When an early sealed copy of Super Mario Bros. sold at auction for $114,000 last month, it set a new record for the public sale price of an individual game. Months earlier, though, an investment platform had quietly paid $140,000 in a private sale for an early copy of the game in pristine condition.
Now, that company is already planning to turn a profit by selling ownership shares in the game worth $150,000 next week.
Jumping in a rising elevator
Billing itself as the “stock market of collectibles,” Rally has, since 2016, made a business out of buying rare cars, watches, books and comics, sports cards, and more, then selling ownership shares in those assets to the public. The value of those shares then floats on Rally’s marketplace, depending on market expectations for its eventual sale price.
Rally’s copy of Super Mario Bros.—a sealed 1987 “hangtab” edition rated at a near-perfect 9.8 A+ by Wata Games—is Rally’s first foray into the collectible video game market. That’s a move Rally VP of Operations Fitz Tepper says was “a natural progression for us.”
“Over the last year or so we’ve heard from our members and have observed the industry grow, and it’s clear that there is a community that believes in both the financial and emotional value of these games and wants access to invest in them,” Tepper told Ars Technica. “We’ve seen this demand from asset classes already on the platform, like sports memorabilia, trading cards, or collector cars and are now thrilled to add video games to that list.”
Tepper says Rally sourced this particular copy of the game from “a private collector who had essentially made an early bet on the potential future significance of this item, had it stored for many years in a safe deposit box, and recently as the market began to develop decided to get it graded and eventually sell it to Rally.” That means the previous owner had been sitting on this rarity since well before a $100,000 Super Mario Bros. sale in 2019 set off a small boom in sealed game valuations.
Details on the box place Rally’s copy of Super Mario Bros. in the fifth known distinct “edition” of the original game, dating its production to early 1987. That suggests it was produced in much higher quantities than the earliest “sticker-sealed” copies of the game, which were sold without shrinkwrap only in early test markets in late 1985 and early 1986.
Still, Wata Games says this is one of only 14 factory-sealed copies of Super Mario Bros. it has seen among the so-called “hangtab” editions, which feature a hanger slot on the back that was removed from production lines around September 1987. Among that rarefied group, Wata says this is the “single highest graded sealed copy” it has seen, earning a 9.8/10 for box quality and a near-perfect A+ for the shrinkwrap seal on Wata’s scale.
“This is the first time that such an early print with a grade of 9.8 A+ has ever been offered for sale,” Wata Games President Deniz Kahn said in a statement. “This is the 1-of-1 highest graded copy of Super Mario Bros. in existence, considered by many collectors to be the ‘Holy Grail’ of the hobby. It’s the Action Comics #1 of video games.”
An investment opportunity?
Despite the record $140,000 sale price it paid just months ago, Rally is already planning to offer the game at even higher collective price. Rather than selling to the few collectors with six-figures in disposable income, though, Rally will be selling $150,000 worth of shares in the game (3,000 individual shares at $50 a pop) starting at 12pm EDT on Friday, August 21.
That $10,000 difference will cover Rally’s $6,775 “sourcing fee” as well as other miscellaneous costs. Rally also maintains a 2-percent ownership stake in the game, essentially buying 60 shares from the public pool to keep some “skin in the game,” as Tepper puts it.
Purchasing a $50 share gives a buyer partial ownership of an SEC-regulated company that manages the game as its sole asset. Owners can then sell those shares on the Rally marketplace at prices dictated by market demand or wait for Rally to liquidate the game and pay out the owners (while final liquidation decisions are made by a Rally advisory board, Tepper says Rally would “never accept an offer unless there was majority support from shareholders,” and that the company “generally look[s] for a significant return versus current market value.”)
Rather than cutting the game into 3,000 individual pieces to distribute to the part-owners, Rally will maintain possession in “a secure facility in Delaware [with] temperature controls, state-of-the-art security, etc.” The game may also be displayed as part of a rotating selection of pieces in Rally’s SoHo museum in New York or loaned out to existing museums for display around the country.
Of course there’s no guarantee that 3,000 people will want to buy a small share of a game that’s set at a record valuation. But Tepper says similar offerings at this price range sell out on their platform “in a matter of minutes… We don’t anticipate this offering being open more than an hour or so at max and probably just a few minutes for it to sell out.”
Much like Heritage Auctions, Tepper says he sees Rally becoming a bigger player in the classic video game market going forward, with plans to “scale to do a dozen or so more games before end of year.” NES games like The Legend of Zelda, Super Mario Bros. 3, and Stadium Events are on the company’s radar, he said, along with limited editions of more recent games like Goldeneye and Halo.
And while some collectors see an unsustainable bubble when it comes to sealed game pricing, Tepper is more focused on the overall increase in attention coming to the market. “I think the market is just starting to break into the mainstream,” he said. “While the collector video game market is still pretty small, these assets resonate with a huge portion of our population… as people who grew up playing these games begin to see them as investments, I think it has the potential to help the market really grow.”