Selling Pokemon Game Cards, An Investment?

An insider's opinion on the long-term collectibility of the Pokemon Trading Card game.

I am a co-founder of a corporation that specializes in the collation and retailing of collectible card games including this little Japanese cardboard addiction. One of the questions that I most often receive from parents (other than "is Magic satanic?"), concerns whether or not Pokemon is a good financial investment.

The answer to this question is a tricky one - it's a good financial investment in the sense that if you were to buy a ton of it and then sell it immediately for a decent profit (around 30% over wholesale - 10% over retail) - then it's most certainly a good investment. Think of Pokemon as a kind of junk bond - everyone's very excited about this product for a very short term - if you buy at the right time and sell quickly, you won't be sorry. Day-trade.

You might be sorry, however, if you have decided to buy a safety deposit box in which to stash your foil Charizards and Hitmonchans. As much as Pokemon may be a good value investment for the short term, they are most definitely not a long-term blue-chipper.

Understand that a card's collectibility depends on two factors - are people playing the game - and are people collecting the cards independent of the game? If a card set satisfies this criteria (take Decipher's Star Wars CCG for example) - it has not only an instant appeal, but staying power. Dr. Who CCG is a game that was so poorly conceived and executed that the only remaining audience for it is the legion of Dr. Who collectors. On the other side, Heartbreaker's Doomtrooper card game was a game infectuously playable, but printed in such colossal quantity that no one is collecting it - you're likely to trip over a complete set walking down the street. In both cases (Dr. Who and Doomtrooper) - the price for an unopened box of boosters hovers between $2.00 and $7.00.

Striking a balance between perceived scarcity and playability is a difficult thing. Pokemon, a simple game to learn and play, is still enjoying a perception of rarity due in no small part to the glut of kids wanting to "collect them all" - that slogan and ethos, by the by, is one of the more stunningly unethical in the history of children's entertainment. As a wholesaler and retailer, believe me when I tell you that Pokemon is not nearly so scarce as Wizards of the Coast would have you believe. There is no dearth of product being printed - and the sales techniques of Wizards revolves around the degree to which they can entice mainstream dealers (Target, K-Mart) with huge discounts on massive shipments.

As that perception of scarcity begins to wane, and it has already, look for the "coolness" factor to dissipate as kids and parents look elsewhere for the next hidden treasure.

I am not among those that believe that Pokemon is akin to Teenage Mutant Ninja Turtles or Cabbage Patch Kids - there is a level of cross-marketing and interaction with Pokemon that is unheard of in the history of fad. Betsy Wetsy has never had a feature length film nor a popular afternoon cartoon and Barbie never had an interactive card game wherein you can control, to a degree, your favorite cartoon heroes. Imagine if our generation had a card game in which we could pit our Thundercats against a rival's team. Pokemon sells almost as well off-season as it does before Christmas - I don't recall moving too many Furby units in the summertime.

Wizards of the Coast, the Seattle-based company founded almost solely on the brilliance and success of the Magic: The Gathering card game, has a somewhat checkered reputation among collectors. In the interest of keeping their Magic game vibrant and current; readily accessible to the new player - Wizards has consistently outlawed cards from tournament play from the older sets and reprinted the more popular cards either with different artwork, different text, or both. Needless to say - this devalues cards that were once sold at a high premium, hurting the retailer (such as us) and the collector. In other words - what you thought was a card that could one day buy you that Volvo you've been eyeing, is now not allowed in tournament play and has been reprinted three or four times.

There are still a handful of cards in Magic that have retained their value (Black Lotus still commands around $250.00) - but we're talking about maybe a dozen cards that are salable at the $50.00+ range.

Puzzling for a small company, you might think, but remember that Wizards of the Coast was, a little over a year ago, bought out by Hasbro.

What does this mean for Pokemon? Essentially - if you're interested in cashing in on a fad, you'd be hard pressed to find a better product. Long term people beware, however, in ever thinking that something this widespread and visible could ever be a wise investment. If Mickey Mantle's rookie card had a print run of over one million as each "limited" Pokemon edition boasts, it would probably, even today, forty years later, be worth no more than $50-$75 dollars (accounting, of course, for the thousands shredded in bike spokes or tossed in the trash by a vengeful mother).

Consider the lesson of Beanie Babies: many people made their fortunes this way, many people now also have crawlspaces full of worthless little bean bags that they have difficulty selling at garage sales.

© High Speed Ventures 2011