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Who's making older games so expensive?
(slrpnk.net)
Vintage gaming community.
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Supply and demand, since they're all collectors items now.
And I hate to say this but also the success of vintage/retro PC and video game channels on YouTube.
On the flipside this has led to a whole slew of new businesses that cater to people who just play the ROM's and even new mini PC's just to play vintage/retro games on.
Yep, it's the collectors' market. I say that as someone inspired by those very YT channels to get into the hobby myself. But I'm just looking to get games I remember and enjoy, not looking to get whole complete collections or anything. If a game I have my eye on becomes some "holy grail" $500 thing, I can live without it. What helps me, though, is living in a bigger town for a rural area that does have one or two brick-and-mortar retro game stores, where I may be able to find games I'm looking for at below eBay prices. That's another hint; hit up the physical shops you may have near you, be they specialized game shops or even thrift stores. Diamonds in the rough do exist sometimes.
EDIT: I mention rural areas specifically because they usually won't have as much demand driving up prices as the big urban areas will, even if supply is lower.
The issue with our retro stores is that they look up prices on eBay to set their prices and the first result when looking up Symphony of the Night is $150, so their price is $125 to be "cheaper" than the market price.
I'm seeing playable discs for around $30 sold on ebay.
At least they offer a substantial discount from eBay price.
"Well, this is what it goes for on eBay!"
Me: "No, that is the price it sits unsold on eBay. Refine search -> Sold items, my friend."
It's not much different than if you were to go to a business that buys and sells gold. They'll have the current market rate on display and for video games eBay is a decent place to look for the market rate. With retro games there may at least be a bit of lag if they have prices directly on the games and not do something shady like looking up current prices at checkout.
What you said is definitely a problem though. The person selling a game should look at recent sold copies over the past 6ish months and consider the physical quality of the game in question to determine a price better; I don't think a lot of shops put much time or thought into this aspect of it.
I don't really know how you could do it any other way when retro games are a finite resource that isn't being produced any more.