Thursday, March 25, 2010

Opinion: On the economics of retro game collecting

I've been noticing in the past few years that some insanely high prices are being paid for some of the rarer retro video games. These would include the "Gentle Physics and Science of Hazardous Materials" for the Famicom going for about $4,ooo or Nintendo World Championship Gold Edition going for $20,000. All this money being blown on games that have absolutely no playing value raises the question of whether or not retro games are really worth that much.

As a general rule I don't spend any serious money on retro games. My basic standard is that if a game costs more money than I am willing to completely lose then I don't buy it. Right now that hovers at a maximum of about $15 a game, which is what I figure a couple of hours of entertainment is worth.

That said, I certainly acknowledge that there is also a collector value above and beyond the play value which could drive reasonable people to pay much more than that for an old game. As with any market, the basic laws of supply and demand will determine the price people are willing to pay for them. In the long run though is it useful to look at these things as an investment?

For a parallel, I look to the baseball card market that flourished about 20 years ago. When I was a kid in the 1980s/ early 90s I amassed a gigantic collection of baseball cards under the assumption that by 2010 they would be worth a fortune. All through the 1980s the prices of baseball cards just went up and up so at that time this seemed a reasonable proposition.

To give you some idea of how well that plan worked out for me, when my parents moved recently I was told to get rid of all my old stuff in their basement, including my card collection. The only quick and effective way I could find to dispose of them was to pile about 30,000 of them into the back of a truck and drop them off at the local Salvation Army. They simply had no value.

Of course, those were all mass-produced cards from the late 80s/early 90s for which there exists no market because the manufacturers were turning out, by one estimate, approximately 81 billion cards per year at that time. The older, harder to find cards retained their value, right?

Well, actually, no. With the exception of a handful (literally) of exceptionally rare ones, like the 1909 T-206 Honus Wagner, pretty much all the old cards have lost value too. One example is this baby:
This is the 1968 Topps Nolan Ryan rookie card. It wasn't overproduced and there probably aren't that many copies of them out there in top condition. If there was a card in 1991 that seemed like a safe investment, this was it. At its peak in the early 1990s this card was listed at $1200 in Beckett's, the main card price guide. Since then, Nolan Ryan retired, got inducted into the baseball hall of fame on his first try, and pretty much avoided all the scandals that rocked baseball after his departure.

Despite this, the last time I checked a Beckett's this card was listed at $500, meaning a loss of $700. But from an investment point of view the drop in value has been way greater because of the time value of money. If in 1991 you had $1200 to invest you could have either a) bought the Nolan Ryan rookie card; or b) invested in some sort of stable, diversified financial instrument that delivered a conservative return of 5% per year.

If you opted for a) you would now have a baseball card worth $500. If you opted for b) you would have an investment worth over $3,000. So really it would be more accurate to say you lost $2500 by putting your money into the Nolan Ryan rookie card - a card that, it should be said, has held its value better than most others.

Anyway, enough about baseball cards, what does this have to do with retro game collecting?

For one, its worth noting that what I said about the baseball card market applies to a lot of other collectible markets that went through similar bubbles - like stamps and comic books. In those too, over the long run an extremely small number of the most sought after examples have gone up in value (like Action Comics #1 with Superman's first appearance) while the value of pretty much everything else collapsed after the initial rush of people pouring money into the market dried up. The only reason I can think of for the continued rise of the price of the really rare "icons" of the baseball card, comic and stamp worlds is that there enough multi-millionaires out there looking for trophies to keep the values of those pumped up. The key lesson: unless you have millions of dollars lying around with which to purchase one of those insanely rare items, don't invest in collectibles markets.

Retro video games, it should be noted, have some key differences from these other collectibles. The first is that video games have intrinsic value: they actually do something. Baseball cards and stamps are just worthless pieces of cardboard and paper that serve no purpose other than to look pretty. Comic books have a bit more to offer as they can actually be read, but they are still pretty limited. So a retro game will probably never become truly "worthless" in the way that, say, my 1989 Topps Alvin Davis is worthless. The advent of much more convenient downloadable forms of these games puts a definite limit on what intrinsic value the games have (ie less than whatever the manufacturers charge for the downloadable version), but they should still have some value.

Another thing that separates retro video games is that, at least with game cartridges, nobody is making them anymore. The handwriting is on the wall for disc-based games too, in a few years probably all games will only be released via downloadable files, which are fundamentally un-collectible. This avoids the big hammer that destroyed the baseball card market: the fact that every year massive heaps of new cards were being dumped into the market. This just further and further dilluted the value of all cards as the limited amount of money collectors were willing to spend got divided into smaller and smaller chunks between a relentlessly expanding supply of sets.

With cartridge games, however, whats out there is all that there is. When you take into account the fact that what games are in existence are still being used and getting worn out, broken, having grape soda spilled on them, etc the supply of retro games in physical form is actually getting smaller and smaller.

At the same time it should be noted that while the supply side isn't growing, this doesn't necessarily translate into increased demand. On the one hand, there are a lot of 30-somethings like myself who grew up with these games (or at least spent a lot of time looking longingly through storefront windows at them) and, now that we are adults with money of our own, will willingly shell out some bucks to get those old games. On the other hand, the fact that these same games can be downloaded with little or no effort means that the number of people specifically looking to obtain a physical copy of their favorite game will be limited.

So I think the collect-ability of a lot of games will in the long run be determined by how desirable it will be to actually own a physical copy of the game. I think Famicom games are actually on pretty safe ground there: the carts actually look cool. They come in a variety of colors and cartridge designs. Plus the Famicom is a marquee console in video game history which had an impact around the world.

I compare that to the Super-Famicom, which I don't think there will be much of a market for in the years ahead. To be certain there are a lot of great Super-Famicom games, but the actual physical carts themselves are pretty damned boring and ugly:
Plus they are a pain in the ass to store (they don't stack easily) and are a lot bulkier than Famicom carts (which makes them more expensive to ship). Also the Super-Famicom wasn't a revolutionary system like the Famicom, it was basically just a Famicom with better graphics. The Nintendo 64 with its 3D gameplay was the next big step after the Famicom in gaming evolution. This is probably one of the reasons why most retro game shops in Japan have massive stacks of Super-Famicom games going for as little as 10 yen each while their Famicom selections tend to be smaller and higher-priced.

So I think the market for Famicom games is probably going to be OK - in the sense that people will still buy and trade them in the future - though I don't think anybody is ever going to get rich off of them. This is a pretty healthy place for a collectible market to be - cheap enough so that people with limited budgets who do it solely for fun can still afford to buy most of the stuff out there.


  1. Mister, your website is incredible!

    Honestly, the words are missing for me to describe it...
    and everything else that bonds it together!

    I find it hard to believe that your are the only person behind this... are you?

    Either way, keep up the great work!


  2. No offence, but.... If it was technologicaly much an upgrade first to Famicom, it had however a few new stuff like the Mode 7. Also, the visual difference was stnning for m at least, when i got the SNES.

    It was also a revolution too, as genres came out of this consoles as well, and classics where branded; it is one of the highest classed consoles ever.

    And it have also some real awesome arts for it. Boxing and cartridges.

    You sire, is a bit baised and didnt see some details. Sorry.

  3. Sorry, I didn't mean to insult the Super Famicom! You are correct, it is a great console and it does have a lot of good games for it!

    That said, I stand by my post. The Super Famicom is a great console, but I think the Famicom has a much stronger claim to being "revolutionary".

    I don't like the boxing or cartidges at all though. Well, the boxes are OK, but I prefer the much smaller Famicom boxes. That is just my taste though, I acknowledge that others may have different opinions.

    The carts themselves though? I think the Famicom ones are way better. The Super Famicom labels look good and have some nice art on them, but the over-all carts do not look good. They are big, clunky and grey. And they are a pain in the ass to store because they aren't flat on the surface.

    1. "Super-Famicom wasn't a revolutionary system like the Famicom, it was basically just a Famicom with better graphics."

      I'm just doing some light internet trawl reading and came across your post - I do realise you made this post ages ago, but others may be reading. I just disagree completely.

      The NES was released in 1985, the same year as the Amiga 1000, so from that point of view it was far from revolutionary as the Amiga technology was FAR superior (and more expensive), but I digress - SNES was not just an upgraded Famicom. The NES was pretty pitiful really even for its time - 2KB+2KB of RAM and an 8-bit 6502, 48 colours? Hmmmm....

      I'm more a Megadrive fan (which incidentally was ALSO a significant upgrade on the NES), but the SNES had a 16-bit CPU. In addition - Mode 7, a palette of 32768 colours - 256 at any one time, the custom SPC APU and not to mention the FX co-processor which was embedded in certain carts. In terms of games - Super Mario World 1 & 2 - BOTH revolutionary, Starwing -revolutionary, F-zero - revolutionary. Donkey Kong Country - revolutionary, plus many titles shared with other platforms like Flashback and many classics like Zelda 3, Chrono trigger, etc. The NES, which please don't mis-read me, definitely has its place in history (I do own one for that reason), could not even hope to scrape the boots of the above. Boulder Dash on the NES is pretty nice, especially in comparison to the Amstrad CPC version let's say, but Ikari Warriors is not comparable to the Amiga version. Mario 3 is pretty nice, but nothing like Super Mario World which brought in the Yoshi helper sprite, Mode 7 goodness and huge bright colourful sprites.

      I hope you might agree with me in the context - I know it rejuvenated the home console market at its time, but I really don't think the NES was that revolutionary as a machine.

  4. will you please scan your super famicom / super nes cartridge labels at 600 dpi or 2000 pixels, zip them then send the zip file to me? I collect game art and I am in dire need of your contributions. I am tired of searching for raw scans. Please help me finish my collection. Have a pleasant day.

  5. Sorry, Just Sayin, unfortunately I can't do that. Partially because my scanner is broken, but also because I unfortunately don't have much spare time these days.

    Good luck to you though! :)

  6. Hi Sean, it's okay. I understand. You have a large collection and you are busy. However, even 2000 pixel hi-res photos will be nice. I clean the labels to make them look new. I collect game art. All of my games were stolen and I would like to have the art again. I will check back throughout the year. Maybe you will reconsider and photograph labels for me. I especially need some of those Japanese sfc and N64 labels that are in some of your pics. I will stop bothering you now but I will check back over the next few months to see if you add larger more hi quality pics. May you have a pleasant day and thanks for responding. Happy gaming! :-D

  7. Good luck to you, Just Sayin, that sucks about your games being stolen.

    If you just have a couple you need then I could probably take some photos sometime for you.

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  9. I truly appreciate such kindness and understanding. I miss having my games and being able to collect the art work is wonderful. I have a small list of cartridge labels that I am missing and I thought that I will post all of them so that you can see which one(s) that you have in your collection. I just need a large, clear photo of the label. I am very thankful for your time and effort. If there is something that I can do in return, please let me know.

    I am seeking either the Japanese, European or American labels of any of the following that you may have:

    Adventures of Yogi Bear
    Boogerman A Pick and Flick Adventure
    Brett Hull Hockey
    Brett Hull Hockey '95
    Barbie Super Model
    ** Donkey Kong Country 3 [JPN]
    Hebereke's Popoon
    Jetsons - The Invasion of the Planet Pirates
    Mario's Time Machine
    Mario's Early Years - Pre-School
    Mario's Early Years - Fun with Numbers
    Mary Shelley's Frankenstein
    Mohawk and Headphone Jack
    Mr. Do!
    NHL '98
    Nickelodeon Aaahh!!! Real Monsters
    Nickelodeon GUTS
    Power Rangers Zeo - Battle Racers
    Ren & Stimpy Show - Buckaroo$ 0
    Ren & Stimpy Show - Time Warp
    Ren & Stimpy Show Part II - Fire Dogs
    Sailor Moon
    Tom & Jerry
    Yoshi's Safari
    Yoshi's Cookie

    hebereke's popoon and DKC3 (Super Donkey Kong 3)is my most wanted. Thanks again and I will check back often to see if you are able to help. I hope that you have a pleasant day.

  10. I do have Donkey Kong 3 for the SFC. Unfortunately I don't have any SNES games and I'm pretty sure I don't have the other ones on that list.

    Send an email to:

    famicomblog (at mark)

    and I will email you a picture of the label on it.