It’s probably fair to say that, proportionate to size, the video game market generated the most headline noise in 2021. Entering 2021, the record for the most expensive game ever sold was $156,000 for a “Bros” Left copy of Super Mario Bros 3. By August, as fractional shareholders know very well, that record was $2 million.
$156,000 -> $2,000,000.
Those who follow the space closely might glaze over that, numb to large sums paid for assets of all kinds, but just sit with it for a second.
$156k seemed like a lot back in November of 2020. I mean, it is a lot today. But by August of 2021, someone happily paid two million freaking dollars for the Hangtab copy of Super Mario Bros on Rally.
Of course, July and early August were the moments that saw the market hit its fever pitch, with huge auction sales and that SMB buyout drawing incredulous conversation across the internet. And what followed incredulous conversation was intense skepticism. And what followed intense skepticism was outright suspicion. Before summer’s end, the space was under fire with accusations of industry malpractice.
Still, while some expected a bloody fall auction at Heritage in the aftermath of that controversy, the market proved resolute. To be sure, gone were many of the huge jaw-dropping sales at the higher end - indeed the average sale price of the top ten lots in October was considerably lower than it was in July. If you treated the $1.56mm Super Mario 64 sale from July as an outlier and removed it though, the two auctions were actually quite comparable in results and overall strength, with the October results even stronger at the high end of the market.
This week’s January Signature Video Game Auction is one of our first opportunities since October to monitor how the market has evolved in the months since. Here are the key storylines we’re watching to better understand if October was the start of weakness or brief consolidation before further ascendancy.
Fatigue for auction frequent flyers
One theme was extremely evident in the October auction: there was fatigue for titles that have appeared frequently at auction over the last year, particularly in variants and grades that are less rare. Among those that showed weakness: late variant NES, Gameboy not graded highest and in later variants, N64 collector’s editions, and N64 not graded highest. You could almost term it a “flight to quality” of sorts, to the extent you can say that about a highly nascent, volatile, and speculative category. Can you? I guess I did, but I don't feel great about it. Still, first productions and the highest known or highest possible graded copies thrived, while those a tier below typically struggled to return to summer highs.
We’ll be watching Oval SOQ NES games that have earlier variants, N64 games below 9.6, N64 Collector’s and Player’s editions, and GameBoy games below 9.8 for signs of further reduced appetite.
Emergence of newer non-Nintendo consoles?
The October auction saw the emergence of key titles on Playstation and Xbox consoles, edging towards and even above the $100,000 mark. First production copies of Resident Evil ($264,000), Tomb Raider ($102,000), and Twisted Metal ($87,000) made waves on the Playstation side, while Halo: Combat Evolved ($84,000) represented the Xbox. While Nintendo consoles have drawn the headlines in the space to date, there appeared to be a growing appetite for the standard bearers of Sony and Microsoft’s consoles. And in the first auction since, that emergence will be put to the test, as copies of the first production Tomb Raider and Halo (Not for Resale) in the same grades are available for sale. Fractional investors will recall that in late August, a buyer purchased Otis’s copy of Halo for $301,000 - an incredible outcome. While nobody will expect that level to be tested, a sale in excess of the October level (where Otis was the buyer) would be bullish, particularly in light of lacking population data on these consoles. Elsewhere, Final Fantasy VI may fall into the fatigue category, as two 9.8 first productions come to auction (one with a B seal), with another such copy having appeared in October, in addition to a 9.8 mid-production, which has similarly appeared on multiple recent occasions.
It feels early to look beyond these consoles to the Playstation 2 and Xbox 360, but there are a few lots to watch for signs of a breakout. Minecraft is currently the most expensive Xbox 360 game Heritage has sold at $26,400 in October, which was graded 9.8 A++. This auction features a 9.6 A+ copy, one of which sold in July for $5.5k. Surpassing that figure and approaching five digits would signal continued strengthening in newer portions of the market…for the right titles. The most paid for a PS2 title at Heritage was $22,800 in August for a 9.8 A+ copy of Call of Duty: Finest Hour, followed by God of War at $16,800 for a 9.8 A++ in July. A promotional copy of the latter is on offer in a 9.6 A+, which seems quite unlikely to threaten either of those levels.
N64 taking a breather
Nintendo 64, even if you excluded the $1.56mm Super Mario 64 sale in July, was one of the only consoles to see its average sales price pull back in the October auction versus July. Titles like Super Mario 64, Super Smash Bros, Ocarina of Time Collector’s Edition, and Majora’s Mask Collector’s Edition all either fell short of summer sales or short of the expectations created by summer sales of other grades. While July may have been a land-grab moment for Nintendo 64 games as the market roared at its loudest, the end of the year was certainly quiet, and there may be a resetting to new, more sustainable levels.
The top result to watch will be the sale of a 9.8 A++ Standard Edition Ocarina of TIme. Back in July, a copy sold for $228,000. We wouldn’t expect this sale to get close, but the outcome should provide a sense of where we sit today. Super Mario 64, graded 9.4 A++, doesn’t have a more recent sale than January of last year, when it sold for $38,400, though how it stacks up against an October 9.0 A++ sale for $28,800 and a December 9.2 A++ sale for $21,600 (notice the more recent, higher grade is lower) will be informative. And in what will likely be one of the biggest disparities from July, Super Smash Bros, graded 9.4 A+, will sell for a significantly reduced value vs the July sale of a 9.4 A++ for $144,000. By how much it exceeds the December sale of a 9.2 A+ at $24,000 will perhaps be the more relevant question.
Can Pokemon stop the slide?
There’s no category more representative of a schism in performance between premier assets and those that are beginning to feel less rare with each appearance at auction. The earliest production of Pokemon Red and an early production of Pokemon Blue, both graded 9.8 A++, drew $156,000 and $116,000 respectively in October. At the highest end, demand still persists, but that’s because collectors can rest largely assured that their copy can’t be topped. Below 9.8, things start to get grim. In July, a 9.4 A++ first production Pokemon Red sold for $132,000. In October, a game with the same attributes, up against the higher graded counterpart above, drew just $45,600. A 9.4 A+ copy of an early production Pokemon Blue sold for $13,200, more than $1,000 below what a 9.2 A+ copy of the same game sold for months earlier.
We’ll soon know just how sustained the strength is at the high end of the market, in addition to whether or not the damage is done for more common variants and grades. 9.8 A++ copies of both of the games discussed above are back on the block (hmm, perhaps not that rare?). A 9.4 A+ copy of the first production of Pokemon Red is also for sale - such a game garnered $45,600 in October, down from $72,000 in April. A 9.4 A+ copy of an early production of Pokemon Yellow comes to auction on a persistent and dramatic downtrend. A 9.2 of that game sold in July for $14,400. Recent sales of the higher 9.4 grade are $6,300 in November and $6,600 just last week.
Population report impact
Wata Games released its first ever and highly-anticipated population report in November of last year, providing a view of the graded population of NES games to date (we broke it down here). This will be the first Heritage Signature auction since that population was released. And with those population figures now available, we’re left to wonder how it might affect demand for games that appear fairly common on a relative basis. The most graded game of all is Super Mario Bros 3, with 237 copies. Just four SMB 3 lots will appear in this auction, down from six in October - so, perhaps the effect is already felt. The key lot to watch is a 9.6 A+ copy of the “Bros” right Oval SOQ TM variant, which is actually among the most rare, with just 10 copies graded, but hasn’t been treated much differently than the highly common Oval SOQ R variant by the market. One sold in October - pre pop report - for $27,600.
Legend of Zelda is the third most graded game overall, and the Oval SOQ TM variant is most common, with 33 copies and four 9.6s. In October, one such 9.6 sold for $156,000, and another comes to auction this week. Is that still a six figure game?
Teenage Mutant Ninja Turtles, with no variants to worry about, is the seventh most graded game, with 99 copies graded and seven 9.8s. An October sale saw that game draw $43,200, and whether the sale of another can measure up this week is worth monitoring.
And what about the other angle - those games that we now know to have comparatively low populations? There are just eleven graded copies of the black box game, Baseball, and one could argue that the very best is coming to auction. It’s not the glossy sticker seal, which has just a population of 1 at a 4.0, but it is a 9.6 copy of a Hangtab copy - the highest grade of any variant. This game stands out as a sleeper pick to steal the show and exceed expectations.
New demand for sports games
With largely concurrent rising interest in both the video game space and the sports collectibles space, many have speculated whether certain key sports titles might see heightened demand in the year ahead. Surely, the rise of the video game market generally will have turned some heads, and the entrance of Goldin into the space creates further crossover potential.
To date, sports games have not frequently commanded the top lot spots at auction, which is perhaps an oversight given the strength and widespread popularity of various franchises. That will not be the case this week, as the highest valued lot ($72,500) at the time of writing is John Madden Football. The game, graded 9.2 A+, is the console debut of the franchise on Sega Genesis, and remarkably, is said to have come from the office of the late John Madden himself. This is the first time Heritage has offered the original game. With Punch-Out!! having previously sold for $312,000, perhaps this won’t set a new sports game record, but the potential for a large result is there.
We already covered Baseball, and further down the list, a 9.8 A++ copy of NBA Jam will look to hurdle a $31,200 October result. At a more attainable level, it will be interesting to see what level a 9.4 A+ later production of Tecmo Bowl draws; a 9.6 A+ sold for $14,400 in April, while an 8.5 A more recently drew $7,800 in December.
Key Fractional Sales to Watch
Legend of Zelda
Heritage (Rev-A, Round SOQ, WATA 9.2 A)
Rally (Rev-A, Round SOQ, WATA 9.4 B+): $140,000
Halo: Combat Evolved (NFR)
Heritage (Wata 9.8 A+)
Otis (Wata 9.8 A): $88,400
Otis (Wata 9.8 A+): $301,000 (bought out)
Legend of Zelda: Ocarina of Time
Heritage (Wata 9.8 A++)
Rally (Wata 9.6 A+): $41,250
Super Mario Bros 3
Heritage (Bros Right, Oval SOQ ™, 9.6 A+)
Otis (Bros Right, Oval SOQ R, 9.6 A): $28,750
Rally (Bros Right, Oval SOQ R, 9.4 A+): $42,500
Heritage (Wata 9.8 A+)
Rally (Wata 9.8 A+): $59,000
Heritage (Wata 9.8 A++)
Otis (Wata 9.8 A++): $32,800
Teenage Mutant Ninja Turtles
Heritage (Wata 9.6 A+)
Rally (Wata 9.4 A): $24,200
Castlevania II: Simon’s Quest
Heritage (Wata 9.6 A+)
Rally (Wata 9.6 A+): $18,000
Final Fantasy VII
Heritage (First Production, Wata 9.8 A+)
Rally (First Production, Wata 9.8 A+): $40,000
Heritage (Mid Production, Wata 9.6 A++)
Otis (Mid Production, Wata 9.6 A++
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