When I first opened Power Up Gaming we had just over $20,000 worth of retro video game inventory. Now 6 years later we have grown that inventory to well in excess of $500,000. One thing that people don't understand is that the pricing on the majority of games goes up in value so even if I hadn't increased our store inventory, the resell value on those games would have gone up anyway.
To give an immediate example, when we first opened we used to sell games like Super Smash Bros for the N64 for around $50. Fast forward to 6 years later and we can't keep it in stock at $95. This trend of price increases is across the board for all gaming consoles.
To better understand what happens we will explain the cycle of what happens:
- A new games out and sells for $70
- A while later the game starts coming back into game stores as used copies which then sell for less then new.
- Eventually everyone is buying the game used which means the pricing has to come down to keep capturing the high volume of sales.
- Later on down the line the pricing drops to almost nothing and sales decline to almost nothing. Then the game stops being carried by the big box stores and becomes harder to find.
The game that originally sold for $70 has now declined to $5 before being pulled from the regular game store shelves for good. Then the retro video game store owners take over and market this game to their customers. The pricing on this game may be at the $5 that it finished at but slowly it will start to increase.
Eventually, 10+ years later the people that used to play that amazing game want to play it again and go to seek it out. Instead of paying $70 new or even $5 at the end of the cycle for the game, they are looking at paying $15 to $30 and are more then happy to pay it. As that game sits on their shelf in their library, the pricing continues to increase.
Based on my history in the video game industry, I can honestly say that pricing on retro video games goes up an average of 10 to 15% per year. This happens more on Nintendo games then it does Sega, XBOX or PlayStation but it is across the board. When was the last time that you made 10%+ while investing in the stock market?
