If you’re looking for a solid financial investment, video games are probably not it. Your collection is very unlikely to cover your retirement. But if you’re determined and savvy, it’s perfectly reasonable that you could have some success investing in video games, whether that means finding actual financial success, or simply having a hobby that funds itself.
Right off the bat, I should mention that there is a fat wad of controversy around video game “investing.” Part of this is from people that simply want to collect and enjoy games from their childhood, but can’t because game hoarders (shelf collectors, we call them) and scalpers are scooping up all the best games and causing prices to go absolutely nuclear.
But make no mistake–the price of these games was going to rise anyway. In part because yes, some people are grabbing up the best games and keeping them on a shelf indefinitely, but also because games get lost or break over the years, the pool of copies gets smaller, even as interest in the games keeps growing.
For the purposes of this article, investing will simply refer to getting a game while the price is low, and holding it until it becomes expensive. This can happen in a number of ways, some douchier than others, but there are some perfectly legitimate ways to invest in games.
Haters are always gonna hate, but if you feel like pursuing this is worthy of your time, and you’ve got money to burn, you might just pull it off. And at the very least you’ll have a healthy supply of video games to keep you busy while you’re broke.
Investment Strategy 1: Being a Total Jerk
Where there’s market volatility, there will always be investors. But remember that in the world of video games we don’t call them investors, we call them scalpers and they are considered the lowest form of human trash. For casual gamers, scalpers are the literal reason we can’t have nice things.
Speaking strictly from a “cold-hard-cash” point of view, if you decide to “invest” in the next available batch of PS5 consoles by buying out all your local stores, then re-selling them at a massive upcharge, you’ll probably succeed in making some money. Potentially a lot of money.
One major downside to this is that you’re a dick and there’s a special place in hell for people like you.
There’s also the risk that, once you purchase all these consoles, you won’t be able to sell them. Or maybe the day you buy a pallet of PS5s happens to be the day the market equalizes and the demand dries up. It could happen to you. It should happen to you, you ass hat. Please don’t be a scalper.
And at any rate, bulk-purchasing Playstation 5 consoles won’t be easy because every opportunistic scavenging scumbag in your neighborhood will be attempting the same thing. Besides that, you’d have to find a way around store-specific purchase limits, and a pretty good pile of startup capital.
Basically, even if you’re enough of a douche to try PS5 flipping, there’s still a high bar of entry. Your best bet is to buddy up with someone that works at a local retailer. Or work there yourself.
Lucky for you, there’s another way to get into video game investing that doesn’t involve dirtying your hands that way. And you won’t need nearly as much startup capital. But the risk is still there and the returns are much, much, much slower.
The Long Game
If you follow this blog at all, you’ve certainly seen some of our previous game pricing articles. (PS3 Prices Have Officially Exploded, for example.) I’ve been collecting for a long time and I like to believe that there’s a price point for anybody who is enthusiastic about games, and wants to get started collecting.
Unfortunately, the COVID pandemic has taken a massive toll on gaming markets. Prices have gone utterly bonky-bonks as more people sought at-home entertainment in the form of great video games.
Piled onto that fiasco is the fact that a new generation of gamers is waking up to the classics and society is increasingly tolerant of gaming as a hobby for people of all ages and any gender (or no gender, or a combination of genders). Consider the limited number of physical video games in circulation and you’ve got today’s outrageous seller’s market in the world of video game economics.
But as I’ve mentioned many times before, the market value of a video game typically follows a predictable curve. At the time of release, a game will carry its full market value: typically between $40 and $70. Some limited-edition special releases will be much higher. These are the ones that come with a statue or a helmet or… whatever stupid random swag the publisher can scrounge up.
These releases do carry a special value, but I don’t find them to be good financial investments. They are often just the standard version of a popular game (as in, there are millions of copies in circulation), with some extra junk. However, if it’s a game you really like, these will be a great investment for the aesthetic of your gaming shelves. And that’s certainly something to consider.
A better investment seems to be finding really niche games while they’re cheap and holding them till they’re expensive.
This seems really obvious when I type it out, but there is a bit of art and a bit of science when it comes to picking good candidates. And again, where there’s potential profit, there is always risk. Let’s look at one potential scenario.
If you had bought 50 sealed copies of Lollipop Chainsaw as recently as 2019, you would have spent $1,000 upfront. If you’re looking at the chart above, keep in mind it’s showing CIB prices, not new/sealed prices.
Since 2019, Lollipop Chainsaw has increased considerably and now goes for around $100. (Here’s the eBay link to see current pricing.) Assuming you could unload all 50 for $100 each, you’d be looking at $5,000.
Take away that initial $1,000 investment and assume shipping for each unit is $5 and you’re left with $3,750. Look at that: you’re rich!
Or, if you had sold all your sealed copies of Lollipop a few weeks ago when Sony announced closing the PS3 store, you might have gotten an additional $50 or so per copy, for a net total of $6,250!
That’s not bad a bad take-home, I guess. But you’ve also got to consider that the Lollipop Price Pop (killer band name) was an outlier and that kind of price spike usually doesn’t happen. Grabbing up a case of games hoping for a market anomaly is not “investing” at all. It’s just gambling.
Besides that spike, the COVID pandemic has worked independently to drive prices higher than ever. Once people can move about freely again and shopping practices return to normal, prices will stabilize and could possibly even drop (though I doubt it).
Don’t be discouraged. Over time, the average price of pretty much every decent video game rises. (That doesn’t include sports games or anything by Naughty Dog.) But in a normal vanilla market, the inflation of game values takes many years.
The question then becomes, how much profit do you want, in order to justify boxes of unopened video games stacked in your closet for literally years at a time? Well, if you’ve got the money and the time, there might be a more interesting option.
Open a Video Game Store, Maybe?
If you’re the type of person who’s totally fine with having cases and cases of games and consoles stuffed into your closet for years, then maybe you’re the type of person who just needs to start an online store? Or even a brick-and-mortar retail shop close to my house? Yeah, that would be great!
The appeal of just sitting on games and forgetting all about them while they quietly grow in value, then selling them for a massive upcharge is admittedly attractive. But the amount of actual profit to be made, versus the amount of time it takes for those games to mature, versus the amount of space you would actually need to store all of these games, comes out to some mediocre math.
I hope it’s obvious that filling your apartment with unplayed video games for years is not the most effective way to make “passive income.” At that point, you may as well rent a public space, store your games on shelves and put price tags on them.
Running an online store comes with very little overhead beyond obtaining the games themselves. And having a constant flow of games in and out of your possession would be fun as hell. Admit it!
Alas, opening an actual retail store is probably only possible for a very few people reading this. But if you’re one of those people and you’re really serious about making money by selling video games, it might be worth considering making it an ongoing thing.
Collectables and hobby shops don’t usually make the best return on their initial investment, but if you’re passionate about it then why the hell not?! I don’t have a classic game store anywhere near my house. Society needs intrepid entrepreneurs to start stores and arcades to keep me and my family entertained. Shut up and take my money!
Are Video Games a Good Investment… of Your Time?
Real talk: If you’re looking for an investment opportunity to make real money… video games probably aren’t your best bet. There are plenty of ETFs, stocks, cryptocurrency and commodities that could provide much higher and more reliable returns. I’m a big fan of ETFs and their long-term returns. Please do your research though, okay?
But video games are an absolutely phenomenal investment in other ways! Obviously, if you enjoy playing games then it’s a great investment of your time and energy. Gaming provides an escape from day-to-day BS and gives your brain a chance to solve puzzles, sharpen reflexes and focus on something rewarding.
But if you’re as fascinated by the economics of game collecting as I am, there is definitely some opportunity to collect ahead of pricing curves and sell off the juicier bits of your collection as prices go up. I’ve been preaching this for a while and building my PS3 collection ahead of price increases and it’s really starting to pay off.
And if you’re into streaming, Youtubing or blogging or whatever, there’s money to be made by creating reviews and streams. I mean, potentially. So every game you purchase to review is a potential investment into your business of content creation.
I’ll post a few more of my articles below. These will go into greater depth about my theory of investing in video games, as well as give some examples of successes I’ve had so far. PS3 has been hot, but it won’t be for much longer.
Be sure to subscribe to this blog to see when we post new articles. I’m always hunting for the next big deal, so keep us on your radar. Thanks so much for reading and happy hunting!