Friday, April 25, 2008

Effect of New Releases on Out-of-Print & In-Print Game Prices

NPD released the March 2008 video game sales data this past week, and God of War Chains of Olympus and Final Fantasy VII Crisis Core were the 5th and 6th best selling games during the month. We showed earlier that new releases raise the used prices of other games in the series, but this is a perfect chance to look at the price changes for old games that are out-of-print vs games that are still in-print.

Both God of War and God of War II for Playstation 2 are still being printed by Sony, but Final Fantasy VII for Playstation 1 is no longer in print. Do the prices of out-of-print games increase more with a new release compared to in-print games?

God of War Series
God of War Chains of Olympus was released on PSP on March 4th. In general you can expect some number of people who played the new game to want to buy one of the older ones. I am sure this happened with God of War, but you wouldn't be able to tell by simply looking at the prices for the original games.
God of War Price Chart
God of War 2 Price Chart
God of War's price has stayed very steady in the high $8 range for the last three months. God of War II's price dropped significantly during April because the game was added to the PS2 Greatest Hits line so the new price dropped to $19.99. This lowered the used price of the game too.

These charts make it pretty clear that any price increases for God of War series games were damped by the low prices for brand new versions still readily available at retail. People could go buy the games new and didn't have to resort to buying the used versions online.

Final Fantasy VII
Final Fantasy VII Crisis Core was released March 25th in the US. Anyone wanting to play the original though had to buy the game online because Square Enix no longer sells the game at retail. This caused a huge spike in the price.
Final Fantasy VII Price Chart
Final Fantasy VII went from an average price of $61.80 in March to $73.16 in April, more than an $11 increase in one month.

Its basic Econ 101. The supply for out-of-print video games can't increase but when the demand increases the prices increase as well. The demand for the in-print games increases too but the supply of games increases as well causing a much smaller (if any) increase in price.

If you are planning on buying a sequel video game in the future be sure to replay the games in the series BEFORE the new one. You'll save yourself some money.

Tuesday, April 22, 2008

Price of 10 Best NES Games Nobody Played wrote an article about the 10 best NES games nobody played. I decided to look at how much those games would cost now so people can play these forgotten treasures on their Nintendo consoles.

Metal Storm: $25-30
Little Samson: $50-55
Shatterhand: $2-3
Secret Ties: Never released. ROM available online
Princess Tomato in the Salad Kingdom: $20-24
Gun Nac: $20-22
Vice Project Doom: $2-3
Clash At Demonhead: $1-2
Mr. Gimmick: No US release. Imports are available for $180
The Guardian Legend: $1-2

You can pick up quite a few of these games for almost nothing. If you still have your NES these would be some great games to buy to get some cheap entertainment. Others are pretty expensive now. $20-50 is quite a bit for just the cartridge of an old NES game. But I don't think any of these titles have a chance of being released on Virtual Console so if you want to try them out you will have to fork over the money.

See Complete NES Price List

Monday, April 21, 2008

2008 Price Predictions Follow-up

Earlier this year I posted my predictions for some specific games and what would happen to their prices. This is a follow-up to see how I did so far and why I might have gotten the predictions wrong.

Devil May Cry 3 Cover ArtFebruary - I predicted Devil May Cry games, and Devil May Cry 3 specifically, would increase in price because DMC 4 was released in February. All three Playstation 2 Devil May Cry games increased in price from January to February.
Devil May Cry - Went from $6.00 in January to $7.99 in February, a 33% increase
Devil May Cry 2 - Increased from $5.50 in Jan. to $7.91 in Feb, a 44% increase
Devil May Cry 3 - $8.00 in Jan to $9.75 in Feb, a 22% increase

Super Smash Bros Nintendo 64 Cover ArtMarch - I predicted that Super Smash Bros on N64 would drop in price in March because the price was high in January. The timing was wrong on this prediction though. Smash Bros on Nintendo 64 dropped almost $3 from January to February, but increased about $1.50 in March. Since my prediction was for a price decrease in March, I guess I am officially wrong.

So far I got the February prediction right and March wrong. I'm shooting 50% so far. It looks like my April prediction of Grand Theft Auto price increases is going to be correct (GTA San Andreas for Xbox and GTA Trilogy for Xbox have increased quite a bit), so hopefully I will have a 66% average next month.

Wii Game Prices | Xbox 360 Game Prices | Nintendo 64 Prices

Friday, April 11, 2008

The IRS Cares About Your Video Game Collection

I need to start off with a disclaimer. I am not a tax professional. This article is based upon many hours of research I have done into the tax code. But, taxes and tax law are not my main area of expertise. You should consult with a tax professional before using any of the information presented in this article.

Your video game collection could save you money on your taxes. If the IRS considers you a video game investor instead of just a collector, you can deduct expenses related to your collection and lower your tax bill this April 15. So what does the IRS think you are? A video game collector or investor?

The difference between a video game investor and collector in the eyes of the IRS depends on what your primary purpose is for owning the video games. If you buy the games for personal pleasure only and to play them, you are a collector. If you buy games with the intention of making money, you are an investor. This may sound straight forward, but the IRS looks at many factors to determine your status:

  • Do you keep good records? Investors keep track of what they buy and sell.
  • Do you consult outside advisors? Investors buy magazines and books from experts and ask others for advice.
  • How much time or effort do you expend? Investors generally spend more time than collectors researching, maintaining, and tracking their video games.
  • Can the assets appreciate? You can't be an investor if you have no chance of making money.
  • Have you made money from this activity before? Investors will probably have made money at some point previously in the same manor.
  • How much fun do you get from your purchases? Investors buy more for monetary value than personal pleasure.

None of these factors determines your status by itself. The IRS looks at all of them and decides what you are. If you look like an investor, smell like an investor, and sound like an investor, you must be an investor.

The biggest difference between a video game investor and a video game collector tax-wise is the investor can deduct expenses related to their video game purchases (IRS Section 212), while video game collectors cannot (IRS Section 262). An investor can write off video game magazine subscriptions, storage costs, insurance, cleaning costs, and other expenses related to their investment.

Below is a list of do's and don'ts for video game collectors and investors.

Do's for Video Game Investors

Do Keep Accurate Records of Your Collection
This is the single biggest factor in determining if you are a collector or investor. Investors keep good records of what they bought, when they bought it, and how much they paid for it. Collectors don't. Creating a simple Excel spreadsheet with all this information and keeping it up-to-date is not that difficult but is a must.

Do Know the Value of Your Video Games
You will need to know how much your video games are worth if you want to be considered an investor. Buying a video game value book or looking up your video game prices online will work. It can be nice to brag and say, "My video game collection is worth $5,000" and know its true.

Do Read Video Game Collecting Publications
Reading video game publications, subscribing to video game collecting magazines, or buying video game collecting books help show the IRS that you are a video game investor. You are spending time and money trying to figure out what to buy and know the industry better. Plus you can write off any of these expenses on your tax return. They are investment expenses.

Do Store Your Collection Seperate From Your Personal Games
You can deduct a portion of your rent and heat as investment expenses. Let's say your house is 2,000 sq. ft. and your storage space for the games is 1,000 sq. ft. (I wish I had a collection that big). You can write off 50 percent of your rent and heat because they are expenses needed to house your investment. If you keep all your video games intermixed, collectibles with personal games, you will not be able to deduct storage expenses.

Don'ts for Video Game Investors

Don't Buy New Games and Open Them
I'm not saying you can't buy any new games. You can still buy new video games for your personal use, but do not consider those games as part of your investments. Video games lose value once you open them, much like cars drop in price once you drive them off the lot. That is a purchase for personal use, not an investment and the IRS knows you wouldn't purposefully make an investment lose value. That would be like buying the Mona Lisa and drawing a mustache on her face.

Don't Book Trips to Gaming Conventions Then Call Them Investment Expenses
Be careful about booking trips to E3 and the Tokyo Game Convention and then writing them off as investment expenses. For most video game collectors they probably don't report enough income for the investments to make this acceptable. The IRS has ruled in the past that if your business expenses are a lot more than your income, you are probably not an investor.

Don't Play the Games Then Sell Them
Again, this is fine to do but you are not an investor. If your records show that you consistently buy video games and sell them two weeks later for no profit, the IRS will probably assume you are playing them and then selling them. In that case you are buying for pleasure. You cannot deduct expenses related to personal pursuits.

Don't Do Anything You Are Uncomfortable With
If your gut feeling is you shouldn't be considered a video game investor then don't deduct any expenses.

There was some discussion in the comments section about taxes on the income you make from selling your video games so I wanted to clarify a few points and post one more major benefit to being classified as a video game investor.

This is an exact quote from the IRS Capital Gains Fact Sheet, "all capital gains are taxable and must be reported on your tax return". There is no difference here between a video game collector or investor. No matter what you own, if it increases in value from when you buy it to when you sell it, you are supposed to report that income on your taxes. Here is the good part for investors though:

"only capital losses on investment or business property are deductible"
IRS Capital Gains Fact Sheet

If you are classified as a video game investor, you can deduct the losses from your purchases. Here's an example: An investor and a collector both buy Lunar Silver Star for $50 and Earthbound for $100. A year later they both sell. Lunar sells for $70 and Earthbound sells for $80. Both the investor and the collector report $20 in capital gains on their taxes for Lunar. But only the investor can report the $20 loss Earthbound.

Other Resources:
Video Game Pricing Service
Art Law: The Guide for Collectors, Investors, Dealers, & Artists
If You Collect, the IRS Will Collect From You
12 Tax Tips for Collectors

Handling One Search Result

We've recently updated the search results page on Video Game Price Charts
so that it automatically redirects you to the game page if your search only
returned one result. That saves you one entire click. If you
search for hundreds of games a day, that can be a significant savings.

If you're using a search shortcut in your browser, this change should be even more helpful.


Wednesday, April 2, 2008

Every NES Game Ever Made Costs: $11,388

Complete NES Game CollectionThere is an auction on ebay right now for a complete NES game collection including Nintendo World Championships. How much is a video game collection like this worth?

Using the 90-day average prices from our NES game price list we calculated the cost to buy every licensed game, $6,088. We then added in $5,000 for Nintendo World Championships which is the middle of the price range for the game and $300 for Family Fun Fitness Stadium Events, which is the price the game is listed for on right now. That makes the total $11,388 to buy every licensed NES game ever made.

Is this the price this auction is going to sell for? It could be higher or lower. One the one hand it might close a little bit higher because he has about 25 games that come with the box and instructions which with NES games can be pretty hard to find.

On the other hand there is one BIG problem with this auction: the seller. A look at his feedback shows 4 negatives. Three of those are from selling and they make of 3 of his last 9 sales. My bet is this auction closes for less than $11,388.

The seller's history scares me enough that I won't be bidding, but at least I know how much it will cost me to complete my dream collection. I better start saving now.

Slow Console Pages Yesterday. Fixed Now.

Yesterday morning we added a new service to the console pages on our site that let you see every game available for a particular console and the 90-day average price (for an example see these NES, PS2, SNES, or Wii pages). We gave you the ability to find the current prices on ebay, amazon, or right from that page.

This change though slowed down these pages to an almost unbearable speed. It took us over two minutes to load some pages. We couldn't stand the wait when we were testing. I'm sure you were upset too.

The good news is we think the problem is fixed now. All the console pages load as fast as they did two days ago. The pages still take a little while to load (no more than 15 seconds) but then there is no waiting time for sorting or filtering the data.

Sorry for this annoyance. And Thank You for using our video game pricing site.



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