The esoteric world of video game collecting

Surprisingly my best performing investment is not a stock or any other financial asset. It’s actually a video game.

In 2011 I won 3 games in an online auction for US $85. The original listing is long gone, but I still have the email record of the transaction. How lucrative can game collecting be? Well today these 3 games have a combined value of US $1216.

• Disgaea 3 – $13
• Eternal Poison – $150
• Rule of Rose – $1053

That’s a 1330% return on investment in 10 years. 🙂

Why is Rule of Rose so expensive? The game tackles uncomfortable subjects like childhood trauma, animal cruelty and psychological abuse. The contentious themes even got the game banned in the United Kingdom and Australia. But suppression only garnered more interest for the product. Due to a limited number of units sold, controversy surrounding its release, and a dedicated fan base – Rule of Rose has become a highly sought after game.

How I started video game collecting

I’ve enjoyed collecting games since I was a kid. If I had a lousy day at school, coming home to play games was a great way to console myself. 😎 Every time my family moved I would take my games with me.

In 2009 I began collecting unopened new in box, or NIB games. I was browsing my local Walmart and stumbled across Final Fantasy V Advance for $30. It features a fun combat system and is one of the better titles in the series. This was a piece of gaming history that I wanted to own. So I bought it and kept it unopened, hoping it would increase in value.

Today the game is selling for $175 on eBay. It looks like a winner. 🙂

My hobby quickly expanded. I add new titles to my collection every year. Games are like mini time capsules of art, culture, passion, and technology all conveniently packaged into portable boxes. Each game I acquire is a labor of love. Today I have over 100 games. Most are factory sealed. Here’s a sample of my collection. 🙂 You may recognize a few titles.

If you want a closer look at some of these titles, I share close up shots in this YouTube video below. I also discuss different stocks and ETF options to consider if you want to invest in the video game industry as a whole.

Video game investing

There’s a lot of overlap in the decision make process between picking games and picking stocks. In either case you have to conduct your due diligence, and watch for risks such as low volume in the secondary market. Games have critics while stocks have analysts. Both are there to help you evaluate the purchase. Inefficient markets create opportunities for knowledgeable individuals to exploit mispriced assets. 😀

Warren Buffett says his favorite holding period is forever. He was referring to stocks of course, but this sentiment resonates strongly with game collectors as well. In fact, my investor’s mindset and tendency to hold appreciating assets may have been initially rooted in my passion for game collecting. 🙂

How to buy the right games

I can write a separate, in-depth post about this topic if anyone’s interested. But for now here are the top 3 things I look for in games when considering their organic collectability.

1. A captivating story, or memorable characters.
2. Unique or revolutionary in some way, whether that be technically, artistically, or functionally.
3. Limited supply of hard copies. And likely to have demand in the future.

Games can be found anywhere. I’ve built most of my collection from Best Buy, Amazon, eBay, Craigslist, Walmart, and Futureshop (RIP). Those bargain bins can sometimes hold rare titles too. When buying games online you have to be careful of scams or bootlegs. But they’re usually easy to spot and avoid.

Recent additions to my collection

Here are some games I have picked up over the last few months.

• Hollow Knight – 2018 Switch ($50)
  Funded through a Kickstarter campaign. Only 250,000 units shipped.
• Ori and the Will of the Wisps – Collector’s edition 2020 Xbox One ($65)
  Gorgeous looking game. Sequel to Ori and the Blind Forest. 🙂
• The Liar Princess and the Blind Prince – Storybook Edition 2018 PS4 ($54)
  It’s quirky, fantastical, and lore filled. My 15 year price target for this game is $250.

Investing in a game collection

The exciting world of collectables can be very rewarding. There are online communities dedicated to this hobby. But at the end of the day it’s hard to recommend collecting games as a solid investment strategy.

In terms of financial returns most investors are better off putting their money in a low cost, diversified index fund. Game collecting should be about the passion for the medium first. Future price appreciation is just a bonus. 😉

Most released games will not even keep up with inflation. So you have to be selective about what you buy. This requires a genuine interest for gaming and nuanced knowledge about the collectables market. For example you have to know that when old Nintendo consoles become obsolete, consumers Switch. 😄

If you grew up playing games it’s possible you have a collection as well. Maybe you have a rare gem stashed away somewhere in storage. Before you sell any old games make sure you understand their true value.

Even used games can be valuable if they’re in demand. For example a used copy of Super Mario 64 goes for nearly $200 now. You can use tools such as pricecharting.com to figure out how much your game is worth today. Do you have any fond memories playing games?

Maybe you have a classic title lying around somewhere.

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Random Useless Fact:

Most artists don’t make a lot of money.