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In 2021, two classic “Super Mario” games sold for between $ 1.5 million and $ 2 million each.
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The games have each set sales records – and new precedents – in the retro video game collector’s market.
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This market is now overrun with speculators looking to make money.
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On July 12, a copy of the Nintendo 64 classic “Super Mario 64” sold at auction for $ 1.56 million, instantly making it the most expensive video game on the planet.
Less than a month later, he was beaten by a previous entry in the same series: a sealed copy of “Super Mario Bros.” for the original Nintendo entertainment system which sold for $ 2 million.
These prices didn’t just set precedents – they also represented massive price inflation for retro games. “Super Mario Bros.”, for example, had set a previous sales record in March 2019 of just over $ 100,000.
What, in the 18 months between those two sales, caused the value to soar to 20 times its previous sale price?
Enter: market speculators.
The $ 2 million copy of “Super Mario Bros.” was not sold through a traditional auction house, but rather through one of the many new services that are transforming the buying and selling of rare collectibles – like video games, sports cards and cards. comics – in a form of stock exchange.
Users can buy a fraction or “shares” of something like a copy of “Super Mario Bros.” When this copy sells, as decided by the “shareholders”, these shareholder users get paid.
The three main players in this emerging speculative market are Rally, Mythic Markets and Otis. Rally is where the $ 2 million “Super Mario Bros.” has been sold.
Investors, not collectors
Rally initially purchased the “Super Mario Bros.” of $ 2 million. for $ 140,000 at a private sale last summer. The game was then offered in the form of stocks with a market cap of $ 150,000. When it was sold for $ 2 million, investors made a handsome return.
A man who invested $ 100 told The New York Times that he walked away with $ 950 on top of the $ 100 originally spent.
“It’s pretty crazy to think I invested in this because of nostalgia to play video games when I was a kid and now it sells for $ 2 million,” he said.
It’s particularly crazy considering that the game had cost Rally $ 140,000 just 12 months before. The game was still the same, with the same level of quality and the same level of rarity – the only thing that had changed was the market.
Prices for retro games have started to climb, and then to double or more, in recent years. This is at least in part due to so-called “fractional share” services like Rally.
Questions about what drives prices up
The sharp price increases have led to speculation on social media that auction houses may somehow fuel the fervor for retro games.
Yououtuber Karl Jobst, who closely follows the video game subculture of speedrunning, recently accused auction house Heritage Auctions and video game classification company Wata Games of working together to drive up game prices. retro. In August, he posted an hour-long video that has been viewed over a million times and details his speculations.
Wata Games and Heritage Auctions stand to gain from the increase in the price of retro games, as each takes a percentage reduction in a game’s value. Thus, the higher the overall value of a game, the more each company can earn through the appraisal process and subsequent sale.
In the video, Jobst claimed that Heritage Auctions co-founder Jim Halperin helped drive up the cost of video games in 2019 by purchasing Wata-grade “Super Mario Bros” for $ 100,000. At the time, the purchase of Halperin was touted by Wata Games President Deniz Kahn as the most expensive video game ever sold.
Jobst also touched on the history of Halperin in the collectibles trade, particularly in antique coins. He pointed to a $ 1.2 million fine that Heritage Auctions paid to settle FTC allegations that Halperin gave the coins inflated ratings and marketed them through a Heritage-backed company called Certified. Rare Coin Galleries, as Forbes reported in 2004.
Heritage Auctions and Wata Games have denied all allegations of collusion and market manipulation.
“The claims in this video are completely unfounded and defamatory,” a public relations firm representing Wata Games said in a statement to Insider. The press release also indicates that Jobst “has not contacted us to give us the opportunity to correct it”, which Jobst refuted on Twitter.
“Heritage has always acted with the utmost integrity and has never falsely inflated the collectible video game market or any other,” said a statement from Heritage to Insider. Regarding the FTC fine, the company statement said, “Heritage Auctions settled $ 1.2 million to avoid protracted litigation and did not admit any wrongdoing.”
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