The immense magnitude of the video games industry is beginning to be felt on the auction block. Yesterday, a copy of the 1987 NES Nintendo game The Legend of Zelda sold for a record US$870,000 at Heritage Auctions.
The new video game record illustrates just how meteoric the pandemic-induced boom in collectible video game auction prices has been, with the record price leaping 1,160 percent in four steps in just 12 months.
Then a copy of Super Mario Bros. 3 sold for $156,000 in November 2020, raising the record by a further 56 percent just four months later. In April this year (2021), a copy of Super Mario Bros. sold for $660,000, more than quadrupling the record, and yesterday (July 9, 2021) the record hit a new high of $870,000. That’s a 1,160 percent increase in four steps in just 12 months.
The new record is held by a sealed early production 1987 copy of the first game in the ground-breaking Legend of Zelda series, graded 9.0 A by Wata.
Implications for the industry
The auction marketplace for video game cartridges is a recent phenomena, having effectively been kickstarted by well-known retro game dealer DKOldies.com of Pennsylvania when it ran a no reserve auction on eBay in July 2017 for a mint-condition sealed copy of Super Mario Bros. from one of the earliest production runs.
The demand for the Super Mario Bros. cartridge was beyond anyone’s expectations, and after a lot of auction activity, it fetched an unprecedented $30,100.44 and made news on all the games web sites. More importantly, it made people aware that rare retro games in very good condition were worth collecting and considered valuable, at least by some people. That seemingly insane $30,000 investment is probably worth 20 times more today, just four years later.
Our annual coverage of the top 100 technology lots sold at auction for the 2020 auction year noted several significant sales of video games in 2020 and anticipated further records due to the recent emergence of Wata-certified video games in 2019. It turns out we were more correct than we’d anticipated.
When the game auction record reached $660,000 earlier this year, our analysis suggested this trend had not yet fully played out because the value of any object is subject to the laws of supply and demand, and the supply of sealed, pristine 30-year-old games with their hang-tab still in place is minuscule but clearly not non-existent.
We also suggested that because of the ubiquitous nature of video games, the demand from monied-up teenagers of the nineties who now wanted to buy back their youth might be much greater than anyone had predicted. That appears to be the case – while supply is small, the demand is unprecedented and far greater than it is for movie, music and entertainment memorabilia.
Revenues of the global video game industry saw it surpass the global revenues of the music industry and the movie industry more than a decade ago, and it is forecast to grow for the next five years at a compound annual growth rate (CAGR) of nearly 13 percent.
In 2020, video game revenues totaled $159 billion, compared to $43 billion in 2019 for the world movie box office (which retracted in size in 2020) and $57 billion for the music industry.
The remarkable growth in video game memorabilia values appears to have been catalyzed by the pandemic, which saw the richest nation on earth required to stay home and shelter in place for 12 months, but it has really just fast-forwarded what was likely to happen anyway.
It’s also an indication of what is yet to come. Yesterday’s record sale just happened to take place at the first standalone video game auction held by Heritage Auctions, the auction house that dominates the games marketplace.
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