Collectible prices skyrocket, to the dismay of hobbyists

NEW YORK (AP) — Americans have become obsessed with collectibles, bidding up prices for trading cards, video games and other mementos of their youth. The frenzy has brought small fortunes to some, but a deep frustration for those who still love to play games or trade cards as a hobby.

Among the items most sought after — and even fought over — are the relics of millennials’ childhoods. These include copies of trading cards such as Pokemon’s Charizard and Magic: The Gathering’s Black Lotus as well as Nintendo’s Super Mario Bros. game cartridges. Some cards are selling for hundreds of thousands of dollars and an unopened Super Mario game recently sold for an astonishing $2 million.

This is more than a case of opportunistic collectors looking to cash in on a burst of nostalgia triggered by the pandemic. Everyone seemingly is angling for a piece of the pie.

The corporations who own franchises such as Pokemon are rolling out new editions as quickly as they can print them; internet personalities are hawking the products and raking in advertising money; companies that tell collectors how much their possessions are worth are doing unprecedented businesses — and in at least one case getting financial backing from a prominent private equity firm looking to get in on the action.

But while some collectors and investors see dollar signs, others complain about the breakdown of their tight-knit communities. Players looking to play in-person again after the pandemic are unable to find the game pieces they want; if the pieces are available, prices have gone up astronomically. Critics of rising prices have become targets of harassment by those who now consider trading cards, comics and video games no different than a stock portfolio.

“Prices are going up, and access is going down,” said Brian Lewis, who operates a YouTube channel under the name Tolarian Community College.

The collectibles frenzy has been fueled partly by a self-fulfilling cycle of YouTube personalities driving hype around collecting and the rising prices of collectibles. This can lead to big paydays as advertisers notice the frenzy stirred up among the influencer’s dedicated followers.

With more than 23 million subscribers, Logan Paul made several videos where he simply opens up boxes of vintage Pokemon cards, hyping the prices he’d paid and bringing in millions of views. Australian YouTube personality Michael Anderson, who goes by the moniker UnlistedLeaf, has garnered millions of views doing similar videos.

“It may be a burgeoning industry, but this is still big business. Brands want to reach these audiences,” said Justin Kline, co-founder of Markerly, an influencer marketing agency. Based on standard industry metrics, he estimates Anderson earns upward to $50,000 in advertising revenue doing unboxing videos, while Logan Paul may earn six figures per video.

The hype has sent collectors scrambling to find out if their Pikachu, Charizard, Mox Emerald or Ancestral Recall cards might be worth a fortune. To do so, they turn to grading services, which have been flooded with orders.

The grading service Beckett’s has effectively stopped accepting any cards to grade unless the customer is willing to pay $250 per card for its ultra-fast turnaround service typically reserved for the costliest collectibles. The turnaround time for basic grading services is more than a year, the company says.

In response to record demand, companies are releasing new versions of the games, including premium products that command higher prices. Whether the momentum is sustainable, at least when to comes to prices, is unknown. Other fads like Beanie Babies or Pogs blew up in the ’90s only to crater, leaving most collectors holding worthless junk. Pokemon and Magic have been around for decades, and have seen surges of interest before.

In the meantime, auction companies and grading companies are making fortunes riding the current speculative frenzy.

Based in Portland, Brian Lewis produces several videos a week under the nickname “The Professor,” in hopes of teaching new and existing players about his favorite hobby, Magic: The Gathering. With more than 600,000 subscribers, he also comments on the state of the game, particularly the issue of rising prices, both on the secondary market (cards purchased from shops) as well as the prices companies are charging for products like Magic.

“I worry deeply that these rising prices will have an impact on the average person’s access to the game,” he said. “There’s a growing class of investors in Magic, and I think it’s not having a positive impact on the game.”

But the frenzy goes beyond trading cards. The U.S. Mint released a 100th Anniversary collection of the Morgan silver dollar, considered by coin collectors to be one of the most beautiful designs ever made, early this summer. The products sold out in minutes.

Three weeks ago, an unopened copy of Super Mario Bros. for the Nintendo Entertainment System sold for $2 million, making it the most expensive video game sold. Only a few weeks earlier, a copy of Super Mario 64 sold for a then-record $1.6 million. An unopened copy of Nintendo’s Legend of Zelda from 1987 sold for $870,000 in early July.

Some members of the video game collecting community have questioned whether the prices paid have been exaggerated by the involvement of third parties like Rally, which sells “shares” in collectibles.

Meanwhile, the trading card community is seeing its own lofty prices as players scramble to find coveted pieces for their collection.

A mint condition Black Lotus from Magic: The Gathering’s first set known as Alpha, sold in January for more than $510,000. That price is double what a card in similar condition sold for six months before in July 2020.

Austin Deceder, 25, primarily buys and sells cards on Facebook and Twitter as a middleman between players wanting to get out of their games and new players. Based in Kanas City, he now travels the country buying collections as his full-time job, having to balance his enjoyment of the game with now being involved financially.

Deceder had a used Black Lotus card that he says he sold for $7,000 in September 2020. “Here we are now and the price on that same card has doubled.”

It’s not just the ultra-rare cards seeing inflation. Take the widely available Magic: The Gathering card named “Ragavan, Nimble Pilferer.” The card, depicting a bespectacled monkey sitting on a hoard of treasure, was $30 earlier this summer. The card now sells for closer to $90, Deceder says, as game stores have reopened after the pandemic.

“Now that people can play in person, card prices are moving up again,” he said.

Not everyone is happy, however. Some enthusiasts say the frenzy has brought out the worst in fans and speculators. Nowhere is this more evident than among collectors of Pokemon cards, with its motto “Gotta Catch ’Em All!”

The frenzy in Pokemon began late last year when Logan Paul did his first unboxing videos, which only led other content creators to make similar videos and collectors to bid up prices on cards new and vintage, said Lee Steinfeld, 34, a long-time collector in Dallas who does videos, including unboxings, under the name Leonhart.

“That’s when things went super crazy,” he said.

Since then, boxes of Pokemon trading cards have been routinely sold out at hobbyist shops and big-box retail stores. Fistfights have broken out, requiring chains like Target to restrict the number of packs an individual customer can purchase. The Pokemon Company says it is trying to print as many cards as possible to keep up.

“Pretty much the entire Pokemon community has deteriorated,” said Shelbie, a creator of Pokémon videos under the name Frosted Caribou on YouTube.

While most of Shelbie’s content features unboxings or discussions about upcoming products, one of her most popular uploads was an hour-long video focused on the problems in the Pokemon collecting community since the frenzy began last year. Shelbie, who declined to give a last name to avoid being a target of harassment, said some harassment in the past has come from some of the community’s biggest collectors, particularly when she has talked about prices.

Later this year, Pokemon will be releasing a set to celebrate its 25th anniversary. While typically an anniversary set would garner interest from any collector, this time Shelbie said she’s hesitant.

“The set is going to be amazing. It’s also going to be impossible to get. It’s going to be awful actually,” she said.

But the surge of interest has been good for the corporations and Wall Street.

Hasbro’s Wizards of the Coast division makes the tabletop role-playing game “Dungeons & Dragons” as well as Magic: The Gathering. Wizards reported second-quarter revenue of $406 million, more than double year-ago revenue. Hasbro executives told investors in July they would soon be raising product prices. Wizards has introduced premium packs of cards with harder-to-find game pieces that sell for four to five times more than a regular packs.

Wall Street has also ridden the wave of interest. Private equity giant Blackstone purchased a majority stake in Certified Collectibles Group, a company that grades collectibles like trading cards, in July for $500 million. The company has doubled its employee count since last year and is buying another 30,000 square feet of office space, President Max Spiegel said.

Whether that’s good for the players who have long participated in these hobbies is unknown. Long-time collectors likely stand to make money in the future, but those who recently entered these communities may be purchasing overpriced cards hyped by those who stand to benefit the most, community leaders said. It’s not unlike the stock market craze that drove prices of GameStop and other “meme” stocks higher earlier this year.

“There’s now a whole subculture who are using Pokemon as a stock market. I don’t know how those people can look at the community and say this is healthy,” Shelbie said.