Welcome to Video Games Insider for January 5th, 2022.
We use Moneyball tactics to discover undervalued, mispriced, and hidden gems in Fractional Investing.
Video Games in 2021
While video games on fractional marketplaces managed to end the year up a stellar 50%, it was a damn site off their highs of 225% in October.
Last week’s performance
Fractional secondary markets
Last week was a very disappointing end to the year as no categories were positive. Overall, video games slumped nearly 11% with Gameboy dragging the index down the most.
It was pretty slow over the holidays, but there is one auction we were keeping an eye on – a WATA 9.8 copy of Mortal Kombat II at Heritage.
Based on an auction the week before, we were targeting a price of around $3k.
Given last week’s sale of a WATA 9.4 A+ version of the game at $1,300, a WATA 9.8 A+ should be valued between $2,700 to $3,300 depending how much of a premium you give to 9.8 as the highest possible grade.
Turns out investors / collectors put quite a bit of premium on the 9.8 as it went for $4,080 in the end.
One other item that caught my eye was an original black box copy of Donkey Kong that sold for $720. It’s only graded 6.5 CIB (cartridge in box…these games weren’t sealed), but a slightly-higher-graded-but-later-production copy sold for $12k just a couple of months ago.
- Market Cap: $125k
- Inferred Value: $45k
- Platform: Rally
- Date: 1/5/21
- Recommendation: Pass [valuation, this last sold for $102k in Oct, and comps have decreased over 50% since then]
Nothing new this week, sorry.
Pretty quiet again this week with only Heritage’s weekly video games and game trading cards auction. There’s not much of interest, IMO, but GoCollect did a write up of it if you’re interested.
Of greater interest is Heritage’s January Signature auction, which is open for bidding now and will close at the end of January.
Some notable games that we’re watching:
John Madden Football WATA 9.2 A+ for Sega Genesis – this was the first console game featuring the recently late coaching and announcing legend. At time of writing (1/4/22), it’s already up to $63k, surely bolstered by the man’s recent passing. Apparently this specific cartridge is from the offices of John Madden himself.
Super Mario Bros. WATA 9.8 A+ (last production run). If this beats $200k, it’ll indicate we’ve hit a bottom for Blue Chip NES games. Currently at $33,600.
Nintendo World Championships 1990 WATA 6.0 Cart only. A WATA 6.5 sold for $85k in late October 2021. Anything above $50k will be a positive move forward. Wherever it lands, the WATA 8.5 version at Otis should be valued at around 10x the WATA 6.0 here. The cartridge and competition themselves have a fascinating backstory with only 116 known to exist. Currently at $32,400.
Halo: Combat Evolved NFR WATA 9.8 A+. This Not for Resale (NFR) version, which is around 3.5x more valuable than the standard copy of this game, is the highest-graded copy I’ve seen. Otis bought a slightly inferior WATA 9.8 A for $84k end of October 2021, and it’s not yet fully funded on their platform. Anything over $100k for this sale should see their copy safely home. Currently at $25,200.
The Legend of Zelda WATA 9.2 A (Rev-A, Round SOQ, early / third production). An identical copy (as far as I can tell) sold for $90k in early December, which was a huge disappointment based on recent comparable sales. It implied a value of only around $110k for the copy on Rally, which is currently trading at $170k at time of writing (again, 1/4/22). So this game’s milestones to beat are:
- $90k to indicate the market’s not collapsed any further
- $140k to justify the current market cap for the copy on Rally
Currently at $16,200.
There will be myriad other data points that come from this auction, but the last one I’ll note is a WATA 9.4 A++ copy of Super Mario 64. I mention it, because it’s germane to the IPO on Rally this week. Just one grade inferior to Rally’s copy (9.4 vs 9.6), if it hits $80k or so, Rally’s market cap will be right on. If it hammers for somewhere around $30k, that’ll put Rally’s copy closer to our valuation. It’s currently at $7,500.