certain retro platforms rise and fall. When I first got "hardcore" into collecting NeoGeo AES (home console) carts the interest was very high at the time. Years later, many people realized this was too expensive and they dumped most of it or all and went MVS (arcade cart, which is much cheaper). Now a lot of the high value games I got at the peak of the market can be had today for 100 or more USD less.

  11. Good point, Stealthlurker. The key is to only buy stuff that is cheap. Inevitably of course people will pay too much for some stuff. The plus side being that if you also pay too little for some other stuff over the long term it might all even out.

    `Might` being the operative word here. I`m not so sure this is at all practical in reality as there are too many variables like that which are uncontrollable.

  12. Sean, good idea (in theory?). I think one of the main problems with it is eBay itself. It has a created a culture were very few are willing to pay a 'resonable' price for anything there. Too many want something for nothing and then still complain! What an items value is and what it sells for are normally two different things unfortunately. Like most eBay sellers i only want a fair price. Experience has taught me that i very rarely get it.

  13. That is a good point, junkmale. I`ve noticed some egregious over-pricing on Ebay of Japanese stuff and I read nothing but complaints about the same thing with US stuff. I suppose my analysis is tainted by living in Japan where it is possible to score good deals sometimes!

  14. The problem with eBay is that most of the market for retro games are people who are trying to find that specific game and they price themselves for the demand. Let's say that hypothetically, I'm someone who came in possession of an SNES and want to relive my childhood by playing F-Zero. The easiest way to do so is go on eBay and look for a copy. I don't care if it's mint in box, I just want a cart that works.

    If you do an eBay search for F-Zero you'll see that the average price (including shipping) is $6-$7. Now if I'm the person in the above scenario, I'm probably going to pay the $6-$7 no matter what because there's no easy alternatives and I want to play the game.

    But stores that carry retro games can rely on the fact that a few people might come in and pick them up for no other reason but to try them or they're collectors or whatever. Maybe they went in for F-Zero but saw S.O.S next to it for a low price. I got my copy of F-Zero from a local video store for $4. Actually, it was less than that since it was a sale. But that was the price tag on it.

    (By the way, I've moved to Kanazawa! My Famicom is sitting in the corner but I don't have a TV yet :( I haven't done a thorough search, but it appears that the Chameleon Club (used video game store) by my apartment has a nice collection of Famicom games for pretty decent prices. I got Tecmo Super Bowl for 50 yen which was so good of a deal I couldn't pass it up. On the other side of the spectrum, the Don Quixote MEGA store here had some Famicom and SuFami games in stock for whatever reason... but they were ALL 450 yen, and that included common baseball games and Mahjong games. Ridiculous).

  15. Nate - very good point there about the logic of buyers and sellers keeping prices on the high side. Actually I`ve fallen into that trap a few times myself, looking for a specific game and being willing to pay more than what it was worth just for the convenience of getting it quickly.

    That is great that you are in Kanazawa. I`Ve actually heard of Chameleon Club. We dont have any here but I`ve gotten a few old Famicom carts with their shop sticker on them.

    50 yen for Tecmo Super Bowl is a great deal, I like that game a lot (speaking of fond memories, I used to play that when I was in high school).

    And I know EXACTLY what you mean about Don Quixote, they have the same thing at their shop here except they want 498 per cart for almost nothing but Baseball, Mahjong etc. I even did a post about them a while ago:


  16. A very good point I've thought of before too. I keep telling myself that I can't spend £100+ on a copy of Radiant Silvergun, for example, but then I realise that I could buy it, play it a while, then sell it for about the same. I still haven't gotten around to buying it though :P