Thursday, July 23, 2015

My thoughts on Limited Edition items.

Limited Edition - What is the point?

It concerns me as a person who enjoys games and gaming that there continues to be an increase in limited edition items.  I look at many projects that are on Kickstarter and the limited items that become unlocked after a certain funding point has been reached.  This has led to the opportunist and speculative buyer coming to the fore.

I remember years ago running Wizkids events and the limited edition models that were given as prizes.  What we had was the game being dominated by a few individuals, who would attend as many events as they could to win the limited edition prizes.  This meant that a few individuals cornered the market, sold the spares for profit and didn't endear themselves to many in the community.

(TIME FOR A DISCLAIMER: These people did nothing legally wrong.  They were good players and in all the cases I knew of, good people.  They used the system to profit them, which while many may find morally bankrupt, is not breaking any rules in how prizes were won and what they could do with them after having been won.)

The madness that comes when people (particularly those who are passionate about their hobby) see limited edition means they automatically believe that their purchase is worth more than what they paid for said item.  This is not necessarily so.

My hobby is particularly difficult to give an accurate example of, as the community seems to have not grasped the concept of worth.  So I'll give an example with trading cards.  Up until the late 70's and possibly early 80's trading cards had some value beyond their intrinsic cost.  With a number of changes in the industry there was suddenly and explosion in quantity, price and shops selling cards.  At one point there were card shops everywhere, all trying to compete.  Then the bubble burst.  People who had bought sealed boxes of cards found that there might not be any worth in their purchases at all.  While the box may have a particularly rare card inside worth a considerable amount, there was no guarantee.  Thus the mass produced product became less than the card it was printed on.

Another example was where an expert in sports memorabilia gave his opinion that buying the limited edition signed cricket bats or other such product was unlikely to get a person any more than the value they initially paid for the item.  A true limited edition item worth money would be the entry tick signed by a sportsman who won the game, broke a record and the like.  In this case it is truly limited and worth something to a true collector.

What does limited edition mean in a gaming context.  It only has an appeal in two ways; first is its game attributes and secondly as a collectible piece.  If in the first case it is a game changing item, then all hell breaks loose as people who play competitively seek them (like rare cards in Magic:The Gathering).  Where money is involved people can become rather aggressive and sometimes obnoxious.  The richer players will get the limited items, and the rest languish and ruminate over how to defeat an opponent with this game changing item.

Where the item is a collectible piece you attract the people who wish to have a complete set, and those who are speculative investors.  I myself am a collector whose OCD drives me to complete sets, and to use what it is I obtain.  Concept of worth will be determined long term, and this is where the limited edition value of items in the industry (I think) has not been properly tested.

When the recent global financial crisis hit, a number of wealthier individuals who had lots of items to  sell found that they got very little in return investment.  Limited edition meant nothing when many people didn't have much money and were more worried about feeding themselves or keeping a roof over their head.  Having a limited edition during a depression won't net you much.  It was a good time for those people who had money and could capitalise on another misfortune.  I even recall that one case came to my attention where the unfortunate person selling was lucky enough to run into a generous person who actually paid them more than they were asking, feeling that to take advantage of a person in such dire circumstances was morally irresponsible (I believe the person was a religious one).

Where you have a thriving economy and a growing number of wealthy persons with cash in excess of needs, then you can possibly make a return on the item.  In a lot of cases these can be people who as a child could never afford the items, but now as a successful and wealthy individual they can now afford to offer more than any sensible person would be willing to pay.

I find that the mentality here in Australia is that due to the cost of freighting an item to this country, it's smaller pool of limited edition items, can potentially earn more than what should be the case.  The sellers know this, and take advantage of the fact that to buy the item from another overseas source would be as expensive.  I see that limited edition items overseas sell for far less than what Australian sellers are asking.  They argue (the sellers) that sure you can compete for the item, but I have it here and now at this amount.  They may think "remember the exchange rate, the cost of freight, my price is what you want to buy it for, trust me, I'm cutting my own throat (Dibbler: humour from Discworld) to sell you this item".

So my opinion with thinking about limited edition items is this.
  • Decide, and be honest about this, whether you want the item to be used, to form part of a collection, or that your only interest is making money from the item.
  • If you are a purchaser, research the item and its initial worth.
  • If you are a seller, then consider the economic environment and how it will affect your expectation of price.

My own advice is never pay more than what the limited edition piece sold for (inflation modified).  This price would only be paid if the original bill of sale was included, the item was still sealed and has not in any way been used.  If it has been used under any circumstances, seals broken, damage of any sort then maximum of 50% reducing downwards depending on quality.

I have in the past paid far more than I should have for some items, and the person who did so gloat at my expense whenever they get a chance to.  Don't be a victim of your own desire, buy wisely and sell responsibly.

Here ends my long winded diatribe.

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