Retro gaming bubble, and how deep are we in it?

[tdp]

Hi all,

 

I believe that retro gaming is now officially an asset bubble. If it was about experiencing original classic Atari games on the original console, adding it to your collection and then sharing information and pictures about the console and/or games - adding something to the community - cool. But these devices are being flipped, like assets. So, again I firmly believe we are deep in a retro gaming bubble. Not a high-end one like houses. As in, the ramifications will not mean that you have to sell your car, or you will loose your house. But in time, there will be people that will have a stack of investments (sorry... games) that they paid insane prices for, and will not be able to recover that ... investment.

All the classic bubble hallmarks are at play here. Lets look at the classic 5 steps of a bubble:-

1) Displacement - This is when investors (as apposed to fans of retro-gaming due nostalgia, preference to the different older-style of gaming experience, the type that will add to the community, not just ask how much is this item worth-types, etc..), become interested in this "new" potential revenue stream.

We are now seeing more and more people "express" an interest in retro-gaming devices and software. More and more people are aware of this, and more opportunities become available for people to invest (take) or fuel (add) to the growing retro-gaming market (like the NES/SNES mini classic for example).

2) Boom - Prices rise very slowly at first, and then BOOM!!! That game you was looking to get, that was only a couple of quid, is now 10's of pounds (and that is just for starters). And then momentum kicks. Like a stone rolling, the prices keep on rising, and at an accelerated rate. This is the boom phase. Those of us that have been playing old consoles for years, will have seen the prices of these consoles fall when they were originally superseded, and then start to rise (gently as wear/tear/damage - just the ever reducing stock of these devices/games happens) over time. But until the last few years, those increases have always been pretty gentle. Also, a key factor of this phase is recognition. Playing old consoles, or retro-gaming, is now "a thing". When you have news media, that is normally total divorced from the subject matter starts giving the "new asset" wide coverage. You seen the articles:- That old console in the attic could be worth 100's!!!!!! Top 10 games what used be worth pennies, but are now worth 100's. These are all indicators.

Remember how many property programs popped up on TV during the housing market boom? This breeds the attitude "fear of missing out on that once in a lifetime investment" (NES classic anyone?). It also breeds the air of competition. Someone proudy shows their recent acquisition of the "rare" blah blah blah game. It's not a good game, but only a small number were produced. This also really drives prices up. But this uniquely gets other previously savvy retro-gaming collectors spending more than they normally would. Before they would have a spending cap of X per game. This cap slowly creeps up to Y, and then Z etc.. This is rocket fuel to the boom phase. This also increases the number of retro-gamers (investors).

3) Euphoria - In this phase, with free flowing credit and a some-what level of economic security, (and the fact that alot of people that grew up with these consoles are at the age where they may have disposable income) caution is thrown to the wind. The mindset moves to "gotta get them all" before someone else does, and miss out an opportunity to flip for a profit. Prices in this phase sky-rocket even further. You then start to get "market experts". They talk up the market. You've seen game X on eBay, been watching, debating if you should get it or not. You then see You-tuber ILUVRETROGAMESCOZTHEYAREKEWL99SAUSAGE talking about game X. Before you have finished watching the video, you check again on eBay, and the price has gone up because this popular You-tuber mentioned it, and maybe used the word rare at some point. These experts fuel the market, fuel desire, competition. This drives down levels of rational thinking. This also breeds and feeds the "greater fool theory". This theory works on the prinicple, that it doesn't really matter how much I spend on X, because there will always be a "greater fool" that will buy it off me .... for more. During this phase, you will see the introduction of new, weird and wonderful valuation measures and metrics (e.g. PlayStation one release model (SCPH-1001) is now known as the Audiophile due to having RCA presentation and a slightly better DAC - a term that has been used to greatly exaggerate the value of the console in the mind of the lesser researched/informed "investor"), all touted to justify the relentless rise in asset prices.

4) Profit taking - At this point, anyone who "is into retro-gaming" as an asset, and have the smart money mentality, will start cashing out. Impressive complete collections start becoming more and more available. This is because the "smart money" is heeding the warning signs. They are "selling out" and taking profits (which is being provided by the "greater fool") while the profits are available. If someone that would normally be completely divorced from gaming suddenly starts showing interest and some level of newly acquired savvy regarding the asset (like grandma suddenly knowing the difference between her sons old heavy sixer and a light sixer that she found in the attic), saturation point has been breached.

You will see record levels of fakes at this time. And even good ones too, as the prices they can potentially sell for, justifies the extra effort from the counterfeiter. We are talking about it gets to the point that near expert levels of appraisement is required.

At this point, I want to talk about the "mythical" scalper. A scalper does not exist per say. What does exist is someone with more contacts, money or savvy than you to get the item you want, or got it sooner, thus cheaper than you. And then having the savvy to know that they can charge an inflated price when they decide to flip that item. Look, if everyone decided they will not spend more that £55 on a NES classic, how long to do think the "scalpers" would try and charge £200? If the "greater fool" exists, then greater prices exist.

At this point, the bubble of choice has hit saturation point, it can then only take even a minor event to prick the bubble. But once pricked, the bubble is not likely to inflate again. That event could come in any shape or form. Unlike the housing, where is it some what clear what elements can cause a down-swing in the market, in retro-gaming, it harder to predict. A general loss of interest? A better more exciting (read - new) "investment" comes along, maybe? The Ataribox proves to be WAY better than anyone thought (100% perfect 2600, 5200, 7800, STe and Jaguar emulation?), thus killing the desire for anything else? Serious down-swing in the general economy (that makes people focus on the essentials, not frivolous). Retro-gaming stops being "hip". Fakes and badly repaired/modded hardware (you know - that "eBay mint" console that looks worst than an out of date dog's dinner)? It could be all of these or just one or two. It's hard to call. But the realty is that we are seeing a bubble grow, and it will pop. And when it does, phase 5 bites down.

5) Panic - If you are collecting retro-gaming equipment for the love of it and not an asset (e.g. you was doing it before it became a thing - you know when it was just called gaming or playing on my old Atari), this is the only stage that doesn't adversely affect you. In fact, this is the phase you will like. If you are in it for the profit, and you are still in it at this point - whoops!! In the panic phase, asset prices reverse, and hard. And often (as history has shown) at a more ferocious pace. Coming down far faster, that when they were on the rise. Investors at this point will flood the market in attempt to find that one last "greater fool" to buy at an apparently more reasonable price. The problem is, at this point there are no more "greater fools", just the "greatest fools" fighting to get as much back as possible, reducing their loses on a cartridge that they bought at the height of the market for £200 for example, and are now not getting any response on trying to sell it for £30.


So that is my take on this subject. I think we are clicking from phase 3 into phase 4. And boy are we going to see some crazy when the SNES mini classic comes out. All the people that "missed out" of the first with the NES, will be on a mission (impossible mission?) to get one. Competition, desire and a complete lack of rational thinking is gonna kick in.

Anyway, just by reading this, you can tell I am NOT even close to being an expert. This probably reads more like the mussing of a mad man. But I'm a fan, and I find things like this interesting and fun to discuss. So please let me know if you agree, disagree. I would really love to read your thoughts/ideas on this? Is this something we what to happen? It would make prices cheaper, but then you will be less likely to get devices like the NES/SNES mini classic and other ideas that can make retro-gaming interesting.

Looking forward to reading your thoughts.

[Thomas Jentzsch]

Why should real fans care for those who are here to make money or just follow the latest trend? I couldn't care less.

[Flojomojo]

Deep thoughts, I'll read it later. My gut reaction to the topic is

 

This deep

[up2knowgood]

Ooh, bubble go pop!? Sweet, maybe after it does I can get a boxed copy of Wolfenstein 3D for a good price. Oh wait, this the 2600 channel. Sweet, maybe I can get a boxed copy of Secret Quest for a reasonable price after it pops.

[BassGuitari]

I dunno, but I can't wait for all these long-time collectors who are suddenly so gung-ho about emulation and SD carts to start unloading their waste-of-space collections and flooding the market.

[Professor Gull]

I have just one alternate thing to say on this as thoughts.

 

I am an investor (stock buyer) as a hobby. I gauge what stocks I will buy off of potential market needs and upswings through historical data and world going ons. Even the best folks take gambles at times and sometimes come out better than others. But even when picking viable investment opportunities. Here is a good example.

 

So Hurricane season gets predicted and I wonder about looking for something to buy into. I find a neat little business called Patrick Industries who manufactures interiors for like mobile homes and RV's and the like. Ok I make that choice 1.

 

Another company catches my eye in the meantime as a biopharmaceutical specializing in new ways to fight diseases and the like.

 

To me both look like good potentials. Hurricanes are destructive causing both loos of home and loss or good health so I buy in to both.

 

The biopharmaceutical dumps I bought at $3 a share and they went under I had only bought 50 shares though. Patrick Industry though flies through the roof as I bought 100 shares at $15 and sold them finally at $45.

 

Moral of this brings about what is a good investment and I really still tend to see retro games still more niche as a volatile market. Yes you have history and figures but I would still stray to call it an "investment". I would honestly only picture money mongers for the quick sell to get into this market and even now its too late pretty much or so it seems as prices are capping. Remember the investors biggest market buyers are collectors for the most part and that is not a necessity environment but a luxury so I would tend to feel this is more of a small market to delve into.

 

Now let the game hurricane commence.

[DrSidneyZweibel]

I have just one alternate thing to say on this as thoughts.

 

I am an investor (stock buyer) as a hobby. I gauge what stocks I will buy off of potential market needs and upswings through historical data and world going ons. Even the best folks take gambles at times and sometimes come out better than others. But even when picking viable investment opportunities. Here is a good example.

 

So Hurricane season gets predicted and I wonder about looking for something to buy into. I find a neat little business called Patrick Industries who manufactures interiors for like mobile homes and RV's and the like. Ok I make that choice 1.

 

Another company catches my eye in the meantime as a biopharmaceutical specializing in new ways to fight diseases and the like.

 

To me both look like good potentials. Hurricanes are destructive causing both loos of home and loss or good health so I buy in to both.

 

The biopharmaceutical dumps I bought at $3 a share and they went under I had only bought 50 shares though. Patrick Industry though flies through the roof as I bought 100 shares at $15 and sold them finally at $45.

 

Moral of this brings about what is a good investment and I really still tend to see retro games still more niche as a volatile market. Yes you have history and figures but I would still stray to call it an "investment". I would honestly only picture money mongers for the quick sell to get into this market and even now its too late pretty much or so it seems as prices are capping. Remember the investors biggest market buyers are collectors for the most part and that is not a necessity environment but a luxury so I would tend to feel this is more of a small market to delve into.

 

Now let the game hurricane commence.

I believe the technical term for this kind of profiteering is "ghoul".

Edited August 2, 2017 by DrSidneyZweibel

[Thomas Jentzsch]

I believe the technical term fro this kind of profiteering is "ghoul".

[towmater]

Let's use an analogy of Fleischer's Popeye collectors... The product came out in the 1930's, peaked in collector interest in the 1970's, and now has almost vanished. So the lesson in that case is about 30-40 years.

 

However... Disney product originated in about the same time, and is still being collected.

 

So perhaps the longevity of such collecting is extended by the company being ongoing; harvesting, so to speak, a newer generation of collector.

[Professor Gull]

I believe the technical term for this kind of profiteering is "ghoul".

Yup fine line between Savvy and Ghoul though.

 

Now if I offended anyones sense of morality here just please note I don't do these types of investments anymore and have also contributed funds for recovery though direct donation methods as well. Not just support of Red Cross or some other fund mongers who take $1 and only give 20 cents to the community.

 

Business is a dirty one at that and so can retro game hoarding and price gouging.

[zzip]

Is it possible that "retro" got popular because new tech got so boring? Some people love gadgets and there use to be lots of cool new gadgets, but now our phones are doing almost everything, and every new phone is just a minor incremental improvement on the old. So people are looking elsewhere for their gadget fix?

[up2knowgood]

Is it possible that "retro" got popular because new tech got so boring? Some people love gadgets and there use to be lots of cool new gadgets, but now our phones are doing almost everything, and every new phone is just a minor incremental improvement on the old. So people are looking elsewhere for their gadget fix?

You make it sound plausible to me anyway. I mean, I only got an Xbox One for Halo.

Edited August 2, 2017 by up2knowgood

[DrSidneyZweibel]

Is it possible that "retro" got popular because new tech got so boring? Some people love gadgets and there use to be lots of cool new gadgets, but now our phones are doing almost everything, and every new phone is just a minor incremental improvement on the old. So people are looking elsewhere for their gadget fix?

Current gen gaming systems are now just minor incremental updates on the previous system as well. I have no desire at all to upgrade past my PS3, and I didn't buy that until they were dirt cheap, and hackable. I spend more time playing Retroarch emulators on my PS3 than actual PS3 games

[ubersaurus]

The bubble has already shrunk and cooled down for Atari 2600-era games. Even when it cools for NES and the like I wouldn't expect too big a drop in prices, more like a leveling off.

 

And even then, like... look at early comic books. There are some of those that go for tons of cash, and others that don't (based on rarity, importance, etc.) so there's no reason to think video games won't follow that same path. Maybe only hardcore collectors want a Bally Arcade, but anyone interested in video games will probably want Super Mario Bros, Legend of Zelda, etc. and something to play it on.

[Flojomojo]

It's hard to differentiate between "new tech being boring " and us getting older and more jaded. Once you've been through a few console cycles, it's difficult to get up the urge to start from scratch with a new library, dealing with the trickle of new releases at full price -- especially when you're probably sitting on a backlog of stuff you once thought you wanted to play. Like up2's Halo/Xbone above, I mostly seem to gravitate towards new versions of old things I have liked in the past.

 

Are we talking about a "bubble" in terms of overall popularity of old stuff, or just financial value? I am dimly aware that some dumb shits collectors will pay big bucks for old and hard-to-find SNES cartridges, and that their "value" is going up. I also feel that Virtual Console and hardware reproductions like SNES Mini are pretty popular.

 

There's definitely a finite supply of old "vintage" cartridges. I also think there's a finite demand by people willing to try old games. These things will sort themselves out. I sure wouldn't speculate on games as a way to make money, but the known "rares" will hold their value for a long time.

 

My philosophy, which isn't particularly helpful in answering the question, is this: I like games that are fun. Sometimes they're old. I'll pay for them if the artist benefits from them, but if it's from a long-dead company, it doesn't hurt to "borrow" them in emulation. I'm not going into hock for a cartridge that is 3X more than what it cost at original retail, but I'm somewhat amused by people who do.

[DrSidneyZweibel]

It's hard to differentiate between "new tech being boring " and us getting older and more jaded. Once you've been through a few console cycles, it's difficult to get up the urge to start from scratch with a new library, dealing with the trickle of new releases at full price -- especially when you're probably sitting on a backlog of stuff you once thought you wanted to play. Like up2's Halo/Xbone above, I mostly seem to gravitate towards new versions of old things I have liked in the past.

 

This is increasingly more difficult when you favored platform/brand abandons it's previous backwards compatibility features, and you essentailly have to abandon your old games, or make room for a new console that is independent.

[zzip]

It's hard to differentiate between "new tech being boring " and us getting older and more jaded. Once you've been through a few console cycles, it's difficult to get up the urge to start from scratch with a new library, dealing with the trickle of new releases at full price -- especially when you're probably sitting on a backlog of stuff you once thought you wanted to play. Like up2's Halo/Xbone above, I mostly seem to gravitate towards new versions of old things I have liked in the past.

I sometimes wonder if it's just being jaded. But we really don't have the exciting tech products that we used to. In the 80s home consoles were new to many of us, as were those little Mattel electronic football/Simon type electronic games. Then came home computers, then better computers that could actually do real work portable Gameboy/lynx. In the 90s multimedia PCs- CD-ROMs, DVDs, realtime 3D game worlds. 2000s- Digital music players, PDAs/Pocket PCs/ Flatscreen TVs, Tablets/ Smartphones. 2010s- smartphones, smartphones, smartphones- does everything those old products used to.

 

The most exciting things I got lately are Rpi's- but unless you have a specific embedded application in mind for it, they are just like slower PCs. And VR, but today's VR doesn't quite feel immersive enough yet.

 

Look at music for a parallel, we used to collect our music on Vinyl records, then 8-tracks, then cassettes, then CDs, and finally digital. So now our music collections are all in one place, and as a result the act of music collecting has gotten so boring that today's kids have rediscovered vinyl!

 

Maybe todays tech has gotten so boring kids are rediscovering retro too? Maybe this also explains why Switch is so popular, and why Ataribox has gained so much attention.. People are craving something new.

[Mephitblue]

This is increasingly more difficult when you favored platform/brand abandons it's previous backwards compatibility features, and you essentailly have to abandon your old games, or make room for a new console that is independent.

 

Sadly, Microsoft is the only one right now with backwards compatibility. I love my PS4, but I really wish it was backwards compatible with the PS3.

 

As for a Retro Gaming bubble, I think different generations of game systems will go through the stages at different times. Right now NES and SNES are really hot in the collector market, but I could see speculation on carts going down.

[+MrBlackCat]

I'll read the Original Post with focus later... but my first reaction is... sounds like a basis for a game!

"Retro-Bubble!: Don't Blow It!"

"Retro-Bubble: Inflation"

"Retro-Bubble: A New Hope"

"Retro-Double-Bubble!"

 

Ok, seriously though, I don't believe in the idea of hobbies as investments. I view them, weather material or not, as paid entertainment like a movie you go watch. It is spent, it is experienced. I only "lose" if the game isn't enjoyable. Gaming for me isn't a fad, investment, and isn't socially driven. If gaming or game collecting IS an investment for you, then you are at risk as with any investment... I can't loose as I haven't gambled. If I were to ever sell anything I have "collected" then it is pure profit as it was all absorbed when I had more money to spend than I needed to live.

 

More later after I really soak up that post that really deep, or at least long.

 

MrBlackCat

Edited August 2, 2017 by MrBlackCat

[Flojomojo]

Sadly, Microsoft is the only one right now with backwards compatibility. I love my PS4, but I really wish it was backwards compatible with the PS3.

 

And 3DS, which still has a few new games in it. I like the New 2DS a lot, even though it's a downgrade if you care about 3D. It's light, nice to hold, and plays a zillion different games way back to the 2004 DS launch.

[DrSidneyZweibel]

Well, I'm also hesitant to move past my Custom Firmware PS3, because through native Sony OS and Emulators, it's backwards compatible with every console I've ever owned!

[spacecadet]

I don't think you can compare retro games to something like stocks or houses. Those are things with basically infinite supply, and there's always more being made. That's why there can be "bubbles", because supply will always catch up with demand eventually. So those who buy high when supply is tight will get screwed when it evens out.

 

You can compare retro games to other collectible markets of things that are no longer made, though, like vintage guitars or tin toys. Actually I think the guitar market analogy is pretty apt, because major brands do still make new guitars, sometimes "reissues" of the same models, so there are sometimes debates about whether those cut into prices of the vintage ones. But basically, you can't make a "new vintage" guitar - it's one or the other, and the number of real vintage guitars out there only ever declines over time. If demand spikes, supply will never loosen up to even things out.

 

So in collector markets like that, you have a pretty clear price trend line that only ever goes up over time. Sometimes it spikes quickly, and maybe sometimes it declines slightly, but it's not like a guitar that once cost $200 and now costs $20,000 is ever going to be worth $200 again. It may drop to $15,000, but that's still a huge markup over its original price. And with supply ever-dwindling, it'll almost definitely pretty quickly be back to $20,000 again if you just hold on.

 

In order for prices to really drop and stay down, you'd have to expect demand to drop faster than supply. And I just don't see that ever happening with most retro games and systems.

[ubersaurus]

It's hard to differentiate between "new tech being boring " and us getting older and more jaded. Once you've been through a few console cycles, it's difficult to get up the urge to start from scratch with a new library, dealing with the trickle of new releases at full price -- especially when you're probably sitting on a backlog of stuff you once thought you wanted to play. Like up2's Halo/Xbone above, I mostly seem to gravitate towards new versions of old things I have liked in the past.

 

Are we talking about a "bubble" in terms of overall popularity of old stuff, or just financial value? I am dimly aware that some dumb shits collectors will pay big bucks for old and hard-to-find SNES cartridges, and that their "value" is going up. I also feel that Virtual Console and hardware reproductions like SNES Mini are pretty popular.

 

There's definitely a finite supply of old "vintage" cartridges. I also think there's a finite demand by people willing to try old games. These things will sort themselves out. I sure wouldn't speculate on games as a way to make money, but the known "rares" will hold their value for a long time.

 

My philosophy, which isn't particularly helpful in answering the question, is this: I like games that are fun. Sometimes they're old. I'll pay for them if the artist benefits from them, but if it's from a long-dead company, it doesn't hurt to "borrow" them in emulation. I'm not going into hock for a cartridge that is 3X more than what it cost at original retail, but I'm somewhat amused by people who do.

I think if the internet has proven anything it's that there's always new people looking to try older games. Emulation makes that a really easy prospect, and if they like it enough, they'll go out and try and buy the game. I've been to enough game stores and conventions to know that you'll readily find kids today who are out shopping for NES, Genesis, or Super NES games on up. No reason to think that won't keep going, especially since gaming wisdom has accepted that 2d games aren't bad or inferior like a decade back. And nostalgia is always moving forward as younger folks get disposable incomes and seek to grab the games of their youth.

[Flojomojo]

I think if the internet has proven anything it's that there's always new people looking to try older games. Emulation makes that a really easy prospect, and if they like it enough, they'll go out and try and buy the game. I've been to enough game stores and conventions to know that you'll readily find kids today who are out shopping for NES, Genesis, or Super NES games on up. No reason to think that won't keep going, especially since gaming wisdom has accepted that 2d games aren't bad or inferior like a decade back. And nostalgia is always moving forward as younger folks get disposable incomes and seek to grab the games of their youth.

 

I was thinking along the same lines ... when we were kids, all we had to go on was the box art, some magazines of varying quality, maybe the very occasional TV spot (mostly advertising), and our own face to face social networks. Rentals came along in the NES era, which helped a bit, but weren't as risk-free as watching "let's plays" on YouTube.

 

I would like nothing better than to just sit back for a month or two, and do nothing but flip through Retro Gamer on my iPad while dabbling in RetroArch on my laptop, trying as much as I can, playing to my heart's content. The limiting factor for me? It's certainly not a lack of content. When I was a kid, it would have been money, but not really so much anymore. It's time that I lack. Time and attention.

 

You know how we keep seeing the same suites of old games made available via commercial emulation and re-releases? How you can probably guess the contents of the Atari Flashback without seeing a list, how their Activision Edition is going to resemble the Activision Anthology, how Nintendo's plug and play toys largely mimic the Virtual Console, and how Sega Genesis collections are similarly predictable?

 

I think the average retro gamer speculator is subject to the same kind of hype, especially as certain messages (Vintage 2D was great! Must play Earthbound!) are amplified. It's the same hit-driven market as books, music, or films. There's the top 1%, and there's everything else, which is old tat.

[Keatah]

New technology can be frustrating because it is oversimplified. And more restricting. Modern companies cater to the nincompoop more now than ever before.