Understanding the 2020 Gamecube Price Spike
Understanding the 2020 Gamecube Price Spike
An in-depth look at the perfect storm
In this edition of Game Spec I will be looking at the price spike of Gamecube games in 2020 and working towards understanding the perfect storm of factors that pushed them to such high levels.
The Gamecube PriceCharting index shows a dramatic increase over the past year:
The prevailing assumption is that the changing conditions due to the COVID-19 pandemic led to the sharp increase in prices. Others think this overlapped with “nostalgia timing” in Gamecube’s life cycle as a collectible, when people who had Gamecube as a child obtained a critical mass of disposable income. I think these account for half of what happened. This edition of the newsletter outlines this and what could have caused the other half.
Context within Game Collecting
Gamecube isn’t the only system to have a dramatic increase in game prices. PriceCharting has a combined index of the most popular pre-Gamecube systems that shows a similar rise:
It is also worth looking at the charts for the other popular Nintendo Systems:
Everything went up.1 COVID-19 had a monumental impact on the price of video games. I recommend reading my newsletter on the 2020 game price spike detailing how and why this happened. Let’s look at how Gamecube compared to the rest of the market.
The Numbers
Here is the data from select PriceCharting indexes which track the average price of licensed games on each system. “VGPC Combined” is the index mentioned earlier.
The average Gamecube game was up 49% between January 2020 and 2021. Other popular systems went up around 25%. Gamecube games increased nearly twice as much as those on other systems; that’s a significant difference. How does this year compare to others?
This past year was an outlier for Gamecube, more than doubling its previous record. If we assume 25% growth last year was the average impact from COVID-19 factors on popular systems, that only explains half of Gamecube’s increase. What explains the other half of its price spike?
Nostalgia Demand
The way many people model the collecting lifecycle of a system goes like this:
Kids have video games during their childhood
The stuff gets traded in, handed down, donated to charity, broken, etc.
A decade or two later, those kids are now adults with disposable income looking to relive their childhood and buy back everything they had (and more)
Prices rise from this demand influx
This pattern definitely exists, and I refer to it as “nostalgia demand”. Unfortunately, even though nostalgia demand is real, it’s not predicable or visible. If you compare the charts of NES and SNES prices, the trends virtually overlap. If nostalgia demand was a main driver, the rise trend of SNES should lag around five years behind NES. Because such a lag isn’t visible, other factors driving prices must overshadow the impact of nostalgia demand. I think it’s because the landscape has drastically changed.
Interest in older games among the whole population has skyrocketed. Old games aren’t ignored like they used to be; most people now recognize that they can still be fun (or valuable). 15 years ago, most people saw old games as garbage. Unfortunately for collectors, people don’t see them that way anymore.
Another change is the gaming demographic. Video gamers are stereotyped as being young, but that’s less true today than it was at any point in the past. If we could see the age distribution of Atari 2600 owners/players and compare that to subsequent consoles, I’m sure the age distribution has progressively flattened. The flattening of the nostalgia demand curve follows. If there isn’t a strong peak age where people first have a system, there won’t be a noticeable nostalgia demand peak in the future.
If nostalgia demand was a main cause, PS2 and Xbox should have also seen price spikes that outclassed other generations. PS2 increased slightly above average and Xbox significantly under-performed compared to the rest of the market. Nostalgia demand was only a smaller contributing driver of 2020 Gamecube price spike.
Gamecube’s Place in History
Until the Wii, Nintendo was trending downward. NES sold 34 million units in the Americas, but by the time GameCube was finished it had merely sold 13 million.2
Nintendo may be strong now, but starting with the N64, they seemed to make a point of releasing console hardware opposite of what consumers wanted. While Nintendo was doing a great job building its handheld brand, it continually made bad decisions that hurt console sales. Nintendo fans might find that statement somewhat revulsive, but the numbers don’t lie. The chart above shows a steady decline in console sales over three decades, the Wii was a big outlier.
Throughout all of this, one thing stayed constant - the quality of Nintendo published software. Their games are great, have always been great, and everyone knows this. This is key to understanding current Gamecube prices.
The Important Outlier
Before writing this article, I never thought of the Wii as an outlier, but the more I think about it, the more it fit. People really loved Wii sports, but they didn’t need it long term. Nintendo used Wiimotes for two generations, Microsoft attempted two iterations of Kinect, and Sony is still using the Playstation Move in a third generation (as an extension of VR). Motion control is still around, but it looks more like debris from the Wii explosion than anything developed naturally.
I enjoyed the Wii when it came out, but I grew tired of it after two years and haven’t gone back since. My experience was the extremely accelerated case. The Wii definitely had more staying power with the average consumer. That said, everyone seemed to end up where I did. If motion controls weren’t just a fad, why are all systems still using controllers with joysticks and buttons as the standard? I’m left to assume motion control is not what most gamers want.
If people eventually tire of the motion controls found in most Wii games, what can they do? Sell their Wii system, or buy Gamecube games. Until late 2011, Wii’s included native support for Gamecube games.
Quasi-Gamecubes
During the life of any system, the only people buying games for it are those who own it.3 This establishes a ratio of software to hardware that is somewhat consistent across platforms. The pricing of items on each side of this ratio will reach a natural balance. Before people can buy a game for a system, they need to buy the system itself. If the hardware gets too expensive, they might just drop the idea. This normal balance for Gamecube gets thrown off by the existence of the Wii.
There were 13 million Gamecubes sold in the Americas. Since then, the number of quasi-Gamecubes has nearly quadrupled to 50 million by including backwards compatible Wiis.4 Meanwhile, the number of Gamecube games remained the same. This enables two things that put a ton of pressure on the available supply of Gamecube games.
People who happen to own a Wii can easily decide they want to buy Gamecube games. (less than $30 can buy a newly manufactured controller and memory card and turn the Wii into a Gamecube with better video output)
Anyone who has interest in buying Gamecube games but needs to get a system first will find acquiring a quasi-Gamecube to be four times easier than they should, given the availability of Gamecube games they are interested in.
Nintendo is at one of its strongest points throughout its history. Now more than ever, there are people of all ages looking back to play games they missed. Wiis make going back to Gamecube games too easy. Take a look at this chart of Nintendo hardware and Mario software availability:
This puts into perspective the relative scarcity of Gamecube software compared to the massive quantity of hardware. While not causally related to COVID-19, this supply to demand inequality combined with pandemic related pressures to cause rising prices in 2020. I think this under-supply/over-demand phenomenon was the main reason Gamecube game prices rose nearly twice as much as those on comparable systems.
Keen readers are probably thinking that this has always existed and should have already been baked in to prices. It is true that backwards compatible Wii’s have existed for ten years, and I think that’s why Gamecube games seemed expensive to people before the pandemic. However, a majority of their original owners were likely too busy enjoying the Wii to care it could play Gamecube games before the Wiis were relegated to the attic. I suspect renewed interest in the Wii is short lasting due to motion control fatigue, and it leads to people branching out to Gamecube. Also, new Nintendo fans from the Switch who want more of their favorite franchises are looking to the Gamecube for the first time.
More succinctly, people were late to realizing the best use of the Wii is as a Gamecube. The Wii’s original appeal was its freshness, but it had an expiration.
Peak Gimmick-Free Quality
Putting aside the short supply, I will also make the case that Gamecube software was peak Nintendo 3D game quality before they experimented with alternative controllers for over a decade. I say this as someone who prefers the N64 to Gamecube, but with the awareness nostalgia causes my preference.
From a theoretical or academic perspective, games on the Gamecube are better than those on N64. Over time, developers figure out what works, what gamers prefer, and game design tends to improve. In addition, Gamecube games look better, sound better, and probably run at twice the frame rate. Don’t underestimate the importance of looks, game play quality is only part of what draws people in.5 Compare Timesplitters to Goldeneye, F-Zero GX to F-Zero X, Super Smash Bros Melee to Super Smash Bros, Lego Star Wars to Shadows of the Empire, etc. Not every Gamecube game is better than its analogue on the N64, but they all are on average.
The Gamecube is simultaneously an all-time low in supply,6 and an all-time high in (gimmick-free) quality. Anyone who wants classic Nintendo games will inevitably look to the Gamecube if they lack interest in or tire of gimmicks.
Amazon.com Restricting Supply
Amazon made changes sometime in late 2019 or early 2020 that effectively raised the price on all Nintendo published items. Normally anyone can sell most items on Amazon, just like Ebay. There have been increasing restrictions on this in recent years. Long story short, it’s now basically impossible for anyone to sell Nintendo published items on Amazon. This restricts supply, increasing average prices.
One might think this should even out because buyers and sellers can easily go to Ebay, then arbitrage will take care of the rest. I don’t think it’s that simple. For one, perception matters. Many people use PriceCharting and other apps that exclusively look to Amazon and Ebay (the only two centralized marketplaces) to generate price estimates. These apps don’t know what sells on Amazon, they just take the lowest price or some combination of listings and calculate an “Amazon price.” Then the Amazon price gets combined with the estimated Ebay price, and people are presented with how much a game is “worth.”
People use what they see elsewhere in determining what they are willing to pay for something. This Amazon restriction inflates perception of an item’s actual value. I would estimate this restriction caused all out of print Nintendo published games to receive a bump in price of a few percent on average. For high demand/low supply items (like Gamecube games), the impact could be higher.
FOMO
At a certain point in game collecting, the fact prices are going up becomes a self-fulfilling prophecy. When it becomes sufficiently noticeable, people start talking about it. And when people talk about it, more people think about it. And like they say, sometimes negative attention is better than no attention at all.
Once people think something is going up, they are more inclined to buy it now so they don’t have to pay even more later. This increases prices in the short term. I suspect that halfway through Gamecube’s 2020 price spike, fear of missing out (FOMO) helped push the spike higher. It could have either increased the magnitude of the spike, or just accelerated increases that would have eventually happened naturally.
It’s All Relative
A Google search for “why are Gamecube games so expensive” returns many results. On the first page, more of the results are from before 2019 than 2020! Gamecube games seemed expensive to plenty of people before the recent 50% increase.
As long as enough people are willing to pay more (easily enabled by an oversupply of hardware), they will keep going up. The populations of people who think the prices are ridiculous and people who pay $60 for a loose Mario Party 4 are completely different. I like pointing this out because “expensive” is a subjective term. There isn’t a way to find where peak expensiveness lies, but the market will eventually show us.
In Summation
Gamecube prices went up in part due to COVID-19, but that only accounts for around half the total increase. Many other factors were involved. Collectors saw prices were rising, and fear of missing out kicked in. Amazon inflated prices (or at least perception of them) by restricting their marketplace. Most importantly, both renewed and fresh interest in Gamecube software is enabled by a massive over-supply of hardware. There are four times as many people able to play Gamecube games than the supply is prepared for.
Are Gamecube Games Now Overvalued?
If all game prices are inflated in a “bubble,” the half of the Gamecube price spike attributable to COVID-19 is likely as much of a bubble as it is on other systems. However, the other half of the price spike, primarily enabled by hardware supply, could stick around longer.
If game prices start dropping, I don’t expect popular Gamecube games to correct as much as everything else. Gamecube games had a good reason to have a higher increase. Popular and high quality titles on the Gamecube should remain more expensive than their counterparts on N64 given the different software to hardware ratios. I look forward to seeing how they compare after everything settles.
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Everything didn’t go up, but most of the games people care about probably did. I make frequent generalizations knowing they aren’t completely true - the point is to save me from detailing every exception.
https://www.nintendo.co.jp/ir/finance/historical_data/xls/consolidated_sales_e2003.xlsx
Playstation and GB/DS platforms are the biggest exception. However, in all of these cases, successive platform sales were comparable, not the 300% increase between GC and Wii (BC).
I calculated the number of backwards compatible American Wiis by assuming half of the Wiis sold in 2011 and all sold after lacked the feature
If gameplay was everything, you would hear a lot more people talking about Atari 2600.
Gimmick-free supply. Wii U supply is considerably lower. If you disagree with this article and think it’s strictly a supply thing, start investing in Wii U.