Super Mario 64 game sells for record-breaking $1.5M at auction
bbc.com
bbc.com
Is this just a symptom of the ludicrous increases in wealth disparity, that someone has $1.5M to throw away on something like this? Or is it some kind of money laundering? Seriously, someone please explain this to me.
It's rather sad, now a lot of classics are being ridiculously priced at used game stores and while i'm all for making money, some of the recents i've seen have been insane price gouges. I saw Panzer Dragoon for Saturn going for 3800 at a used game shop, it was not complete either. I bought a fully complete in box copy for like $380 a couple years back and That was pricey to me.
I hadn't even noticed the Satiator was out finally! Thanks for dropping the reminder. There goes $250 lol.
2. Get appraised for $100x
3. Donate
4. Take $100x tax deduction
If that actually worked the top 10% wouldn't be carrying such an outsized share of the nation's tax burden on its shoulders via our very progressive tax system, they'd all be busy dodging all of their taxes via donations.
If you really wanted to avoid taxes, you wouldn't donate anything, you wouldn't sell anything.
The single best way to avoid taxes in your lifetime, is to borrow against your assets and only repay the borrowing in death. Your cost will be interest (interest rates are ridiculously low today). You could go much of your lifetime without paying taxes, while enjoying the good life borrowing against eg your stock holdings. Warren Buffett has made this point numerous times, that if he wanted to avoid paying taxes during his lifetime while enjoying his immense wealth, he'd just use that approach. Buffett could have taken out a $1 billion loan 30 years ago, had fun with that cash, and paid zero taxes on it for decades (while also not selling his primary asset - Berkshire Hathaway stock - which has appreciated dramatically).
The idea of this scheme (which may be exaggerated on the internet) is that you cannot sell the asset.
This is a painting by the cousin of someone who went to the same barbershop as de Kooning. There is zero market. There are approximately zero buyers. There is some story to be constructed that plausibly justifies some "historical value." There is presumably some decorative value.
Then again The H.Biden paintings are listed for 75 - 500,000 so maybe I just have 0 clue about what super wealthy people want.
No, Christie's (or some other big auction house) is never going to take your money that way. No one, actually.
It's the same with real estate. "Just walk in with a million in $20 bills and pay the property with cash". That's not going to happen. Ever.
Again, that won't happen, ever. The IRS is not going to just forget those 2 million, they don't care if it's "pocket change" for you or not.
Also, you are implying that somebody with 100M+ in assets is going to compromise everything to launder 2 million from some other stranger ...
You’d think so, and yet it’s come to light Crown Casino in Melbourne was doing just that, knowingly maintaining relationships with known crime organisations, and was actively enabling money laundering.[1]
I argue politics and big business is a front for bad behaviour, as evidenced by the endless stream of corruption news pouring out of the Australian federal government.
I find it difficult to believe the the other G20 nations[2] are markedly better.
1. https://www.smh.com.au/business/companies/five-bombshells-th...
You will never buy property and pay for it in cash (in developed countries, obviously).
Cash deposits above $10,000 in Australia are mandatorily reported, that doesn’t mean every cash deposit above $10,000 is investigated.
Please clarify because those two things are THREE orders of magnitude apart.
Buying an apartment with a briefcase full of money is something you see only on Disney movies.
That's the whole point, you just can't drop that much gray money on something at once.
So, he’d have handed that money to the vendor.
There is but a thin veneer of righteousness barely covering a small fraction of the lands.
There's apparently been an incredible amount of money laundering going through casinos in Vancouver.
And it's always from a bunch of armchair "tax dodgers" that, judging from the fantasies they share, have never seen an IRS form in their lives.
Some people balk at the satiator's ~$250 price tag, but I own individual Saturn games you can't even buy with that.
Whether that's true or not I have no idea, but it's certainly plausible.
Consider the global scale and love of video games, Mario, Zelda, etc. Versus the localized scale of Major League Baseball (even if it's in the largest economy) and particularly Mickey Mantle.
So why not Mario if Mantle? It makes just as much sense (however much sense that is, granted).
Check out what new prospects go for in the baseball card world. A Wander Franco card went for $200,000. This is a 20 year old that has barely played any professional baseball, recently got called up with the Tampa Rays, and hasn't hit well so far (and may just end up as a flop, as these guys sometimes do).
So Wander Franco cards make sense, and Mario doesn't? Obviously all of it seems crazy. And yet there it is.
You know what else is really crazy? Tesla's valuation. Shopify's valuation. Snowflake's valuation. DocuSign's valuation. And so on.
Yeah, I know, those are real companies that have products and services. Ok. I posit that many of those valuations are less sustainable than a 1952 Mickey Mantle card at $5m. And we're not talking a million dollars, we're talking trillions of dollars of laughably over-inflated valuations in the stock market. Mario at $1.5m is not crazier than Tesla at $600-$800 billion.
It's all part of the same asset speculation mania.
Millions of people out there are paying obscene prices for stocks and it won't end well. And with stocks it's not just some rich person with a toy hobby (because who really cares what that person burns their money on), it's retirement funds, pensions. All loaded up on Coca Cola at 33 times earnings, for a company that hasn't seen any growth in five years, has mediocre prospects for growth, and deserves half their present valuation at best (now repeat that scenario for most of the garbage-valuation blue chips, like McDonald's or Starbucks; check out the valuation on WD-40 (WDFC), an old slow-growth degreaser/lubricant spray company sporting a 40-45 PE; the entire market is like that now, out of its collective mind).
These are the consequences of perpetually low interest rates, it has bred a rabid culture of speculation and desperation for any yield or return.
Doing a cursory google search, I can see most used cartridges going for ~$25-40. Is an unopened cartridge worth many more orders of magnitude? Possibly, but it at least raises a lot of eyebrows that there’s something else at play.
EDIT: An analogous collectible is probably more something like a black lotus card, which as far as I can tell has “only” procured 500K at auction for a flawless one, and as far as I can tell inferior versions cost an order of magnitude less (10K or so) but nothing near to the spread here.
Yes, that's exactly how it works. The unopened package in near perfect condition is considered extraordinarily scarce.
It's the scarcity factor via grading that is being applied. That's obviously a graded Mario 64 package, not just a stray cartridge (of which there are zillions of copies as you note).
The supply, in the collectible world, is thus considered to be exceptionally low. You're talking about a sealed box, top notch grade. There are only a small number of those still in existence.
Here is the image of the graded Mario game:
https://ichef.bbci.co.uk/news/976/cpsprodpb/12EF3/production...
It's a 9.8, which is a very high grade for a vintage video game box. As far as the collectors are concerned, that's a very scarce item. The value is in the condition of the box and that it's sealed. Without that, you could just buy the item on eBay for ~$30-$50.
You see the exact same outcome in the comics world, for graded comics. And it's identical to the quality + grading = scarcity aspect in baseball / basketball / pokemon cards.
1969 is Mickey Mantle's last year for Topps baseball cards. There are a lot of copies of that card in existence, relatively speaking. You can buy it ungraded for $100-$1,000 depending on the condition you want. If you want a PSA 10 of that card (there are only two)? Be ready to pay $500,000+. That's the same exact scarcity by grading mechanism in action as with the 9.8 graded Mario cartridge, it's because there are not very many of them in that condition.
Asking for a friend.
If and when the Fed starts raising rates, valuation on growth stocks (and others too) will come back down to earth. 0% FFR and virtually unlimited Fed support almost do justify some of the current valuations, at this specific moment in time. The Fed could change that though.
If you’re operating a business that profits from selling collector items, you benefit from headlines about high sale prices. Spending $1.5 million to juice the market and generate excitement could manufacture enough demand and trade volume through follow-on buying frenzies that you come out ahead in volume sales of cheaper items.
Then you’re still sitting on an asset “worth” $1.5m that you can use to play games with taxes (depreciation?) and also use as collateral to secure cheap loans.
Legally transferring that much money to another person (and minimizing taxes) is difficult. Art and collectible sales are a convenient escape hatch.
One thing I've noticed though if that people buying a auctions do not always seem aware of the actual prices on the market. I attended an auction recently and bought nothing, as all people in the community I know. Everything was sold for far too mych. We were laughing about it, wondering why people were buying those games at those prices, as we know we could easily get them for far less.
I'd be really interested to know more about the dynamics making people spending far too much money like that (misinformation? excitation during the auction?).
This seems to reinforce some kind of laundering/tax evasion scenario. There is little logical reason for one cartridge to go for $13K and another to go for $1.5mm when both are certified excellent condition. It appears that the one going for far more is a product of timing. Someone needed to move a large chunk of money quickly and decided on the Mario cartridge.
Someone living in 1950 would also think is crazy to pay 1 million for a 1940 car.
Someone living in ancient China would also think it's crazy to pay a lot of money for a cooking pot.
People are realizing this, and are basically front-running the market, so the price of future priceless artifacts are rising much sooner.
Your reaction seems pretty normal and all, but your ethical viewpoint seems backwards to me.
If they spent $1.5M on something that involved the amount of labor and resources that normally buys, then they threw it away, if it wasn't for the general good. A yacht for instance.
But if they spent $1.5M on a collectible with no real use, then they have just exchanged a coupon, basically, for another coupon. They made a decision not to take useful resources away from society that they had a coupon for.
"Wow, those Charizard cards from your childhood are now worth lots of $" has been a common, popular headline across media in the last year, and now it looks like old video games are next. And as Pat says, I think there's reason to suspect that, in this instance, this is artificial pricing.
These bidders aren't game collectors, they are cardboard box collectors, nothing more.
I still think it's silly--I just get the "box" motivation.
At the same time, companies like Tesla and Micro-strategy are pouring billions into a new finite asset class.
There's simply more cash flowing into the system, it's just run of the mill inflation.
I have a super Mario cartridge. I also have a lot of drugs (or whatever) that I'd like to sell, but I don't have a distribution network, so I have to sell at a wholesale price. I put up the proxy object for auction. You bid far more than we think anyone would pay for the proxy object, and you win. We've made separate arrangements for the drugs (or whatever) so you already have them, or will get them soon.
Now I have a pocket full of legitimate cash. I think there's some biases stuck in American minds about Al Capone. He was a bad guy that did lots of illegal things. But his downfall was tax evasion. This approach gives me a reasonable explanation for all that money, and I can pay taxes on it, so I _appear_ to be an upstanding member of society.
OTOH, there might be something I'm not seeing here. In my country, private doctors at high-end hospitals accept cash as payment (even for major surgeries), which for common mortals would be a fiscal hell to convert into bank money, but they seem to be fine with it. I've noticed that most high-end hospitals also have a non-profit charity attached, and that many doctors have several big and ugly paintings in their offices.
It's true there's always going to have to be an initial transaction that's dirty. But if you have some (other) way to wash that, you can do all your following transactions as "art" sales, keeping the art in a freeport so it's never taxed as an asset and is just moved from one vault to another when these sales are made.
Tons of articles all over about them over the years.
Disclaimer- I still watch it from time to time, it's a guilty pleasure.