It quickly became obvious which people were buying up these games as they saw a market with rapidly increasing values. I started tracking the price of every game in my collection a few years ago (out of curiosity and as a record for insurance) and saw it increase by thousands of dollars every year due to the crazy spike in prices.
Even games that were uncommon, but not actually rare started to skyrocket. Let’s look at Little Samson on the NES. While it was always a valuable game that was highly sought by game collectors, it slowly rose from around $50 to $200 from 2008 to 2012. That’s a rapid increase, but once it became a well-known valuable game, the price skyrocketed from $200 in 2012 to $1200 over the next 5 years. It has since retraced back to a still high $1000 or so for a loose cartridge.
This is reasonable for a game that’s truly rare like the famous Stadium Events, since the low supply makes collectors panic every time another cart enters a collector’s hands. But Little Samson isn’t rare, its just very uncommon. Collectors will tell you they will see several copies of it when they browse the wares at retro gaming conventions. A rare game wouldn’t be showing up on several vendors tables.
Investors drive up prices
While collectors do cause the prices of games to gradually increase until demand is satisfied and the prices start to come back down (which seems to be happening across the board right now), in my opinion its investors and flippers who buy and resell copies of rare games who fuel the crazy price increases for games like Little Samson. Its not hard to spot a trending game and profit off its rarity and popularity. Buying a game that sells for $200 and flipping it with a buy it now price fo $300 becomes a self-fulfilling rising market. As the copies between $200 and $300 get snatched up, someone will eventually buy this flipper’s $300 copy, which drives both the average selling price up and creates panic among collectors that push them to pay more for games that shouldn’t be rising this quickly.
So are games an investment?
In short, no. Retro gaming has been a fad for the past decade, with a ton of casual new game collectors entering the market. We’ve seen prices rise and fall with every system as the generations that grew up with them enter adulthood, start buying games from their childhood driving prices and demand up and eventually selling them as they lose interest and driving prices back down.
While I do think that games will hold their value better than most collectibles, if you want to invest your money the video game market is a terrible place to do it. You would be much better off putting that money in an index fund.
Trying to collect retro video games in 2018 is frustrating and expensive, but the good news is that its going to become less popular. It definitely became a fad that was compounded by articles and TV shows spreading the idea that your copy of Combat on the 2600 is worth a ton of money (my local Craigslist had a copy on there recently for $50). For investors and flippers, falling prices will kill off their incentive to buy up inventory, and prices will eventually fall to the point where it becomes fun and affordable to collect again.
We just have to wait it out.
So what do you think? Are games worth investing in or are there better things to sink you money into? Are flippers and investors driving up prices? Let's discuss!
Cover Image Sources: NintendoAge and Game Fabrique