Are Retro Games Overvalued? The Retro Games Price Bubble, Explained

The value of some retro video games can seem somewhat exaggerated, but will this overpricing ever end?

Retro game collecting is a great hobby. Not only do you get to enjoy groundbreaking games from the history of the industry, but you also join a community of like-minded collectors. But, unfortunately, it's not all sunshine and roses when it comes to retro game collecting.

At the time of writing, several scandals have broken around the hobby and there is talk of a retro game price bubble that's about to burst. So, what exactly is going on? In this article, we'll teach you all about the retro game price bubble and why it exists.

What Is the Retro Games Price Bubble?

If you've not already familiar with the term price bubble, this might confuse you a little, so allow us to explain briefly.

A price bubble is effectively a situation in which the value of a particular type of item keeps climbing exponentially. Typically, this eventually results in a colossal collapse when high prices meet lowering consumer demand, otherwise known as when a bubble bursts.

An excellent example of this would be the 90s comic book bubble. In the early 90s, a price bubble formed as investors saw how much money copies of golden age comics were selling for. This caused comics companies to feed the frenzy, producing variants hoping to drive high prices. Then, in 1993 the bubble burst as readers became jaded with what was going on, destroying hundreds of smaller companies in the process.

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What Is Causing the Retro Games Price Bubble?

Like the 90s comics bubble, there are several causes for the sudden increases in retro game prices we've seen over the years. First, there have been a few high-profile cases of standard games selling for insane amounts of money. For example, an unopened copy of Super Mario Brothers sold for over $2 million, despite being typically worth only around £10-20 in most circumstances.

Many accused the companies involved in this and other recent high-value sales of colluding to raise prices. In a Proof.com article, journalist Seth Abramson accused CEO of grading company Wata Games of selling high-value titles for his own profit, and journalist Karl Jobst claimed that Wata and Heritage Auctions had worked together on press releases and interviews to raise the prices of games.

There's also a constant wave of nostalgia going on, which dramatically reflects the price of games. The current wave of nostalgia mainly focuses on the PS2, Gamecube, and Original Xbox era, with prices for some of those systems' games rising as we get re-releases of classic games from the period, such as Super Monkey Ball Banana Mania.

Will the Retro Game Collecting Bubble Burst?

The big question in many collectors' minds is whether the bubble will burst anytime soon. That's a troublesome question to answer. Indeed, with the recent scandals, true game collectors are becoming disenfranchised with collecting.

As more people join the hobby because they think it's an excellent investment, the bubble continues to grow. Finally, when the ratio between collectors and investors hits a tipping point, the bubble is going to burst. Conditions are already suitable for a burst now, but we could wait several years before the bubble bursts for real.

On the plus side, the retro game price bubble bursting will harm fewer industries than most economic bubbles do. The only people who profit from retro collecting are grading companies and auction houses, which have other areas they can fall back on. Most collectors will be happy to see prices come down, as it will mean the ability to buy more pieces for their collections.

The only actual damage done will be to those buying into collecting video games as an investment rather than a fun hobby. To these people, the bubble bursting means potentially losing a lot of money and having a primarily worthless pile of plastic and cardboard they feel no emotional attachment to.

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That's the Retro Gaming Bubble Explained

You should know now precisely what is going on with retro game prices right now, as well as the exact nature of this retro game price bubble. Whether you're a collector already or not, this information should prepare you for the cutthroat world of retro game collecting.

If the risky investment doesn't appeal to you, perhaps you should get your retro gaming fix some other way.

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