Welcome to Video Games Insider for 21st December 2021 – FREE version.
We use Moneyball tactics to discover undervalued, mispriced, and hidden gems in Fractional Investing.
Table of Contents
Video Games in 2021
Turns out last week was a dead cat bounce as video games continued their slide into the end of 2022. The asset class is still up around 75% for 2021 but nowhere near the heady days of…October.
Last week’s performance
Fractional secondary markets
There wasn’t much to like about last week as every asset class in the video games space was either flat or down. NES games and Gameboy games have the biggest representation in the index, and they were two of the three biggest losers on the week.
At Auction
The biggest sale was a copy of Donkey Kong Classics graded WATA 9.8 A++. According to WATA’s population report, there are four more of these in the wild with none graded higher. It sold for $12,500.
That was a decent result against previous sales at Heritage in 2021:
Those auctions suggest a 25% gain for the game since August and 100% since July. This makes DK one of the only titles to have appreciated since the summer. It’s possible that collectors assumed there were more of these copies out there, and the recently-released population report from WATA confirmed the cartridge was scarcer than first believed.
A copy of Sega Genesis Mortal Kombat II sold for $1,300, and I’ll talk about that a bit more below.
This Week
Fractional IPOs
Otis releases two new video games into the wild this week. The galaxy’s most popular video game of all time, and NBA Jam.
Minecraft Xbox 360 Wata 9.8 A++
- Market Cap: $27,800
- Inferred Value: $22,000
- Platform: Otis
- Date: 12/21/2021
- Recommendation: [INSIDERS ONLY]
NBA Jam Sega Genesis Wata 9.8 A++
- Market Cap: $32,800
- Inferred Value: $31,000
- Platform: Otis
- Date: 12/21/2021
- Recommendation: [INSIDERS ONLY]
Secondary markets
One new game started trading on Rally this week – Wild Gunman, one of the original NES Black Box games. It began the week at an audacious $100k market cap but has declined to $48k (at time of writing). Our inferred value is around $50k for this copy.
Last week, we sold two prior recommendations as our thesis flipped on blue chip video games subsequent to the most recent Heritage Auction. We currently have three games still in our recommendations list, all on Otis:
- Nintendo World Championships – target share price $26
- Punch-Out!! – target share price $44
- Metroid – target share price $1.11
For full disclosure, in my personal portfolio, I currently own:
- Legend of Zelda on Rally – I’d exit if there were enough liquidity
- Metroid on Otis
- Mario Kart 64 – This is now oversold – will add a buy recommendation today @ $8.50/sh
- Mario Bros on Otis – This is starting to look attractive again under $20/sh
At Auction
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.
Heritage is running their weekly auction today with just such a copy currently sat at $840. This could very well surpass the figure above, but typically we’d expect something at this level with 13 hours to go to end up around $1,500 or so.
Keep an eye on it if you’d like.
From a personal nostalgia point of view, the WATA 9.6 A++ copy of Perfect Dark for N64 looks good at $456, but that’s only because I played the heck out of it at Uni.
