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NYTimes article on graded video game collecting


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48 minutes ago, MiamiSlice said:

Can't read the article because paywall but the URL, title and blurb are enough that I know what it's about: 

https://www.nytimes.com/2020/01/27/us/video-games-wata-heritage.html

Looks like Wata / Heritage landed their biggest media hit yet. 

 

It's worth reading the whole article, NYT does a good job in communicating the concerns from the retro-game collecting community. This article does a way better job at explaining the hype and concerns of the recent sealed collecting craze, than the spate of "yOU cOULD hAVE a $10,000 nes gAEM!" click-bait crap.

I quoted some of excerpts from the article for those who can't read the whole thing:

Quote

Some longtime collectors are pleased, saying video games are an art form that deserves to be recognized. However, other members of this tight-knit community say the higher prices are exaggerated, even if their own collections are now worth far more, and some have raised ethical concerns.

“Market distortion, both legal and illegal, ethical and unethical, is rampant in the art world,” said Richard Lehun, a founding member of Stropheus, a New York firm that provides legal services for the arts community. “Everyone is essentially trying to game the system.”

...

Mr. Hamblin said he was ecstatic to spend only $1,000 on a sealed copy of Teenage Mutant Ninja Turtles, even though it would have cost just a few hundred dollars two years ago. Some speculators visit his store, he said, without properly understanding the industry.

“They are just coming in and buying anything that is sealed,” he said. “To the point where I am saying, ‘Don’t buy this, it is not rare at all.’”

...

“It’s creating chaos in the market,” said Shawn Surmick, who writes a column for Antiques & Auction News. He added, “A lot of these starry-eyed speculators just see dollar signs.”

...

When Heritage brokered a $100,150 private sale of a Super Mario Bros. game last February, it called it the only known copy with a sticker seal still intact. Heritage also said Wata had given the game a grade of 9.4 out of 10, or near mint condition.

But the sale raised ethical questions among some collectors, who flocked to online forums with complaints of inflated prices. At least two of the five buyers are personally invested in Wata, and the game’s previous owner and a buyer are on Wata’s advisory board. That buyer, Jim Halperin, is also a co-chairman and co-founder of Heritage.

 

 

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3 minutes ago, a3quit4s said:

That last paragraph quoted by @Teh_Lurv is full of super shadiness around that SMB sale. 
 

not trying to re-ignite that whole debate though. 

It is all "known information" from the last time it was discussed.

But it is interesting that the article would mention it.

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12 minutes ago, RH said:

Interesting that you guys are reporting a paywall.  I went there and could see what appeared to be the entire article.  Had I printed it, it would have likely been 3-4 pages.

NYT gives one free article per month I believe.

Anyways, I don't have much to add to the discussion. I'm among the downer crowd who are bummed by the transition to speculative collecting. But it was certainly bound to happen.

Wata/Heritage just made it happen quickly and to their benefit, as all businesses strive to do.

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Member · Posted
Just now, DoctorEncore said:

Anyways, I don't have much to add to the discussion. I'm among the downer crowd who are bummed by the transition to speculative collecting. But it was certainly bound to happen.

Well, I'm never one to hope for a recession, but if you can go into one keeping your job and stay gainfully employed, during those periods, these bubbles burst and sometimes price drop momentarily below pre-bubble prices.

So... as any really successful speculator will tell you, buy low, sell high.  If you missed the uptick, we'll probably have another recession in 2-4 years and, at that point, it might be the time to buy.

Again, I don't hope for a recession because it's unbelievably selfish and petty to hope for something that inevitably kills peoples work, but if it's going to happen, that's the small silver lining. People will unload their hobbies for income, and I have a feeling with the next recession, there's going to be quite the crash in game collecting.

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1 hour ago, Teh_Lurv said:

 

It's worth reading the whole article, NYT does a good job in communicating the concerns from the retro-game collecting community. This article does a way better job at explaining the hype and concerns of the recent sealed collecting craze, than the spate of "yOU cOULD hAVE a $10,000 nes gAEM!" click-bait crap.

I quoted some of excerpts from the article for those who can't read the whole thing:

Oh, that's impressive then. Very even handed, good to see something that isn't just puff-piece breathless "wow look at these prices! What could happen next???" Now to figure out a way around this paywall. 

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41 minutes ago, DoctorEncore said:

I'm among the downer crowd who are bummed by the transition to speculative collecting. But it was certainly bound to happen.

The opening line explains it perfectly: baseball cards, coins, comics, etc. have already ballooned into million $ markets, and this is what people are targeting next. I saw this article on another forum where people chimed in with the usual "this is all a bubble, it's pointless, it's going to crash hard, blah blah" and it wasn't worth chiming in to disagree. Video games are art, they are culturally relevant, just as much as comic books or sports at this point, and I think the market is already mature enough that this isn't going to all end up being worthless (even if there are boom and bust cycles). 

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or read here

 

Collectors Are Spending Thousands on Video Games They Will Never Play

Interest in factory-sealed video games has soared in the past year, and collectors have been able to quickly flip the most coveted titles, making a substantial profit.

Sealed and graded vintage video games for sale at SideQuest Games in Portland, Ore. The market for these types of games is growing.Sealed and graded vintage video games for sale at SideQuest Games in Portland, Ore. The market for these types of games is growing.Credit...Leah Nash for The New York Times

  • Jan. 27, 2020, 3:00 a.m. ET
    • 15

Vintage baseball cards, antique coins and rare comic books, originally bought for pennies, now regularly sell for millions of dollars, sending enthusiasts in pursuit of the next hot collectible: retro video games.

Interest in factory-sealed video gameshas soared in the past year, with some companies aggressively targeting collectors from more established markets. The hottest investments are games for the Nintendo Entertainment System, which popularized characters like Link, Mega Man and Mario in the 1980s.

Collectors have been able to quickly flip the most coveted titles, making thousands of dollars in profit and fueling concerns of unsustainable hype.

One collector, Donald Brock Jr., who runs the website Columbia Comics, said he had spent about $50,000 buying vintage video games since his first purchase in March. One sealed N.E.S. game cost nearly $1,500. He had its condition graded, and then sold it for more than $12,000.

 

The top end of the market has also been invigorated. In September, Eric Naierman, a dentist who had primarily collected sports cards, spearheaded a $1 million purchase of dozens of games, months after video game collectors jointly bought a rare Super Mario Bros. game for more than $100,000. A copy of the original Mega Man recently sold at auction for $75,000.

Collectors say that multiple gold copies of Nintendo World Championships — only 26 were distributed, making it one of the rarest N.E.S. games — have reached the six-figure threshold in private sales.

 
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“You almost can’t pay too much because stuff is going up so fast,” said Josh Hamblin, the owner of SideQuest Games in Portland, Ore., who advises comic book collectors seeking to diversify.

Josh Hamblin, the owner of SideQuest Games. “You almost can’t pay too much because stuff is going up so fast,” he said. Credit...

At $7,000, Contra Force is one of the most expensive games at SideQuest Games.At $7,000, Contra Force is one of the most expensive games at SideQuest Games.Credit...Leah Nash for The New York Times

The surging values have surprised even longtime collectors, who for years were primarily interested in completing their collections that included arcane titles such as Color a Dinosaur, a game for preschoolers.

Mr. Hamblin said he was ecstatic to spend only $1,000 on a sealed copy of Teenage Mutant Ninja Turtles, even though it would have cost just a few hundred dollars two years ago. Some speculators visit his store, he said, without properly understanding the industry.

“They are just coming in and buying anything that is sealed,” he said. “To the point where I am saying, ‘Don’t buy this, it is not rare at all.’”

A game like Super Mario Bros., which was released 35 years ago, can seem like an odd choice for a collectible. More than 40 million copies were sold, according to Nintendo, and Mario had made his barrel-jumping debut years earlier in Donkey Kong.

But collectors have been charmed by a guide to Nintendo’s “black box” seriesthat details 11 variations of the uniform black packaging for Super Mario Bros., including early copies released in New York and Los Angeles that were sealed only with a round, black sticker.

That guide, published last year by Wata Games, which began grading the condition of game boxes, cartridges and manuals in April 2018, sent people scurrying for a variant that previously drew scant interest. Dr. Naierman, the collector who was part of a $1 million game purchase, said he had obtained 20 sticker-sealed games since March.

“It’s creating chaos in the market,” said Shawn Surmick, who writes a column for Antiques & Auction News. He added, “A lot of these starry-eyed speculators just see dollar signs.”

When Heritage brokered a $100,150 private sale of a Super Mario Bros. game last February, it called it the only known copy with a sticker seal still intact. Heritage also said Wata had given the game a grade of 9.4 out of 10, or near mint condition.

But the sale raised ethical questions among some collectors, who flocked to online forums with complaints of inflated prices. At least two of the five buyers are personally invested in Wata, and the game’s previous owner and a buyer are on Wata’s advisory board. That buyer, Jim Halperin, is also a co-chairman and co-founder of Heritage.

Deniz Kahn, the president of Wata, said that transparency was paramount and Wata employees were not allowed to have games graded by the company or sell those that were.

Several industry observers and parties involved in the Super Mario Bros. sale said it was legitimate, emphasizing a competing six-figure offer for the game and rebutting claims of a cabal artificially driving up the price.

“We certainly thought the publicity was a nice add-on benefit,” Mr. Halperin said. “But I don’t think we would have bought it if we didn’t think it was a good deal.”

If retro video games are successfully portrayed as valuable assets, Heritage and Wata both stand to profit as middlemen in the transactions. The companies’ partnership has helped Wata rapidly compete with Video Game Authority, which has graded games for about 15 years.

Since the six-figure sale, Heritage has auctioned 29 copies of Super Mario Bros. for the N.E.S., ranging from $79 to $19,200. It has sold hundreds of games graded by Wata in the past year, including 13 for more than $10,000 each.

The auction house, which charges a 20 percent commission on video game sales, was projected to generate $500 million in revenue last year, according to the market research firm IBISWorld.

Wata has been overwhelmed with demand since the groundbreaking Super Mario Bros. sale as collectors race to determine the value of their games. The company has successfully targeted comic collectors in particular by using a parallel 10-point grading scale, parading top-tier games at comic conventions and highlighting the first appearance of video game characters.

 

SideQuest also sells new and used gaming accessories. SideQuest also sells new and used gaming accessories. Credit...Leah Nash for The New York Times

Mr. Surmick said that Wata brought trust and liquidity into the market but that paying current prices for graded games was risky because it takes years for a market to stabilize.

And surging markets can falter, from tulip mania in the 1630s to the dot-com crash in the 2000s. Those who doubt that video games will retain their newfound value say it is driven by nostalgia that will wane in an era of digital distribution.

When games are graded, they are authenticated and then encased in hard plastic shells to ward off deterioration. A similar process helped accelerate the growth of the comic and coin industries, said Richard Lecce, who buys and sells rare coins and has one of the world’s largest video game collections.

Mr. Lecce, who organized the group of Super Mario Bros. buyers that includes Mr. Halperin, is confident in the investment, trusting that future collectors will care about Mario because the character is embedded in pop culture.

“To me, Super Mario Bros. or The Legend of Zelda are artworks that are far more important than, say, the Mona Lisa,” said Mr. Lecce, who tried unsuccessfully to sell the Super Mario Bros. copy for $1,000,000 in a recent episode of “Pawn Stars.”

But Mr. Brock, the comics collector, urged caution, saying that people entering the video game market need to do their homework because companies like Heritage and Wata have incentives to drive excitement.

“It’s their job to grease the machine and make sure the machine continues to run,” he said, “because the machine prints money.”

 
 

 

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Member · Posted
37 minutes ago, OptOut said:

Yeah, it's a very balanced article, good read! Doesn't really add anything to the narrative for those of us who have been paying attention, but a damn sight better than the last article featuring this doofus:

Screenshot_2019-10-19-17-06-11-22.thumb.png.055dc9a2b8b0c53b660b83bd753ba84e.png

At least he’s a happy looking doofus.

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Thanks for this, it is a good read and I'm equally amazed the NYT had the ability to be open minded, open sided, and showing both ends of the story and not just picking a side to stick with which is their usual shtick.  It does really point out the poor effect of what this is all causing and the big shady level of grease being thrown by the corrupt looking overlap of buyers and board members on highly expensive games between wata and heritage.  Damn right they're invested and looking to build hype, it all benefits them most with those lovely fees in the end.

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I’m surprised that the thoughts on it are generally positive.   I didn’t care for the fact that it seemed to reduce the hobby to speculation and nothing else.    Certainly there’s that element and a discussion of that is fine, but the fact that people love the material in the first place is why those conditions can exist and there was next to no discussion of that. 

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Member · Posted
2 hours ago, Nintegageo said:

I thought it was alright, but as others have mentioned - no insight into things, just a broad overview. I didn't like the Pawn Stars mention though, as he wasn't really trying to sell the game - just advertise.

I think that was the overall intention - a broad overview. It’s good for the general public to know a bit more than just articles on “game A is worth X, then 10X, then 100X.”

It’s an article where you can build on an informed opinion. 

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8 hours ago, Bronty said:

I’m surprised that the thoughts on it are generally positive.   I didn’t care for the fact that it seemed to reduce the hobby to speculation and nothing else.    Certainly there’s that element and a discussion of that is fine, but the fact that people love the material in the first place is why those conditions can exist and there was next to no discussion of that. 

Read the NYT comments for some negativity buddy

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28 minutes ago, TDIRunner said:

Reading the comments of people who don't know anything about video games trying to talk about video games gives me a head ache.  

The internet - the land of outspoken, ignorant experts; yet all the necessary info is at their fingertips.

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