Hello /biz/, /vr/ here.
I'm not versed in financial nomenclature well enough to articulate something that is frankly starting to piss of the community, buy/selling/trading retro gaming consoles.
Some of you may be aware of some games like Earthbound that are going for 200 dollars on ebay. Well now this sort of insane pricing has bled into all sort of other areas.
Almost all retro gaming goods are marked up 30% from recent value. A lot of obviously not rare games are marked up to ridiculous amount. Is this the result of supply and demand? Because I actually don't think there is even a demand for this. I feel as if these people horde the systems and use relisting software until some sucker buys one.
Anyway, I'd be very interested to see if any /biz/friends knowledgeable on the subject can explain to me what kind of market this can be classified as and how I can research other markets to plan my future collecting and spending in this area.
Thanks for the reply anon, I did not know of this term.
Further questions: Why are they appreciating? They are NOT "rare". For example, the nes sold 61 million units world wide. NES is extremely common. Why is it price so high now? Why does it appreciate? Can appreciation be faked/manufactured ?
There are many things that factor into the prices of things that become collectible. Even though the total population of a certain collectible may be high, as with the NES as the state, far fewers are in collectible condition.
That is, as time passes, some people throw the items away and some items break. Of those that are still in people's possession, many are in poor condition.
You will probably notice that items in nigh-mint condition are typically worth quite a bit more than items that are in used condition. Original packaging also makes a collectible item more valuable.
Thus, to summarize, the factors that drive the price of a collectible are:
1. Low supply (rarity) relative to demand (how badly people want the item)
Besides straightforward supply and demand, you also have to think about the motivations of the people selling these things.
The people who bought the NES back when it was new were mostly not interested in 'retro' gaming. They bought it because it was the current system at the time, and once a new system came out most of them would have moved on. Those people would have been willing to sell their old NES for a cheap price, because they basically wanted to get rid of it.
In the years since, you will still have some people who bought a new console, put their NES in a cupboard somewhere and forgot about it, and then a while later they found it and sold it. These still aren't collectors. They're just people trying to get rid of old stuff. Some of these people probably would have just thrown it in the rubbish. So used NES was cheap for this period.
As time goes on, we reach a point where the people who own NES consoles are going to be mostly collectors. They either bought a NES long after it was outdated, because they collect retro games, or they have deliberately held onto their console for over 20 years hoping it would be worth something someday. These people will be extremely reluctant to sell the console for a low price. These are the sorts of people who will list something for a very high price on ebay, because they're happy to hold onto it if they can't get that price. They aren't trying to get rid of something, they're trying to make a profit.
Your average steam user wont be interested in purchasing physical copies at all. Theres a reason why theyre on steam or most likely pirate their games.
Well op I wouldnt recommend going into video games if you plan to see big money in the future.
Its a really complicated ordeal, as of now there are Nintendo 3ds titles that are worth a lot now because Nintendo stopped their production. There are playstation titles that used to go for $100 that have dropped down to the $60-$40 range due to remakes which is weird because youd think a remake would strike popularity on the old titles
As far as your relisting comment goes, I can see it be a thing. I personally have been watching this obscure japanese retro game for a month and half and no one has bitten. Im waiting on the setter to keep marking it down
Again, if youre looking into collecting video games as an investment you should stop. Unless you hit a gold mine in a goodwill or a small mom and pop store, but even then these people have caught on amd adjusted their prices to compete with ebay
This is why I'm selling all my shit now. I thought the value would appreciate but it didn't. At least not relative to inflation. I've held some items for years on end, to no end. Liquidate those assets, OP.
UNLESS you have certain items in NM/M condition, especially boxed. Keep those for a few more years.
/vr/ here as well, but I'm not OP
A common topic amongst collectors is "are we in a bubble?" and "when should we cash out". Are there any tell tale signs we should look out for?
IMO, this will be like commic books, the bubble will pop, and the actually collectible games will continue to appreciate, and the more common stuff will rapidly deflate.