NEW YORK — It all started with a primitive video game called Pong and the Atari 2600 console for at-home gaming, which debuted in the 1970s. Though its games had simple graphics, Atari revolutionized the gaming industry. Video games are now light years better, smaller and more complex. Legions of players collect them, and anything related to them, driven by childhood nostalgia and the desire to preserve cultural touchstones. There is also profit to be made.

Jason Rindahl, video game specialist at Hake’s Auctions in York, Pennsylvania, has been collecting and selling video games for more than 20 years. He has seen the market change from one mostly populated by collectors to one dominated by speculators looking for investment-grade items. While he still favors the collector’s perspective, he says that when he makes his acquisitions, he is a collector 50 percent of the time and an investor the other half of the time.

Video games require a physical console to play on (though Rindahl speculates that will change in the near future) so gamers are well acquainted with the machines and offerings from the brands Nintendo, Playstation, XBox and Sega.

While building a video game collection could break the bank, there are plenty of affordable ways to collect. Managing Director of Video Games at Heritage Auctions in Dallas Valarie Spiegel notes that some build collections by publisher, by brand or around games for a particular console. “The really nice thing about it is there is more than one way to do it. If I wanted to curate a collection that was publisher-focused, let’s say Capcom, and I wanted to collect all of the games that Capcom produced for the Nintendo Entertainment System (NES), there are a few different ways to go about it,” she said. “I could get loose cartridges, which is just the game without the box and manual, and that’s very easy to do. Pretty much anybody could afford to do that with that selection of games, very approachable.”

The next step up would be complete boxed games, which includes the game, box and manual. The unit contains everything, but it has been opened and played before. “While this may sound at face value like it’s more common in the field, complete and boxed games, especially those that have cardboard boxes, are really difficult to come by,” she said.

Ranking above complete boxed games are factory-sealed games. Heritage Auctions smashed the previous auction record for the most expensive video game when it sold a sealed Super Mario Bros. NES game from 1985 for more than $550,000 in April 2021. The previous world auction record, also set by Heritage, was slightly more than $100,000. Heritage broke that record again in July 2021 with a sealed Super Mario 64 game from 1996 that attained $1.56 million, including the buyer’s premium.

While some collectors have been trading in video games for several decades, for most, it’s still a fairly new collectibles market. As scarcity increases for older items, values have been steadily ticking up. Experts caution buyers to disregard the recent pandemic years as an anomaly during which prices for video games and collectibles went through the roof. These market blips never last long, and the market for video games has already corrected itself, with prices returning to 2019 levels.

Asked about the various gaming platforms, Rindahl said, “I would say Nintendo is definitely number one, number two would be PlayStation and after that you start getting into really kind of individual preferences,” he said. Although Xbox is popular with players, from a collectability standpoint, it lags behind, he added.

Nintendo has released several consoles and systems, such as the NES, Game Boy, Game Cube and its newest, the Switch. Older consoles in good condition sell well above their original retail price. A Super Nintendo Entertainment System, unused, boxed and including a Super Mario World game, brought $10,148 including the buyer’s premium in November 2021 at Hake’s Auctions.

An individual cartridge’s value generally comes down to high IP and scarcity, he explained. In the video game space, IP means intellectual property, which is shorthand for how popular a brand is.

 “People are getting into collecting now because they want to make money, and so the things that are safer and less risky are high popularity items. High IP would be Super Mario. Everybody on the planet knows who Super Mario is. That would definitely be something you would want to collect,” he said. Conversely, collectors can pursue rare items, but if there is not much demand for them, they might not make for wise investments.

While paying five- and six-figure prices for sealed video games is not for everyone, there are affordable options, especially in the subcategory of loose game cartridges. A Nintendo N64 (1999) Super Smash Bros game cartridge went for $11,800 including the buyer’s premium at Hake’s Auctions in November 2022.

While Nintendo games seem to dominate top auction price lists, exceptional Playstation games can perform well. A 9.6-graded Capcom copy of a 1996 Resident Evil game for Playstation made $264,000 including the buyer’s premium in October 2021 at Heritage Auctions.

While classic video games from the Atari era are often not top grossers, there are always exceptions. An original Allan Alcorn: Pong Home Edition prototype and design console achieved $216,728 plus the buyer’s premium at RR Auction in March 2022. Accompanied by a letter of provenance from Alcorn, the unit is desirable as an early example of video game tech built as a salesman’s sample wooden mockup of the Pong system.

Having experienced what Spiegel dubbed the “frothiest” time in the video game market that she and her colleagues at Heritage have been through, she said it’s unlikely anyone will see another $1.5-million game anytime soon, but adds that the market is still growing.

“I think a lot of the investment-driven speculators are participating because they love the games,” she said. “While speculators were sort of driving the top end of the market last year, we are seeing a bit of a shift where the competition is mainly happening between collectors who just really want a particular game. I think we are seeing prices more aligned [now] with what someone is willing to pay because they want to own the game, not necessarily for an alternative asset reason.”