9 ms·

As an 80s and 90s gaming enthusiast --and, to a small extent, collector-- I really want to know what the hell is going on here. It doesn't seem that long ago th

As an 80s and 90s gaming enthusiast --and, to a small extent, collector-- I really want to know what the hell is going on here. It doesn't seem that long ago that Nintendo World Championship was going for $15k and I could at least understand that from the confluence of historical significance and rarity, but $1.5M for one of the most sold games in history just because of its condition!? Is this just a symptom of the ludicrous increases in wealth disparity, that someone has $1.5M to throw away on something like this? Or is it some kind of money laundering? Seriously, someone please explain this to me.

rightbyte 5y ago
Probably laundering right?
ganoushoreilly 5y ago
The general thought is that like Higher end Art, it's a form of Laundering / Tax evasion that's now running rampant in the Console Gaming side of the house. It's rather sad, now a lot of classics are being ridiculously priced at used game stores and while i'm all for making money, some of the recents i've seen have been insane price gouges. I saw Panzer Dragoon for Saturn going for 3800 at a used game shop, it was not complete either. I bought a fully complete in box copy for like $380 a couple years back and That was pricey to me.
- AnIdiotOnTheNet 5y ago
  $380 for complete and good condition does sound a bit pricey, but it's within the realm of "I have this and I'm willing to wait for a buyer who wants it badly enough". $3800 is insane. I myself own a couple rare-ish games (none sealed, I bought them to play them), and if they got up that high I'd sell them in a heartbeat. I have a satiator, I don't need a CIB Saturn Bomberman.
  - ganoushoreilly 5y ago
    Exactly, I like owning a few of my favorites. I do have a complete US Dreamcast collection and the vast majority are Sealed. I started snagging them up as soon as the console "failed". I hadn't even noticed the Satiator was out finally! Thanks for dropping the reminder. There goes $250 lol.
- orangegreen 5y ago
  How does one launder money / evade taxes with high end art?
  - lathiat 5y ago
    My naive understanding is it’s a way of transferring money in return for something supposedly valuable. That might really be payment for something else.
    - herbst 5y ago
      Then why would they do it so visibly when they could use quiet assets? IMO that doesnt make sense
  - thebean11 5y ago
    1. Buy for $x 2. Get appraised for $100x 3. Donate 4. Take $100x tax deduction
    - vincentmarle 5y ago
      Doesn’t the tax deduction only apply for 30% of the donation though?
      - r00fus 5y ago
        100x * .30 = 3x value in deductions. You can scale the 100x accordingly to your needs.
    - adventured 5y ago
      That doesn't work. That's the great myth of donation tax dodging that isn't actually true, yet is endlessly repeated. You ultimately - at best - only save a fraction of your donated value, you'd be better off just selling the asset instead of donating it for a fractional tax saving. If that actually worked the top 10% wouldn't be carrying such an outsized share of the nation's tax burden on its shoulders via our very progressive tax system, they'd all be busy dodging all of their taxes via donations. If you really wanted to avoid taxes, you wouldn't donate anything, you wouldn't sell anything. The single best way to avoid taxes in your lifetime, is to borrow against your assets and only repay the borrowing in death. Your cost will be interest (interest rates are ridiculously low today). You could go much of your lifetime without paying taxes, while enjoying the good life borrowing against eg your stock holdings. Warren Buffett has made this point numerous times, that if he wanted to avoid paying taxes during his lifetime while enjoying his immense wealth, he'd just use that approach. Buffett could have taken out a $1 billion loan 30 years ago, had fun with that cash, and paid zero taxes on it for decades (while also not selling his primary asset - Berkshire Hathaway stock - which has appreciated dramatically).
- deleted 5y ago
  [deleted]
- jonny_eh 5y ago
  This completely justifies emulation/flash carts/ODEs in my mind.
  - AnIdiotOnTheNet 5y ago
    They're really great. You can play games on original hardware without having to worry about wearing out moving components or the availability (and therefore affordability) of any given title. Some people balk at the satiator's ~$250 price tag, but I own individual Saturn games you can't even buy with that.
wgerard 5y ago
I read an interesting explanation on reddit somewhere that posited this is the result of a small group of devoted enthusiasts basically wash trading: They sell the games to each other back and forth for extremely high prices to make it seem like there's an insane amount of demand for them, in order to make that a self-fulling prophecy. Whether that's true or not I have no idea, but it's certainly plausible.
- adventured 5y ago
  These game prices are no more absurd than a Mickey Mantle card being worth $20-$30 million (1952 Topps Mantle #311 PSA 9 sold for $5 million not long ago; there are three superior PSA 10 copies which in theory should be worth a lot more, two of which are owned by a billionaire). Consider the global scale and love of video games, Mario, Zelda, etc. Versus the localized scale of Major League Baseball (even if it's in the largest economy) and particularly Mickey Mantle. So why not Mario if Mantle? It makes just as much sense (however much sense that is, granted). Check out what new prospects go for in the baseball card world. A Wander Franco card went for $200,000. This is a 20 year old that has barely played any professional baseball, recently got called up with the Tampa Rays, and hasn't hit well so far (and may just end up as a flop, as these guys sometimes do). So Wander Franco cards make sense, and Mario doesn't? Obviously all of it seems crazy. And yet there it is. You know what else is really crazy? Tesla's valuation. Shopify's valuation. Snowflake's valuation. DocuSign's valuation. And so on. Yeah, I know, those are real companies that have products and services. Ok. I posit that many of those valuations are less sustainable than a 1952 Mickey Mantle card at $5m. And we're not talking a million dollars, we're talking trillions of dollars of laughably over-inflated valuations in the stock market. Mario at $1.5m is not crazier than Tesla at $600-$800 billion. It's all part of the same asset speculation mania. Millions of people out there are paying obscene prices for stocks and it won't end well. And with stocks it's not just some rich person with a toy hobby (because who really cares what that person burns their money on), it's retirement funds, pensions. All loaded up on Coca Cola at 33 times earnings, for a company that hasn't seen any growth in five years, has mediocre prospects for growth, and deserves half their present valuation at best (now repeat that scenario for most of the garbage-valuation blue chips, like McDonald's or Starbucks; check out the valuation on WD-40 (WDFC), an old slow-growth degreaser/lubricant spray company sporting a 40-45 PE; the entire market is like that now, out of its collective mind). These are the consequences of perpetually low interest rates, it has bred a rabid culture of speculation and desperation for any yield or return.
Swizec 5y ago
It is very convenient, for many reasons, if you can call a $1.5m transfer “a sale”. If you can support said price with an auction so the price is supported by a fair market, even better. Legally transferring that much money to another person (and minimizing taxes) is difficult. Art and collectible sales are a convenient escape hatch.
louhike 5y ago
Most collectors of old games do not understand why it was sold that much. Super Mario 64 in mint condition and wrapped is rare, but clearly not often to justify this price. One thing I've noticed though if that people buying a auctions do not always seem aware of the actual prices on the market. I attended an auction recently and bought nothing, as all people in the community I know. Everything was sold for far too mych. We were laughing about it, wondering why people were buying those games at those prices, as we know we could easily get them for far less. I'd be really interested to know more about the dynamics making people spending far too much money like that (misinformation? excitation during the auction?).
theklub 5y ago
Who purchased it? I believe it's an advertisement for grading services/a way to grow the industry.
haggy 5y ago
> A high rating is not enough to guarantee a high auction price - although it helps. Another copy of Super Mario 64 in the same auction with a 9.6 A++ rating sold for a comparatively affordable $13,200 This seems to reinforce some kind of laundering/tax evasion scenario. There is little logical reason for one cartridge to go for $13K and another to go for $1.5mm when both are certified excellent condition. It appears that the one going for far more is a product of timing. Someone needed to move a large chunk of money quickly and decided on the Mario cartridge.
- cinntaile 5y ago
  If the normal buyers are only willing to pay $13k I don't see how it makes sense to pay $1.5 million to launder money. That's a big loss you'll have to take.
  - rightbyte 5y ago
    The seller is a co-conspirator? The loss is only the auction house fee in that case.
    - cinntaile 5y ago
      But if you use dirty money to buy a good, it doesn't magically turn into clean money. A possible scenario could be where the buyer has clean money and wants to pay the seller for services by bidding way too much for a rare game. It doesn't make too much sense though because now your transaction is under scrutiny by the entire world?
      - MiddleEndian 5y ago
        Hiding in plain sight! The perfect plan!
        herbst 5y ago
        Not when you have bazillions of ways to do that without being in plain sight. NFTs seem to better fit this need, and even then I don't get why people always assume it has to do with black money
jfkylymyn6 5y ago
There is no fundamental difference between a very rare old vase, car or game. Someone living in 1950 would also think is crazy to pay 1 million for a 1940 car. Someone living in ancient China would also think it's crazy to pay a lot of money for a cooking pot. People are realizing this, and are basically front-running the market, so the price of future priceless artifacts are rising much sooner.
- MathYouF 5y ago
  This is the answer I fundamentally agree with on this subject. Super Mario 64 for N64 is a part of humanity's cultural and history, and the supply of similar items will only decrease over time. The expected value is possible for several lifetimes from now though, and most rich families struggle to hold onto it forever.
  - krapp 5y ago
    I agree the software is part of humanity's cultural history but the physical artifact of the cartridge is nearly worthless. We could literally mass produce Mario 64 cartridges to exact specifications if we wanted to. You can buy reproduction carts on the internet, cheap. We can't recreate ancient works of art or antique machinery, those are truly unique, easily but Nintendo cartridges are just chips and plastic.
perl4ever 5y ago
>someone has $1.5M to throw away on something like this Your reaction seems pretty normal and all, but your ethical viewpoint seems backwards to me. If they spent $1.5M on something that involved the amount of labor and resources that normally buys, then they threw it away, if it wasn't for the general good. A yacht for instance. But if they spent $1.5M on a collectible with no real use, then they have just exchanged a coupon, basically, for another coupon. They made a decision not to take useful resources away from society that they had a coupon for.
efficax 5y ago
Money laundering is definitely involved in the fine art market but the explanation here is more banal. It's the same thing driving absurd NFT prices: Quantitative Easing policies by the fed have dumped a shitton of money into the equities markets and some people have cash to burn and nowhere to put it. The nasdaq is up almost 200% in 5 years. What do you do with all this extra cash? There's only so much you can spend on luxuries for yourself. For the rest, why not put some into speculative assets which give the small chance of very high returns (crypto, startups, and, apparently, N64 carts).

rightbyte 5y ago

Probably laundering right?

ganoushoreilly 5y ago

The general thought is that like Higher end Art, it's a form of Laundering / Tax evasion that's now running rampant in the Console Gaming side of the house. It's rather sad, now a lot of classics are being ridiculously priced at used game stores and while i'm all for making money, some of the recents i've seen have been insane price gouges. I saw Panzer Dragoon for Saturn going for 3800 at a used game shop, it was not complete either. I bought a fully complete in box copy for like $380 a couple years back and That was pricey to me.

AnIdiotOnTheNet 5y ago
$380 for complete and good condition does sound a bit pricey, but it's within the realm of "I have this and I'm willing to wait for a buyer who wants it badly enough". $3800 is insane. I myself own a couple rare-ish games (none sealed, I bought them to play them), and if they got up that high I'd sell them in a heartbeat. I have a satiator, I don't need a CIB Saturn Bomberman.
- ganoushoreilly 5y ago
  Exactly, I like owning a few of my favorites. I do have a complete US Dreamcast collection and the vast majority are Sealed. I started snagging them up as soon as the console "failed". I hadn't even noticed the Satiator was out finally! Thanks for dropping the reminder. There goes $250 lol.
orangegreen 5y ago
How does one launder money / evade taxes with high end art?
- lathiat 5y ago
  My naive understanding is it’s a way of transferring money in return for something supposedly valuable. That might really be payment for something else.
  - herbst 5y ago
    Then why would they do it so visibly when they could use quiet assets? IMO that doesnt make sense
- thebean11 5y ago
  1. Buy for $x 2. Get appraised for $100x 3. Donate 4. Take $100x tax deduction
  - vincentmarle 5y ago
    Doesn’t the tax deduction only apply for 30% of the donation though?
    - r00fus 5y ago
      100x * .30 = 3x value in deductions. You can scale the 100x accordingly to your needs.
  - adventured 5y ago
    That doesn't work. That's the great myth of donation tax dodging that isn't actually true, yet is endlessly repeated. You ultimately - at best - only save a fraction of your donated value, you'd be better off just selling the asset instead of donating it for a fractional tax saving. If that actually worked the top 10% wouldn't be carrying such an outsized share of the nation's tax burden on its shoulders via our very progressive tax system, they'd all be busy dodging all of their taxes via donations. If you really wanted to avoid taxes, you wouldn't donate anything, you wouldn't sell anything. The single best way to avoid taxes in your lifetime, is to borrow against your assets and only repay the borrowing in death. Your cost will be interest (interest rates are ridiculously low today). You could go much of your lifetime without paying taxes, while enjoying the good life borrowing against eg your stock holdings. Warren Buffett has made this point numerous times, that if he wanted to avoid paying taxes during his lifetime while enjoying his immense wealth, he'd just use that approach. Buffett could have taken out a $1 billion loan 30 years ago, had fun with that cash, and paid zero taxes on it for decades (while also not selling his primary asset - Berkshire Hathaway stock - which has appreciated dramatically).
deleted 5y ago
[deleted]
jonny_eh 5y ago
This completely justifies emulation/flash carts/ODEs in my mind.
- AnIdiotOnTheNet 5y ago
  They're really great. You can play games on original hardware without having to worry about wearing out moving components or the availability (and therefore affordability) of any given title. Some people balk at the satiator's ~$250 price tag, but I own individual Saturn games you can't even buy with that.

wgerard 5y ago

I read an interesting explanation on reddit somewhere that posited this is the result of a small group of devoted enthusiasts basically wash trading: They sell the games to each other back and forth for extremely high prices to make it seem like there's an insane amount of demand for them, in order to make that a self-fulling prophecy. Whether that's true or not I have no idea, but it's certainly plausible.

adventured 5y ago
These game prices are no more absurd than a Mickey Mantle card being worth $20-$30 million (1952 Topps Mantle #311 PSA 9 sold for $5 million not long ago; there are three superior PSA 10 copies which in theory should be worth a lot more, two of which are owned by a billionaire). Consider the global scale and love of video games, Mario, Zelda, etc. Versus the localized scale of Major League Baseball (even if it's in the largest economy) and particularly Mickey Mantle. So why not Mario if Mantle? It makes just as much sense (however much sense that is, granted). Check out what new prospects go for in the baseball card world. A Wander Franco card went for $200,000. This is a 20 year old that has barely played any professional baseball, recently got called up with the Tampa Rays, and hasn't hit well so far (and may just end up as a flop, as these guys sometimes do). So Wander Franco cards make sense, and Mario doesn't? Obviously all of it seems crazy. And yet there it is. You know what else is really crazy? Tesla's valuation. Shopify's valuation. Snowflake's valuation. DocuSign's valuation. And so on. Yeah, I know, those are real companies that have products and services. Ok. I posit that many of those valuations are less sustainable than a 1952 Mickey Mantle card at $5m. And we're not talking a million dollars, we're talking trillions of dollars of laughably over-inflated valuations in the stock market. Mario at $1.5m is not crazier than Tesla at $600-$800 billion. It's all part of the same asset speculation mania. Millions of people out there are paying obscene prices for stocks and it won't end well. And with stocks it's not just some rich person with a toy hobby (because who really cares what that person burns their money on), it's retirement funds, pensions. All loaded up on Coca Cola at 33 times earnings, for a company that hasn't seen any growth in five years, has mediocre prospects for growth, and deserves half their present valuation at best (now repeat that scenario for most of the garbage-valuation blue chips, like McDonald's or Starbucks; check out the valuation on WD-40 (WDFC), an old slow-growth degreaser/lubricant spray company sporting a 40-45 PE; the entire market is like that now, out of its collective mind). These are the consequences of perpetually low interest rates, it has bred a rabid culture of speculation and desperation for any yield or return.

Swizec 5y ago

It is very convenient, for many reasons, if you can call a $1.5m transfer “a sale”. If you can support said price with an auction so the price is supported by a fair market, even better. Legally transferring that much money to another person (and minimizing taxes) is difficult. Art and collectible sales are a convenient escape hatch.

louhike 5y ago

Most collectors of old games do not understand why it was sold that much. Super Mario 64 in mint condition and wrapped is rare, but clearly not often to justify this price. One thing I've noticed though if that people buying a auctions do not always seem aware of the actual prices on the market. I attended an auction recently and bought nothing, as all people in the community I know. Everything was sold for far too mych. We were laughing about it, wondering why people were buying those games at those prices, as we know we could easily get them for far less. I'd be really interested to know more about the dynamics making people spending far too much money like that (misinformation? excitation during the auction?).

theklub 5y ago

Who purchased it? I believe it's an advertisement for grading services/a way to grow the industry.

haggy 5y ago

> A high rating is not enough to guarantee a high auction price - although it helps. Another copy of Super Mario 64 in the same auction with a 9.6 A++ rating sold for a comparatively affordable $13,200 This seems to reinforce some kind of laundering/tax evasion scenario. There is little logical reason for one cartridge to go for $13K and another to go for $1.5mm when both are certified excellent condition. It appears that the one going for far more is a product of timing. Someone needed to move a large chunk of money quickly and decided on the Mario cartridge.

cinntaile 5y ago
If the normal buyers are only willing to pay $13k I don't see how it makes sense to pay $1.5 million to launder money. That's a big loss you'll have to take.
- rightbyte 5y ago
  The seller is a co-conspirator? The loss is only the auction house fee in that case.
  - cinntaile 5y ago
    But if you use dirty money to buy a good, it doesn't magically turn into clean money. A possible scenario could be where the buyer has clean money and wants to pay the seller for services by bidding way too much for a rare game. It doesn't make too much sense though because now your transaction is under scrutiny by the entire world?
    - MiddleEndian 5y ago
      Hiding in plain sight! The perfect plan!
      - herbst 5y ago
        Not when you have bazillions of ways to do that without being in plain sight. NFTs seem to better fit this need, and even then I don't get why people always assume it has to do with black money

jfkylymyn6 5y ago

There is no fundamental difference between a very rare old vase, car or game. Someone living in 1950 would also think is crazy to pay 1 million for a 1940 car. Someone living in ancient China would also think it's crazy to pay a lot of money for a cooking pot. People are realizing this, and are basically front-running the market, so the price of future priceless artifacts are rising much sooner.

MathYouF 5y ago
This is the answer I fundamentally agree with on this subject. Super Mario 64 for N64 is a part of humanity's cultural and history, and the supply of similar items will only decrease over time. The expected value is possible for several lifetimes from now though, and most rich families struggle to hold onto it forever.
- krapp 5y ago
  I agree the software is part of humanity's cultural history but the physical artifact of the cartridge is nearly worthless. We could literally mass produce Mario 64 cartridges to exact specifications if we wanted to. You can buy reproduction carts on the internet, cheap. We can't recreate ancient works of art or antique machinery, those are truly unique, easily but Nintendo cartridges are just chips and plastic.

perl4ever 5y ago

>someone has $1.5M to throw away on something like this Your reaction seems pretty normal and all, but your ethical viewpoint seems backwards to me. If they spent $1.5M on something that involved the amount of labor and resources that normally buys, then they threw it away, if it wasn't for the general good. A yacht for instance. But if they spent $1.5M on a collectible with no real use, then they have just exchanged a coupon, basically, for another coupon. They made a decision not to take useful resources away from society that they had a coupon for.

efficax 5y ago

Money laundering is definitely involved in the fine art market but the explanation here is more banal. It's the same thing driving absurd NFT prices: Quantitative Easing policies by the fed have dumped a shitton of money into the equities markets and some people have cash to burn and nowhere to put it. The nasdaq is up almost 200% in 5 years. What do you do with all this extra cash? There's only so much you can spend on luxuries for yourself. For the rest, why not put some into speculative assets which give the small chance of very high returns (crypto, startups, and, apparently, N64 carts).