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It’s hard to see my keyboard through all the steam that’s escaped the video game market in early 2022.
While the January Signature Auction at Heritage showed pockets of health and some remarkable results, the numbers in April can’t be ignored. At the high-end, there isn’t the same magnitude of appetite for an auction’s top titles.
This is the third auction in a row that we’ve seen average sales prices at the top of the auction fall by most metrics. Now, that can relate to the grails that have been consigned - for instance, we haven’t seen a truly top-tier copy of a key Mario or Zelda title in the last few auctions. No doubt, those types of sales played a role in the top level strength of July and October auctions. Still, even moving off of the very top of the auction towards the mid-to-high tier (as illustrated by the top 11-50 sales), momentum has stalled, and results continue to trend in the wrong direction.
The news isn’t entirely bad though. For example, it’s clear that the depth of the market has improved. The median sale at the April event was the highest of the last four auctions. The same can be said of the 25th and 75th percentile sales. So, while the high-end appears to have stalled, there is still growing appetite for those games that are priced more reasonably or accessibly.
The number of bidders was up slightly from January, with 895 in April versus 886 in January. Both of those figures are down from July and October peaks closer to 1,000. The same can be said of total bids + registered phone bidders, which were 7,520, up from 6,815 in January, but down from 9,618 in October. Important to note: the number of total lots in April (395) and January (322) were down significantly from October (609) and July (489). If you were to adjust the bidding figures based on the volume of available items, you end up with more comparable activity. So, while values have consolidated rather dramatically, we haven’t seen a commensurate drop in bidders and in activity, which would bode well longer term, indicating that 2021 was not a flash in the pan in every way.
The influence of NES games towards the top of the auction dropped for the second consecutive event. Given that those titles typically draw the largest sums, their lack of representation may have had some impact on the weaker average prices. Sega, Playstation, and Super Nintendo took up more prominent positions.
Speaking of Sega, the headline sale of the auction was the $360,000 paid for a 9.8 A+ copy of Sonic the Hedgehog for Genesis. Consider that a 9.4 sold at Goldin for $420,000 in September, a 9.6 sold at Heritage for $312,000 in October, and a 9.6 sold for $216,000 at Goldin in February.
A Round SOQ, Rev-A copy of The Legend of Zelda graded a 9.2 sold for $111,000, markedly lower than a $180,000 for the same grade and variant in January (and the April copy had a higher seal grade).
On the plus side, records were set for high-graded copies of the likes of Metroid ($168,000), Clu Clu Land ($156,000), Twisted Metal ($156,000), and Mario Kart 64 ($144,000).
Sports video games rode the momentum created by the massive John Madden Football sale in January. This time around, John Madden Football for SNES sold for $102,000, the rental exclusive John Madden Football Championship Edition sold for $84,000, and a later Promotional, 9.6 copy of John Madden Football for Genesis sold for $81,000. Tecmo Bowl couldn’t sustain the levels created in January, when an Oval SOQ copy graded 9.4 drew $144,000; this time, an earlier Round SOQ copy graded 9.2 sold for $99,000.
Sports momentum flowed further down the stack, with record and standout results notched for Kobe Bryant’s NBA Courtside ($33,600), Michael Jordan: Chaos in the Windy City ($26,400), and Jordan vs Bird ($25,200). The previous Heritage high for Jordan vs Bird was $840.
As we’ll review, the results for fractional shareholders were at the very least discouraging on the whole, and that’s the case in spite of the fact that the category has already been soundly devastated in 2022. Year-to-date, the Altan Insights Fractional Video Games Index is down 23%. The lesson? Proceed with caution on IPOs in categories that have run up very swiftly in very short order, particularly when the valuations are at the peak of the market.
Let’s assess the damage.
Heritage (Round SOQ, Rev-A, Wata 9.2 A): $111,000
Rally (Round SOQ, Rev-A, Wata 9.4, B+): $110,000
As mentioned above, this sale was well below the $180,000 result in January. However, fractional markets have perhaps already overcorrected, dropping the higher-graded (albeit with lower seal) Rally copy from $160,000 at year-end to $110,000 today. While this result could serve as a short-term catalyst, the ongoing softness in the title is perhaps reason for concern in the intermediate term.
Heritage (Wata 9.4, A+): $66,000
Rally (Wata 9.4, A++): $75,000
While the 9.6 graded copy of Kart established a new record, the result for a 9.4 was significantly lower than a $108,000 December sale for a 9.4 A+ copy. It’s actually exactly in line with where Rally bought their copy in October. Of course, that still puts the $75,000 valuation at a 14% premium.
Heritage (Wata 9.6, A++): $57,600
Rally (Wata 9.6, A++): $62,500
Rally bought their game at Heritage in October for $102,000. It was offered at $125,000. Suffice it to say: it has not performed well, halving in value. Unfortunately, despite the collapse in value, it remains valued at a slight premium to the result here.
Heritage (NFR, Wata 9.8, A+): $48,000
Otis (NFR, Wata 9.8, A+): $85,748
Rally (Wata 9.4, A+): $50,000
It must be repeated: Otis shareholders cashed out on the initial copy offered fractionally for $301,000. That’s perhaps the best and most out-of-whack buyout result achieved to date. As recently as January, this game sold for $108,000. However, it seems the market has run out of gas for this title. The result also spells significant trouble for the copy on Rally, which is not only lower graded, but is also not of the Not-for-Resale variant.
Heritage (Hangtab, No Rev-A, 9.0, A): $24,000
Rally (Hangtab, No Rev-A, 9.2, A+): $18,600
The Wild Gunman copy on Rally is down over 14% to date. At this valuation, it’s also trading at a 22.5% discount to the result for a lower graded copy at Heritage. As discussed in our population report analysis, Wild Gunman is among the black box games offered fractionally that are in strong stead in terms of supply.
Heritage (Rev-A, Round SOQ, 9.2, A): $21,600
Otis (Rev-A, Round SOQ, 9.2, A+): $16,400
Over the last month, the game on Otis is down 38%, a not uncommon trajectory for video games Despite having a slightly higher seal grade, it sits at a 24% discount to the Heritage result.
Heritage (Oval SOQ, 9.6, A++): $21,600
Rally (Oval SOQ, 9.4, A): $16,000
This sale from the Friedman Collection is up slightly over a $19,200 January sale. It will do little to improve the short-term outlook for Rally’s 9.4, though, which is down 27% since IPO in September. A 9.8 sold for $36,000 in this auction, down from $48,000 in January.
Heritage (Sandshrew, 9.4, A++): $20,400
Rally (Rattata, 9.2, A++): $22,000
Otis (Rattata, 9.6, A++): $46,875
This was a quieter and lower-volume auction for Pokemon games - perhaps as a result of the recent softness. Given that this is a first production, the result doesn’t bode particularly well for either fractional game. The Rally game is down 45% to date, while the Otis game is down 37.5%. The trajectory of the title is catastrophic. In July, the same variant in a 9.4 sold for $132,000. By October? $45,600. Then, $21,600 in January, and $20,400 in April. Perhaps the bottom is being tested and stabilization is on the way given the narrow decline from January.
Heritage (Rev-A, Round SOQ, 9.6, A): $19,200
Otis (Rev-A, Round SOQ, 9.6, A+): $29,500
Rally (Rev-A, Round SOQ, 9.8, A+): $60,000
The result here is exactly half of what a 9.6 A+ sold for last April. Fascinatingly, this game was a relatively early riser, reaching that same $38,400 figure way back in May of 2020. Back in October, a 9.8 sold for roughly 4.5x a 9.6 ($22,800). Of course, the 9.6 is down since, the multiple may have tightened given the high-end softness, and a 9.8 sold for just $54,000 in February at Goldin.
Heritage (First Production, 9.8, A+): $16,800
Rally (First Production, 9.8, A+): $15,500
The game on Rally is down 61.25% since IPO, bringing it presciently in line with the most recent result. July craziness saw a later production of this game reach $144,000, but the market quickly corrected. Still, there was more pain to be felt, as this result is roughly half the value of a January sale of the same game.
Heritage (9.4, A++): $12,000
Rally (9.4, A+): $10,500
This result is exactly half of a $24,000 July sale for a 9.4 A+ copy. The Rally game is down 42% since IPO, and it’s unlikely that this result will cause any short-term bullishness.
Heritage (Sandshrew, 9.4, A+): $9,000
Rally (Rattata, 9.4, A++): $10,560
Otis (Rattata, Rating Solid, 9.4, A): $8,000
This game peaked at $26,400 in July. Since then, the rout has been on. This result of course raises some concerns for the Rattata variant on Rally, even more so for the later production copy on Otis. The fractional copies are down 56% and 20% respectively.
Heritage (Rev-A, Round SOQ, 9.6, A+): $6,000
Otis (Rev-A, Round SOQ, 9.6, A+): $10,400
The $6,000 result here is down from $8,400 in January, which is down from $13,800 in October. The Rally game is down 42% since IPO in September, but still trades at a substantial premium to this result. There aren’t any copies of this game graded higher, which begs the question of what the floor might be.
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