A note on investment potential

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A note on investment potential

Post by type-r on Wed Oct 17, 2007 5:54 am

I noticed there was already a topic on this but thought I'd generate some new discussion. For me I look at collecting new/sealed this way:

The feeling you get after waiting for ages for a rare game even in used condition, turns up in new sealed, it is the thrill and excitement in knowing that there may just be a handful of copies out there in the world - and you have one!!

I collect for the Japanese PC Engine. For me the PC Engine was and still is in some respects, well ahead of it's time. On the 30th of this month, it will officially be the 20th anniversary since it's launch. So sometimes obtaining a game that is 20 years old can be very difficult indeed, even if it was very common and popular back then and even more so if the game had a very short print run for example like Magical Chase or Tatsujin. These games can fetch between $100-$150 in used condition alone. Obtaining these games are virtually impossible in new/sealed but if you wait long enough (and that can mean years) and if you are lucky and you pay big, you can get it. There is a great sense of satisfaction in obtaining the seemingly unobtainable.

So for me it is more than an investment - remember up to now, we are only dealing with investment potential. The new/sealed market isn't flourishing yet say as the comic book market where some comics can go for upwards of $100,000. But there is the potential that in the future there will be a "craze" period when retro systems regain popularity and become the must thing to have - that will be the time to cash in!! Smile

So personally, I believe the best investment is having a new/sealed system plus a collection of the most popular games (rare as new/sealed but common in used condition). I don't think collecting an ultra rare game is a good investment if it has bad gameplay or graphics etc. Simply collecting based on rarity is a bad idea. In the future, the majority of people are going to want to play the games that they did when they were younger i.e. ones that they remembered playing in the arcade or on a home system. So I think if you are looking to make a good return in the future, collecting for a popular a system together with a bunch of it's best games probably has a better potential of obtaining a very high premium in the future.

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Re: A note on investment potential

Post by Gemini-Phoenix on Wed Oct 17, 2007 10:11 am

type-r wrote:So sometimes obtaining a game that is 20 years old can be very difficult indeed, even if it was very common and popular back then

I know what you mean! I recently added a sealed copy of Tetris (GameBoy) to my collection. Although probably one of the most common games of all time for any console, a sealed one nowaday's is really rare to find, and you get a very strange feeling holding a barnd new and never before touched or used copy in your hands, despite it having survived for the last 18 years in this condition! You get a sense that someone (Or many people) have taken good care of this, just as you will, and its mere existence is something amazing that only collector's will understand and appreciate ~ To others, it's just "Meh, Tetris", but to people like us it's a link to our past and to how things used to be. 1989 may be a long time ago to some, or not very long ago to others, but for the life of something such as a videogame to remain in this brand new condition for this amount of time is nothing short of amazing! NES or Atari 2600 collector's will experience the same intense feeling to purchase something that has stood the test of time for around two decades (In most cases, this is even before the collector was even born!)

A lot of things have changed in two decades, but to hold in your hands something of the era in the same brand new condition as it was when it was first on shop shelves makes you feel like you have stepped temporarily back in time...

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Re: A note on investment potential

Post by type-r on Wed Oct 17, 2007 9:09 pm

Gemini-Phoenix wrote:To others, it's just "Meh, Tetris", but to people like us it's a link to our past and to how things used to be.


Exactly, and all the memories that brings us of where we were in life at the point in time. And to think it has survived that whole time too. Wonderful. Smile

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Re: A note on investment potential

Post by EvilSamurai on Thu Oct 18, 2007 10:58 am

Just don't do it for the money as if a rare game has a high enough demand, then eventually it will be rereleased and the value of whatever sealed game you paid for the roof for will plummet. Look at Rez, Disgaea, ZOE 2nd Runner, Castlevania: SOTN, and Super Puzzle Fighter II Turbo. Ah, Game Quest Direct is good.

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Re: A note on investment potential

Post by Pascal on Fri Oct 19, 2007 1:56 pm

All GQD rereleases of PS2 games for example have a whole in the barcode on the backside or do not have the hologram seal on top!
So you can see that it is not a first print and so they are absolutly worthless for sealed collector. So there is no price reduction for those games.

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Re: A note on investment potential

Post by DJ Villa on Sat Oct 20, 2007 12:11 am

Personally i'm a massive final fantasy fan like many others, these games are being released and re-released over and over but mostly on different formats, personally i believe this builds up the fanbase and generate more collectors and so will actually boost the price of the originals as more and more people search for it.

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Re: A note on investment potential

Post by Pascal on Sat Oct 20, 2007 12:15 am

yep I agree Villa !
I think a greatest hits version is not a signal for a price reduction of the first print version.

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Re: A note on investment potential

Post by DJ Villa on Sat Oct 20, 2007 12:24 am

I suppose being a greatest hits game means that a lot (i'm not sure how many) of this game have been sold, so some people may think that there are a lot of sealed copeies around but it's suprising how many must get opened... quickly. Take Final Fantasy X NTSC only a few years old and rare nowdays.

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Re: A note on investment potential

Post by HKFAN on Sat Jul 26, 2008 5:16 pm

type-r wrote:So personally, I believe the best investment is having a new/sealed system plus a collection of the most popular games (rare as new/sealed but common in used condition). I don't think collecting an ultra rare game is a good investment if it has bad gameplay or graphics etc. Simply collecting based on rarity is a bad idea. In the future, the majority of people are going to want to play the games that they did when they were younger i.e. ones that they remembered playing in the arcade or on a home system. So I think if you are looking to make a good return in the future, collecting for a popular a system together with a bunch of it's best games probably has a better potential of obtaining a very high premium in the future.

I'm heavily into investing in Japanese videogames, mainly for reselling purposes in JAPAN. Titles must at least meet two criteria:

a) perfectly sealed in new condition

b) COMMON and POPULAR games


ROI is very high. But you have to hold the games a long time (sometimes over a decade) and don't make the mistake of depending on western markets. These are Japanese releases after all and with a few exeptions only Japanese collectors buy at premium prices.


Take care!

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Re: A note on investment potential

Post by pandaholic on Mon Jul 28, 2008 11:25 pm

I would never recommend investing in sealed games, you cant make any decent money on this hobby (is the keyword). Yes, maybe you are lucky and have a chrono trigger saved in your closet from the release date, but that will never happen again, i mean even if you very good at foreseeing the market (ebay) you still will have a very unstable pay, and you wont make more money than if you worked on McDonalds. This is just a very funny but expensive hobby.

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Re: A note on investment potential

Post by MCJD4ever on Tue Jul 29, 2008 1:10 am

Well, most collectors whom I know do not buy and collect sealed games to invest, they do it because they loved these games growing up. That's exactly why I do it...it just so happens that (like thousands of others) I love the Squaresoft RPG games and am a big RPG fan..so, the games that I tend to collect will always have a market.

I do, however, know some people that buy really EXPENSIVE sealed games just for investment purposes...for instance, I know of a collector who was willing to shell out $2500 for a pristine, gem mint Chrono Trigger...now, I love this game. I tried to have a conversation with him about the game, and I asked about the story, and he goes to me "well, I never played it, so i couldn't tell ya!"

That's where I have an issue with game collecting. People who are buying truly expensive games just because they are defined as "rare" and not because they actually enjoyed them when they first came out. But to each his own, I suppose.

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Re: A note on investment potential

Post by striker on Tue Jul 29, 2008 1:55 am

well at first, I was buying games that I truly liked growing up (as you said), and MOST of the games I buy are like this.

However, the odd time comes up that I will see a game I know is hard to find for a very cheap price, even though I've never played the game, it would be dumb not to buy it right??

For eg, I've never played legend of zelda games, but if I saw, say, a link to the past, sealed for 20$ or even 50$ at some garage sale, of course I would pick it up. Wouldn't you?

Now as for paying 2500$, maybe if I played it and I REAAAALLLY loved it, even then probably not, if I never played it definitely not.

And w/ a 2500$ budget, you won't have trouble finding a gem-mint chrono trigger.

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Re: A note on investment potential

Post by MCJD4ever on Tue Jul 29, 2008 2:07 am

striker wrote:well at first, I was buying games that I truly liked growing up (as you said), and MOST of the games I buy are like this.

However, the odd time comes up that I will see a game I know is hard to find for a very cheap price, even though I've never played the game, it would be dumb not to buy it right??

For eg, I've never played legend of zelda games, but if I saw, say, a link to the past, sealed for 20$ or even 50$ at some garage sale, of course I would pick it up. Wouldn't you?

Now as for paying 2500$, maybe if I played it and I REAAAALLLY loved it, even then probably not, if I never played it definitely not.

And w/ a 2500$ budget, you won't have trouble finding a gem-mint chrono trigger.

I agree with you completely Striker! For instance, I also am not that big on the Zelda games like I am with the Squaresoft RPGs (though I loved LTTP growing up). But, about two months ago, I saw a factory sealed, almost mint sealed LTTP Non PLayer's Choice version for like $70.00...and you can bet that I bought it right away!

So I agree, even if you hated Final Fantasy, if you saw a sealed FFIII in a garage sale, you had better snatch it up!

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Re: A note on investment potential

Post by striker on Tue Jul 29, 2008 6:11 am

right on!

And this is why I don't see the point in collecting WHOLE sets.

"I want all the games from (insert old school system) sealed."

Did you play all of these games that you want to collect them? Or is it just an urge to have a complete collection of random stuff? I don't see what value it would have to you if you didn't play it!! Maybe too much money is burning a hole in my pocket? I can understand if they are just cheap and you stumbled across them.

I don't go for stuff just because it has value or just because other people like it. Some of my sealed games are not even worth 10$, others are worth 100$+, but that's just me and everyone likes to collect their own way I guess.

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Re: A note on investment potential

Post by HKFAN on Tue Jul 29, 2008 8:57 pm

pandaholic wrote:I would never recommend investing in sealed games, you cant make any decent money on this hobby (is the keyword). Yes, maybe you are lucky and have a chrono trigger saved in your closet from the release date, but that will never happen again, i mean even if you very good at foreseeing the market (ebay) you still will have a very unstable pay, and you wont make more money than if you worked on McDonalds. This is just a very funny but expensive hobby.

I have to disagree.

E.g. if you'd have bought just the usual common and popular PSOne games released in Japan in 1994/1995 and kept those in sealed condition, you would have made a fortune... If you're in the business long enough it is possible to foresee the market. I cannot comment on the US market though.

Anyway, it is true that you have to pick the right games and such an investment contains great risk. But which investment doesn't?

You are right that investing in sealed games is not intended for making a living. But that's why it is called INVESTMENT - I won't buy articles of daily use with my yield return.

Take care!

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Re: A note on investment potential

Post by Dark Sol on Tue Jul 29, 2008 8:59 pm

I awlays say one thing about game investment : better invest in gas, oil and estate business. You won't make real money on games.

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Re: A note on investment potential

Post by HKFAN on Tue Jul 29, 2008 9:04 pm

striker wrote:
And this is why I don't see the point in collecting WHOLE sets.

"I want all the games from (insert old school system) sealed."

Did you play all of these games that you want to collect them? Or is it just an urge to have a complete collection of random stuff? I don't see what value it would have to you if you didn't play it!! Maybe too much money is burning a hole in my pocket? I can understand if they are just cheap and you stumbled across them.

Maybe some people need complete collections to stimulate their libido. Wink

Being a huge fan of a certain videogame system and planning to collect all games for it is another story imho. That way you can preserve the games you love(d) so much the way they had been produced. If you have the cash, why not?!? :top:

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Re: A note on investment potential

Post by striker on Tue Jul 29, 2008 9:06 pm

of course, if you have the cash you could do it.

If I won the lottery I would do it too.

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Re: A note on investment potential

Post by HKFAN on Tue Jul 29, 2008 9:16 pm

Dark Sol wrote:I awlays say one thing about game investment : better invest in gas, oil and estate business. You won't make real money on games.

Real estate? Prices in the US are falling and falling. Plus real estate is illiquid - you cannot move it nor sell it fast (at a fair price). Maybe games are the more unstable investment over a long period of time. On the other hand I can buy a truckload of games for the price of a house and greatly distribute risk. But I never said I'd recommend it for the average citizen.

Gas and oil? How would you do that as an individual investor? You cannot purchase it directly, you can only trade those with derivates which includes the risk of the issuers bancruptcy. Plus commodity prices fluctuate heavily.

I know that oil is en vogue those days. But interest can diminish quickly, so you never know where oil futures stand in some years. Maybe 200 bucks, maybe only 85...

My sealed Ridge Racer (purchase price <6000 Yen) will still sell for over 100k.


Last edited by HKFAN on Tue Jul 29, 2008 9:23 pm; edited 1 time in total

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Re: A note on investment potential

Post by Dark Sol on Tue Jul 29, 2008 9:21 pm

HKFAN wrote:
Dark Sol wrote:I awlays say one thing about game investment : better invest in gas, oil and estate business. You won't make real money on games.

Real estate? Prices in the US are falling and falling. Plus real estate is illiquid - you cannot move it nor sell it fast (at a fair price). Maybe games are the more unstable investment over a long period of time. But I never said I'd recommend it for the average citizen.

Gas and oil? How would you do that as an individual investor? You cannot purchase it directly, you can only trade those with derivates which includes the risk of the issuers bancruptcy. Plus commodity prices fluctuate heavily.

I know that oil is en vogue those days. But interest can diminish quickly, so you never know where oil futures stand in some years. Maybe 200 bucks, maybe only 85...

My sealed Ridge Racer (purchaser price <6000 Yen) will still sell for over 100k.
The only real big deal in this world are natural resources. Smile And the only real way to make money. All the rest is just a pain in the ass for a very doubtful income. Smile Inflation will eat all profit and marasmus will corrupt your brain while you'll be waiting for your sealed games to give you top dollar. Very Happy lol!

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Re: A note on investment potential

Post by HKFAN on Tue Jul 29, 2008 9:34 pm

Dark Sol wrote:
The only real big deal in this world are natural resources. Smile And the only real way to make money. All the rest is just a pain in the ass for a very doubtful income. Smile Inflation will eat all profit and marasmus will corrupt your brain while you'll be waiting for your sealed games to give you top dollar. Very Happy lol!

You mean top yen. Wink

Fiat money has its downsides, I know. So, natural resources. Ok. Tell me more about it.
How do you get oil and in what place will you store it? You cannot keep your commodities forever. When you sell, what will you be willing to take in exchange? Think about denomination - won't be easy.

Remember the 70s and the two oil crises. Gold, silver, oil all up to record prices. If you'd have invested back then it'd have taken around 25(!!!) years until you finally reached the same price level again. BEFORE inflation! On real terms we are still NOT there.

I don't think sealed games is a better investment than oil or gas. There's always risk involved, future is uncertain. But just because everyone is into commodities at the moment doesn't mean it will be like that forever.

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Re: A note on investment potential

Post by Dark Sol on Tue Jul 29, 2008 9:49 pm

I don't know about other countries. I'm only speaking about Russia. If you have oil, estates or resources - you're a god. Very Happy
lol!

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Re: A note on investment potential

Post by Dark Sol on Sun Aug 31, 2008 11:01 am

http://offer.ebay.com/ws/eBayISAPI.dll?ViewBids&item=270269272283
rarebucky endless greed for investment, 655? huh... you have same game already! nowhere to invest money?? wow. i want to have same problems...

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Re: A note on investment potential

Post by The Imp on Sun Aug 31, 2008 3:43 pm

I thought that I had already said everything that I had to say on this topic in other threads, but I guess I can add a bit more:

> And this is why I don't see the point in collecting WHOLE sets.

Well, I can't say objectively why it is a good or bad idea, but sometimes it makes sense. For example, the Virtual Boy had so few games, it makes sense to get the last one or two if you had decided - for whatever other reason - to get the rest. Also, for example, the NEC console games have such a high quality ratio over the entire system library, it might be a good idea to get them all because almost every game will be worth having. You need some indication of which games to buy; you options are basically: other games in the same franchise; other games on the same system; other games by the same developer; other games in the same genre; games that a friend says are good; games that a reviewer says are good; games that sold well (random unknown people says are good). And, sometimes, games with good boxart/advertizing.

> You won't make real money on games.

I've weighed in on this before. The argument basically amounts to this:

If you can predict the future with absolute accuracy, Video Games can be profitable, but:
1. Even the most profitable game would not be as profitable as other kinds of investments, either dollar-for-dollar or as a percentage,
2. There is no assurance that a given profit can be made over a given timeframe (that is, if I say; you must make x profit within y time, using whichever games you like, it's not a given that this will be achievable even knowing what will increase and by how much and when),
3. If anyone was serious about using games as a raw investment medium without concern for the intrinsic value of the medium itself, they would buy *as many copies as possible of only the most profitable games*; not the games they like, and certainly not only one or two.

Since no-one here claims perfect prescience, all of the above applies to a lesser degree, relative to other forms of investment.

Sorry if I'm breaking people's dreams here, but video games make for inferior investments. Not bad; just inferior.

Point #3 above is very telling. If you knew then what you know now, you'd have bought copies of Chrono Trigger by the hundreds and almost no other game from the same time period, and you'd be required to sell them one-at-a-time to keep the value high. Some of us *do* do this with collector's editions that are almost assured of making money - they're incredibly low-risk, especially immediately after release. But you're still talking not much more than a 100% profit (best case), and even then, you're still rarely talking about more than a $1,000 total profit (securing even one special edition game is tough, hence the inflated eBay value at launch). Not bad for a week's work, but not that great either, and it's a best-case scenario. And ironically, if you could secure enough games to make more money than that, then you might as well just operate a wholesale games store, where you'd make at least as much profit for the same risk.

That does not mean your collection won't go up in value, possibly even by a very large degree. But you won't become the next Warren Buffet by buying video games, no matter how savvy you are, how much capital you have, or what happens to the economy.

Antiques have less short-term risk. Bonds have less long-term risk. Currency has greater short-term profit potential. Real Estate has greater long-term profit potential. Stocks have greater liquidity. Commodities have greater stability. Through hedge funds and similar, anyone can invest in any of these things with extremely small investment capital.

Video Games, sensibly traded, can make okay investments. But if they are being traded *only* as investments, they are inferior to other, established investment vehicles.

Also, one last point about investment fundamentals; if you're not making more profit than the rate of inflation, compounded over the life of the investment, after deducting management costs, then you're not making a real profit at all.

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Re: A note on investment potential

Post by pandaholic on Sun Aug 31, 2008 3:59 pm

Interesting post The Imp.




I just wanted to say one thing:


This whole market, will break, the day a professional forger starts to reseal games. Seriously, there are people forging passports and money, to reseal games is a piece of cake compared to that. I would go as far as to say that there are resealed Nintendo red strip games. Its not very hard to do it. I think this market lacks credibility, therefore normal game collecting is better if your gonna invest.


I mean, shrink-wrap is ridiculously bad, i would never buy a shrink wrap game, mostly because it shrinks and will eventually break, people are sitting on ticking bombs. Second, they are way too easy to reseal.

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Re: A note on investment potential

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