Market Crash Hypothesis

[evilnick]

Hey folks! 

If I don't appear familiar, it's because I've been more pre-occupied with my other collecting hobby for a while, and am returning to game collecting as a primary focus. One ebbs, the other flows, as it were.

I had a discussion with a fellow collector chum in the UK about how sustainable this market is. We get along because of a shared fascination with gaming, classic gaming, gaming hardware, and our own personal quirks. We aren't doing this to build some kind of asinine future "nest egg" or to get rich. But we're getting increasingly jaded by the gross inflation of prices on the secondary market. Neither of us believe this is sustainable, and will eventually lead to a retro gaming "recession" if not a full-blown "crash."

At some point the horrible reseller gouging and eBay effect (wherein regular people look up Buy It Nows and think they can charge equally offensive prices, you see this at garage sales and second-hand stores) will simply kill the fun and enjoyment of this hobby. It has become apparent that there are people out there, like some people from Nintendo Age, that seem to want to control market prices with artificial shortages and price gouging. With Tim Atwood threatening to offload his collection to deliberately destabilize the gougers. This other mega-collector, noted at Kotaku, is preparing to offload a massive collection at the end of May.

Personally, I don't do this looking for a big pay-out in the future. I don't even seek the most valuable titles. As far as I'm concerned, this is the worst reason to collect anything. It destroys the fun, and it is horribly unpredictable, for instance, remembering my mother collecting Beanie Babies and the bottom falling out of that in the worst way.

Prices have shot up to an insulting degree in recent years. Around 5 years ago, I got my Jaguar and 4 boxed games for around $80 or so. One of those was the original Rayman, which then, was around $30, so I was pretty happy with the deal. Now, eBay sales have gouged this regularly up to around $200--just for the Rayman game.

How much are we, as collectors, willing to tolerate? When major stockholders start offloading like the two links I noted, stock markets tend to plummet, and it signals an end. Where I live, more stores selling classic games have closed than are now open. Are we at a tipping point in this?

I'm curious if there is a general consensus, or a growing feeling out there that resellers and gougers and some ethically reprehensible collectors have caused serious harm to this hobby. While a market crash would undoubtedly drive prices back down again (which would be great), it also risks making some titles that much harder to find.

[oldgamerz]

Everyone wants to make money, and most of the retro market will eventually all go pricey. Especially with the fact that a lot of modern games are digital only downloads and are likely to close their servers or take the games off the online store.

We got people hording retro games as a result and I am included in this. But luckily for everyone else into collecting retro games I only aim for collecting one copy of the game, even if I find it cheap I try never to collect more than 1 of the same video game because I respect others. But I have duplicate of some of my games that really mean something to me like Compilations.

 And I know that the retro gaming market will get outrageously high in the future. letting only the rich in on the retro gaming goods.

[cirno]

Tbh, anything that's "big" for hoarding and scalping usually crashes back down to being worthless...which means it'll probably come full circle and become accessible again. You just gotta play the waiting game

[bikingjahuty]

Video Game collecting will be no different than any other major collecting trend over the past 30 years. Sports cards, comics, vintage toys, Atari (I know they're video games, but Atari and pre-NES era collecting was big in the late 90s and early 2000s), and other collecting trends of old collectables all were insanely hot for a number of years before the people that built the trend up left leaving the resellers to fight amongst themselves for stuff no one wanted to buy anymore.

Video game collecting will be no different and according the the historical price data we have finally reached that point where the decrease in interest is starting to show. This has manifested itself in certain retro consoles plateauing in price, mostly Nintendo stuff, but other consoles like the Saturn and Dreamcast are seeing huge decreases in prices right now. Like the other collecting trends I mentioned, people who grew up with this stuff and actually care to hunt it down or pay top dollar for a 20-year old game are leaving the hobby because they've taken on other financial responsibilities, have started families, or just got burned out of video game collecting.

Some people make the argument that video games are immune to the same burnout and overall lack of interest that the other hobbies have experienced, but this is untrue since retro games appeal mostly to people who grew up with them, which at this point are getting older and older and have moved on. I find it unlikely that a few hipsters or hardcore retro game enthusiasts born after the year 2000 will care about the NES library or even the PS2 since they were so young when it was being supported, at least not enough to keep prices up where they're at.

With all that said, I don't think game prices will ever return to what they were before video game collecting exploded in popularity, but I do see things overall dipping below 50% of their current value on everything except the rarest of titles.

[evilnick]

Everyone wants to make money, and most of the retro market will eventually all go pricey. Especially with the fact that a lot of modern games are digital only downloads and are likely to close their servers or take the games off the online store.

 And I know that the retro gaming market will get outrageously high in the future. letting only the rich in on the retro gaming goods.

Both of these points would tend to lead towards a reversal or recession. If the market gets so high only the wealthiest are fighting over it, that will kill interest for anyone else and there will, effectively, be no more interested buyers. The fears brought on by the Nintendo Age guys over Tim Atwood selling his collection would seem to indicate a serious fragility in the market where a single person with an impressive collection can destabilize the market.

I've wondered about the longevity of modern games, and the current generation is essentially the "least collectible" in the history of the medium since vast numbers of the releases are digital-only. Indeed, the majority of releases are digital now. One part of this has to do with the ease of digital games, but also stems from a wider conversation about how "middle-ground" games are vanishing. It's comparable to how the Middle Class in the US is shrinking, so too in gaming is the middle class (AA, A, B-level games) shrinking. Countless games are very online-centric now, and patches, add-ons, and updates are so commonplace we've stopped complaining about them as an industry. On top of which, both Microsoft and Sony have floated ideas of moving to a more mobile-phone style upgrade system, which should, properly implemented, mean every system going forward is backwards-compatible, at least on a digital front.

[evilnick]

Video Game collecting will be no different than any other major collecting trend over the past 30 years. Sports cards, comics, vintage toys, Atari (I know they're video games, but Atari and pre-NES era collecting was big in the late 90s and early 2000s), and other collecting trends of old collectables all were insanely hot for a number of years before the people that built the trend up left leaving the resellers to fight amongst themselves for stuff no one wanted to buy anymore.

Video game collecting will be no different and according the the historical price data we have finally reached that point where the decrease in interest is starting to show. This has manifested itself in certain retro consoles plateauing in price, mostly Nintendo stuff, but other consoles like the Saturn and Dreamcast are seeing huge decreases in prices right now. Like the other collecting trends I mentioned, people who grew up with this stuff and actually care to hunt it down or pay top dollar for a 20-year old game are leaving the hobby because they've taken on other financial responsibilities, have started families, or just got burned out of video game collecting.

Some people make the argument that video games are immune to the same burnout and overall lack of interest that the other hobbies have experienced, but this is untrue since retro games appeal mostly to people who grew up with them, which at this point are getting older and older and have moved on. I find it unlikely that a few hipsters or hardcore retro game enthusiasts born after the year 2000 will care about the NES library or even the PS2 since they were so young when it was being supported, at least not enough to keep prices up where they're at.

With all that said, I don't think game prices will ever return to what they were before video game collecting exploded in popularity, but I do see things overall dipping below 50% of their current value on everything except the rarest of titles.

I used to collect baseball cards as a kid, and that was where I cut my teeth on how collectors markets work. Once the market went from "hey this is fun, whose got what cards, look at the cool variants" to "value value money money rarities rarities," the market up and died. Sports card collecting has never recovered. Back then, baseball cards (and sports cards in general, but baseball cards had a 50+ year history) had become big business, and were widely sold everywhere. Now, they take up small end sections in department stores, and dedicated stand-alone shops have largely vanished.

The baseball card industry killed itself in large part because of the same reasons the comics industry killed itself in the 90's. Overproduced, too many deliberate collectibles, and too many people ravenously buying, hoarding, and reselling. The video game industry is seeing this in modern times with ludicrous amounts of special and limited editions of games, numerous different variants of the same base release (there was what, 4 or 5 different ways to purchase Far Cry 5?), and a collectors market that allowed prices to reach absurd levels.

Have to agree that I don't think the collectors market for video games is immune to a crash or price plummet. We have our Action Comics #1 rarities (like Stadium Events NES or Atlantis II 2600), but given the much younger age of video games, they are still much more common and tend to be in better shape. For the most part, it would seem the current collecting trend has run on for quite a while, and those who feel it is immune or that it can never crash should be seen as the hubris that actually precedes collapse.

Hell, in any documentary I've watched or event I've read about where something reached a peak and then came plummeting back to the bottom, the turning point always came with a massive new peak and a perception that the target in question was invincible or going to go on forever. Be it Enron or Worldcom, the baseball card or comics industries of the 90's, or more recently, Cryptocurrency, which saw it's greatest peak last December, and has been plummeting ever since.

[hoshichiri]

Video Game collecting will be no different than any other major collecting trend over the past 30 years. Sports cards, comics, vintage toys, Atari (I know they're video games, but Atari and pre-NES era collecting was big in the late 90s and early 2000s), and other collecting trends of old collectables all were insanely hot for a number of years before the people that built the trend up left leaving the resellers to fight amongst themselves for stuff no one wanted to buy anymore.

Video game collecting will be no different and according the the historical price data we have finally reached that point where the decrease in interest is starting to show. This has manifested itself in certain retro consoles plateauing in price, mostly Nintendo stuff, but other consoles like the Saturn and Dreamcast are seeing huge decreases in prices right now. Like the other collecting trends I mentioned, people who grew up with this stuff and actually care to hunt it down or pay top dollar for a 20-year old game are leaving the hobby because they've taken on other financial responsibilities, have started families, or just got burned out of video game collecting.

Some people make the argument that video games are immune to the same burnout and overall lack of interest that the other hobbies have experienced, but this is untrue since retro games appeal mostly to people who grew up with them, which at this point are getting older and older and have moved on. I find it unlikely that a few hipsters or hardcore retro game enthusiasts born after the year 2000 will care about the NES library or even the PS2 since they were so young when it was being supported, at least not enough to keep prices up where they're at.

With all that said, I don't think game prices will ever return to what they were before video game collecting exploded in popularity, but I do see things overall dipping below 50% of their current value on everything except the rarest of titles.

I think you've largely hit the nail on the head here. A few notes I'd like to add:

I think Nintendo stuff will hold up a decent value, based purely on marketing. Nintendo's done really well for setting themselves up as the Disney of the gaming world, with their older titles getting the 'amazing Nintendo classics' treatment every few years. Much as most parents still buying a copy of Snow White to show their kids, old Nintendo will always have that factor going (at least for the foreseeable future.)

While I expect the Playstation crowd to start muscling in on the nostalgia market any day now, I don't think we'll ever see as big a dip as when Atari rolled through for one major reason- clone systems. If you want to play Atari, you need to find a working Atari and a TV that'll take the signal, along with whatever hookups that TV needs. Couple that difficulty with waning cultural interest and you have the perfect recipe for obscurity. Newer consoles, though? You can get modern units that hook up with HDMI, often with the ability to play multiple systems worth of carts. The fact that there more working machines that play these games on the market now will mean more people want the software to go with, even if it's just a novelty.

I think the fact that these are games will help too- baseball cards don't do anything, you just look at them. You can read comics, but they're so short it's easier to get trades. Interacting with a game is easier, as long as you're enjoying the game itself. Having a use will make games more desireable.

Newer systems aren't going to be collectible in the same way as these older ones, due to the lack of physical media for most titles. Which could mean one of two thing decades down the line- either collecting dies entirely as a generation who didn't grow up with physical stuff takes over, or these old units start holding value again as they won't have newer, more nostalgically appropriate competition.

All of that still lands on your conclusion though- a price drop that doesn't bottom out the market, but sees things come back down to an affordable level.

[burningdoom]

Every year we have this thread, and every year the only thing that changes is what happens to be the hottest thing at the moment. (Which right now seems to be GameCube.)

Been at this hobby for 20 years, I've only seen things go up, not down. While comics (which was mentioned before) have fluctuated up and down a lot (also a big comic collector, and comics are hotter now than they were in the 90s even).

I have my fingers crossed that the mythical crash will happen one day, but I'm not giving up hope on it.

[sworddude]

Everyone wants to make money, and most of the retro market will eventually all go pricey. Especially with the fact that a lot of modern games are digital only downloads and are likely to close their servers or take the games off the online store.

 And I know that the retro gaming market will get outrageously high in the future. letting only the rich in on the retro gaming goods.

Both of these points would tend to lead towards a reversal or recession. If the market gets so high only the wealthiest are fighting over it, that will kill interest for anyone else and there will, effectively, be no more interested buyers. The fears brought on by the Nintendo Age guys over Tim Atwood selling his collection would seem to indicate a serious fragility in the market where a single person with an impressive collection can destabilize the market.

You do realize that that tim atwood had very rare games wich were pretty bad but very sought after and not afforbdable for pretty much anyone in this hobby very limited market and extremely rare wich he has quite allot of copies off. Also these were sealed again a limited market for people than want to pay even more for a sealed copy of these already insanly priced games. Allot of those games were 1K+ in value if not far more not to mention allot of crappy games wich were only collected for them being a rarity a throphy item.

Stadium events for an example there are only very few people who would want to have that game and are wealthy enough to pay the insane amounts 10K's these go for.

Thanks to it being super expensive naturally there might be only less than 100 if not far less people interested in one for those amounts thus being a very fragile market these examples are already for only the rich if they haven't have one yet. These games are worthless other than rarity so naturally if many are found the value will drop down since it is only a throphy to have for it's rarity. For many of these games there might be only a couple hundred for stadium events less than 100 if I am not mistaken or maybe even in the lower end not to mention that cib copies are just a fraction maybe 20 30% tops. naturally with such rare items even a half dozen of games in cib or sealed condition are quite a big deal as far as the original rarity goes.

For pretty much everything else in this hobby it can be bought and far more people are interested since it is not crazy expensive as those insane examples of tim at wood wich are also sealed wich increase the value even more. most expensive items do not surpass the 500 mark usually not even the 100 mark not to mention that allot of those games are very excellent and attract way more people.

Prizes might lower at some point but for most of us I'm pretty sure it will take quite a while. The waiting game might be nice but I'm pretty sure at that point allot of us have moved on or might not even experience the uber cheap prizes when the market might finally crash.

It's a lottery, Prizes might go up it might just stabilize or the market might crash mostly talking about the good stuff not the filler materials those were worthless from the very beginning unless your some store where people might just buy stuff on impulse since it is cheap. Personally I'm pretty sure it will stabilize and devalue overtime But for really cheap prizes that people want I'm pretty sure most of us are dead by than if it ever comes

As far as the sony market goes say ps1 ps2 I'm pretty sure it will not get that much higher to be fair. your rare good titles games have risen in price but I highly doubt we will see any major increases in them prices.

Your suikodens tombi's etc will not get any higher if it would I would be quite suprised.

Also if we would make a chance for those uber cheap prizes within a short amount of time for the normal good stuff.

The retro indi scene has to die, Nintendo has to go bankrupped and sega etc will not make those compilation games anymore as far as some examples go.

If that happens we might see a faster decrease in value for those potentially cheap prices or at least some substantial decrease for those less than 50% prices.

[hoshichiri]

Every year we have this thread, and every year the only thing that changes is what happens to be the hottest thing at the moment. (Which right now seems to be GameCube.)

Been at this hobby for 20 years, I've only seen things go up, not down. While comics (which was mentioned before) have fluctuated up and down a lot (also a big comic collector, and comics are hotter now than they were in the 90s even).

I have my fingers crossed that the mythical crash will happen one day, but I'm not giving up hope on it.

I blame the clone systems, and the virtual console.

The biggest thing to kill the market will be lack of interest. The Atari market died out after a spike when I was in middle/high school becuase it got harder & harder to get and play the games, so people quit trying to.

The 8 & 16 bit runs will come down eventually- but they're being propped up by new products that make the games easily accessible. Couple that with gaming youtubers waxing nostalgic online, and we're seeing interest kept up beyond what the original hardware could do. (plus, once something has value, people don't want to let that value go.)

[98dgreen]

It won't be a crash it will be a slow decline

[sworddude]

Also let's imagine if a crash were to happen. Some of the rare stuff but also allot of the sought after stuff will be allot harder to find like the topic starter said I will agree with that.

Let's say that even titles as hagane and wild guns cib have devalued to only 50 $ cib in excellent shape cart only maybe 20- 30 those are the pretty rare games.

Your contra's super metroids etc 20$ cib and only 10 for them lose carts. allot of the uncommon good stuff will also be very cheap.

For those prices It's not even worth it to sell allot of that stuff. In that case most collectors will hold on to it why bother.

The reason that people and even collectors might consider to put those earthbounds and panzer dragoon saga's for sale is because you actually gain a nice amount. and also the middle ground of good items sell for a nice chunk.

Obviously for the really rare stuff for such value I'm pretty sure collectors will not sell those if they are worth maybe 100 tops.

resellers will leave the markets but all the stuff is in collectors hands and since even the best stuff is pretty cheap there is almost no reason to sell those copies since the small amounts  won't do as much.

If prices really get low I'm pretty sure allot of the good stuff will be quite hard to get. Than again deals from people who do not know what they have might be easier to get since obviously the interested people would be far less but  those will run out at some point however if the demand of people for the cheap prices are still there the market and those fleamarkets and deals will stay pretty nice and clean and just as hard get. market will be filled with mediocre titles or trashed.

[cirno]

Hey I'd take 20-10 dollars for a random retro game I happened to have lying around, even if it sucked compared to before.

There'd certainly be less people selling them but they'certainly be around, people need money

[sworddude]

Hey I'd take 20-10 dollars for a random retro game I happened to have lying around, even if it sucked compared to before.

There'd certainly be less people selling them but they'certainly be around, people need money

People need money but those haganes and wild guns are in collector hands not for sale especially for those low prices those will rarely come up and your chances of getting them are just as low even if they are allot cheaper.

Also the 10 - 20 bucks depending if cib or not only applies for the good stuff super metroid secret of mana contra actraiser etc. your uncommon less know good games will be worth even less These are the good games they will not be put up for sale since it isn't tempting at all the people who are interested in this hobby will not sell these anytim soon.

Your random retro games will be trash worthless just a few $ like right now only sellable in solid bundle since only full set collectors or people who buy evferything cheap are interested in those.

For those low prices many will be looking and if they do come up many will still be left empty handed. The more common games like contra will also be allot harder to find yes people who just want to get rid off stuff will sell them but because it is cheap many might go after the same lots.

Atm even if that european castlevania symphony of the night one is one of the best games on the ps1 even collectors will sell it since it goes for 150 + easily It's very tempting to sell the CE goes for even a hell lot  more. Just imagine if the european copy would only be worth 20 - 30. Would you still sell such an great item. It is pretty rare I have not seen many in non collectors hands those will vanish from the markets with such values I'm pretty sure of that.

Just imagine the same thing for a panzer dragoon saga why would any collector interested in this hobby sell it for 30$ if it is that hard to get. Some people might sell them but the market will not have many copies for sale they might pop up very rarely especially if they all end up in collectors hands wich have a normal income those low values will not make to much of an impact to be fair.

[bikingjahuty]

It won't be a crash it will be a slow decline

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