Thursday, April 22, 2021

Oh great, now investors are buying video game stocks

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Gamestop. AMC. Dogecoin. NFT. And now some investors are hoping, Pokémon and Mario.

For investors wishing to make risky bets, the next big “Gamestonk” could be a vintage print of Pokémon Yellow. Companies like Rally and Otis (founded in 2016 and 2018 respectively) allow their clients to buy shares of these niche assets, which have fetched astronomically high prices at auction: A copy of Super Mario Bros. sold for $ 114,000 in July 2020, and in November a copy of Super Mario Bros. 3 was auctioned for $ 156,000, making it the most expensive game ever to sell. A combination of scarcity and old-fashioned financial speculation continues to drive prices up, which in turn is gaining more and more interest from investors. The current record is about to be crushed by another rare copy of Super Mario Bros. auction now, which is expected to sell for over $ 310,000.

Apps like Otis and Rally give customers the ability to enter the hot collectibles market without draining their savings in a single game. Otis has established itself as “the culture stock market”, raising over 14 million dollars in venture capital, while competitor Rally recently raised $ 17 million. The Otis app features high-quality footage of immaculately maintained vintage games in crystal-clear plastic, and offers average people the chance to purchase a piece of an item that could, with any luck, fetch six figures at auction. .

Of course, buying a share of a value game is fundamentally different from buying a stock, bond, or commodity. No one’s childhood has been defined by 5,000 bushels of random soybeans, or a tiny percentage of a gigantic society. It’s a crucial part of the Otis sales pitch. He highlights the intimate connection people have to beloved Nintendo franchises like Zelda and Pokémon, arguing that these cultural touchstones will only gain in value over time. A blurb on Zelda on the Otis app explains that it’s “one of Nintendo’s biggest and most successful franchises. Part of its success is attributed to the series’ consistent release cycle that spans each generation of Nintendo devices, further enhancing its relevance. Otis says the success of 2017 Breath of the wild “will likely spark demand for memorabilia from this franchise.”

I want a little piece of the action, so I buy five shares of a pristine sealed copy of Zelda II on Otis, at $ 10 a share. For good measure, I take five parts of a sealed copy from 1987. Against for the NES when it debuted on the app. Why not? They no longer manufacture it and it is in perfect condition. Otis estimates its market value at $ 32,800, an optimistic target based, in part, on recent auction results.

Professionals who make a living from selling vintage games in dusty, cluttered stores in Manhattan’s East Village tend to be skeptical of these great figures. On a sunny, cold day in early March, just a few blocks from Otis’ bright and immaculate showroom, I meet Joe Tartaglia, the owner of 8 Bit and Up, a small store specializing in vintage games. On the front, faded posters of Mario and Luigi and Ash Ketchum from Pokemon cover the windows. Inside, the stale air and dim lighting make it feel like a literal sanctuary: tidy stacks of old cartridges, bulky TVs, weird peripherals for gaming systems I don’t even recognize. vaguely. The carefully maintained neglect dates back to an earlier time for both games and New York City. Tartaglia, who has been in the games business since 2008, did some quick research online when I asked him if I was buying Against at $ 32,800 would be a good investment. Similar rated games were selling for prices closer to $ 1,000 just over a year ago, he tells me. “You’re talking about a year, the price going up by a factor of 15 or more. It doesn’t make sense to me. He suggested that the recent high sale prices could prompt new investors to increase in value. “I wouldn’t want to buy that fucking thing,” he said.

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