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Will TCGs Stand the Test of Time? Comparing Collectible Successes and Failures — Transcript

by One Piece of Insight · 3,848 words · 556 segments · language en · Watch on YouTube

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0:00Hello and welcome to One Piece of
0:01Insight. In today's video, I'm going to
0:04be asking the question, are TCGs going
0:06to stand the test of time? Are they
0:08going to grow to be considered, you
0:09know, a long-term collectible and even
0:12an asset class, or are they going to
0:14fall into the dustbin of history
0:15alongside, you know, the other big booms
0:18of the past? So, in order to do this,
0:20we're going to be looking at
0:21collectibles that have failed. We're
0:22going to look at collectibles that have
0:23been successful, and we're going to
0:24compare them. So, with that, as always,
0:27this is intended to be interesting and
0:28informative, but not financial advice.
0:31Let's jump right in. So, first, let's
0:33start with the bad. So, some
0:34collectibles do go bust, usually due to
0:37overhype and overproduction. So, let's
0:39talk about what some of those are. So,
0:40obviously, you know, there's the
0:41historical example of the Dutch tulips,
0:43where you had people like selling their
0:45houses to buy tulips, uh, you know,
0:47rampant speculation. But, there are also
0:49smaller, more innocuous ones. There's
0:51like Hummel figurines that were marketed
0:54to like our parents' generations or
0:55older generations uh, as collectibles.
0:58And like, they may have been popular
1:00with that generation, but now the
1:02current generation just doesn't want
1:03them, right? So, parents are downsizing
1:06and getting rid of them, and there's
1:07just no one to take them. You know, you
1:08have Pez dispensers, which were very
1:10popular for a while, and I'm not going
1:11to say they totally went bust, but
1:13they're just clearly not as popular as
1:15they used to be. And then, Beanie
1:17Babies, of course, we've talked about
1:18many, many times, was like the hugest
1:20hype uh, in collectibles. It was like
1:23the first time that we'd ever seen like
1:25a mass-produced collectible like this
1:27become very, very expensive, and came
1:29crashing down. And then, finally, and
1:30probably saddest to me, is the junk wax
1:33era of the '90s. This is when I used to
1:35collect a lot of sports cards. You know,
1:37I have like six copies of this Kobe
1:39Bryant rookie card because everything
1:41was printed into the ground. It's like a
1:43$20 card, right? So, even though this
1:45isn't an example of where something went
1:47bust, this was an example of something
1:49that was genuinely valued and still is
1:51genuinely valued, but was just so
1:53lacking in scarcity uh, that it ended up
1:56not being worth very much when there was
1:58a correction. So, what are the
1:59characteristics of these failures? So,
2:02obviously there's going to be more than
2:03this, but these are the ones that I saw
2:04as sort of the most important. The first
2:05is that they're marketed as a
2:07collectible from the beginning, right?
2:08So, if people know that they're supposed
2:11to save something and they're supposed
2:12to collect it and that it's supposed to
2:13be worth money, they'll do two things.
2:15Number one, they'll take good care of
2:17it, right? You know, a lot of the things
2:19that are worth the most money now are
2:20things that like people generally didn't
2:22take care of and that's why it's very,
2:24very difficult to find mint examples,
2:26right? But the other thing they'll do is
2:27they may speculate on the price because
2:29they assume there's going to be a
2:31secondary market for it, uh, even if it
2:33hasn't actually been proven, right? So,
2:34that can lead to hype early in the
2:36production.
2:37The second thing is things that exist
2:38only to be collected, right? So,
2:40inherently something that has an
2:42alternative use is likely to have more
2:45genuine demand than something that's
2:46only purpose is to be collected. You
2:48know, thinking about like those Hummel
2:50figurines, you couldn't do anything with
2:52them. You know, TCGs on the other hand,
2:54they're a game. So, if nothing else,
2:55it's a game that you can play, right? I
2:57really think that that matters.
2:58Obviously, extreme hype and rapid price
3:00growth like Beanie Babies, you know, we
3:02had never seen, at least in our
3:04generation, anything quite like that,
3:06how rapidly they went from being just
3:08like a cheap toy that you would get in a
3:10gift shop all the way up to like a
3:11top-tier collectible.
3:13Manufactured to demand, like things that
3:15are overproduced, right? The fact that
3:17something is being produced at the same
3:20time that it is highly coveted like
3:22creates an incentive for companies to
3:24print more and to make a ton of money.
3:26This is what I was talking about like
3:27with the Kobe Bryant rookie card, but
3:29like probably the most famous example is
3:31like the, uh, Ken Griffey Jr. rookie
3:33card where Upper Deck, they were like
3:35printing entire sheets of this rookie
3:37card, right? And like whatever the
3:38opposite of short printing was because
3:39they knew there was so much demand for
3:41them. And so like when those things are
3:43overproduced because the companies that
3:45make them know that they're really
3:46highly in demand, that then can lead to
3:49lower prices longer term cuz there's
3:51just too much supply. And then the final
3:53thing is that like maybe there is
3:54genuine demand, but the demand is very
3:56niche, right? Like I still think there
3:57are lots of people out there who do
3:59collect Pez dispensers. There's probably
4:01a pretty active collecting community,
4:02but like it's pretty small, right? Like,
4:05you know, that is a important thing for
4:07a certain group of people at a certain
4:08time in their lives, but it's much
4:10smaller than something that has like a
4:11global IP. And so it is going to be an
4:14inherently niche group of collectors for
4:15that product. So let's talk about some
4:17good things, right? Now when people
4:18compare TCGs to other collectibles,
4:20they're like fixating on the things that
4:22haven't done well, but we often forget
4:24that there are entire categories of
4:26collectibles that are now considered to
4:28be assets that people would have scoffed
4:31at the suggestion that they were
4:32anything other than just like a
4:33frivolity or like an absurd thing to try
4:36to collect at the time uh that they were
4:38produced, right? So some of like the
4:41early examples in the 20th century are
4:43like people collecting like stamps and
4:46coins. In fact, this has become so
4:48ingrained in like the culture of many
4:51older, particularly Americans, that I
4:53was like researching safety deposit
4:54boxes recently, and they were like
4:56things you should store in your safety
4:58deposit box. And they were like your
4:59stamp and coin collection, right? 50
5:01years from now when our generation is
5:05looking to buy safety deposit boxes or
5:07whatever, might a similar thing say like
5:09to store your TCG collections, right? It
5:12might sound silly to say that, but
5:13there's like no reason to think that
5:14these are any different from those
5:16things. Uh you know, I had to include my
5:18favorite piece of American currency
5:20here. This is the $5 education note from
5:221896. Like people still collect coins
5:25and currency. It's still very highly
5:27valued, but mostly I just think this is
5:28a banger piece of art that everybody
5:29should know about. Uh you know,
5:31obviously Rolex watches are like a gold
5:33standard around the world. People wear
5:35them on their wrist. You immediately
5:36know it's a Rolex, and so it is both
5:38considered a store of value as well as a
5:40statement of uh
5:42taste, or as some people might say lack
5:44thereof, depending on your particular
5:46opinion on Rolex.
5:47Um cars, right? They started out as just
5:50like utility, but then people grew
5:53older, they grew nostalgic for like
5:55their fun cars of their youths, and then
5:57suddenly you saw like Mustangs and
5:59Corvettes and like these old American
6:01cars, at least in the United States,
6:03carrying a ton of value as collectibles.
6:06And now you even see them being treated
6:07as assets, right? I mean, you can buy
6:09financialized instruments for these uh
6:12rare cars. And then finally, of course,
6:15there's the biggest one of all, which is
6:16art, specifically like contemporary and
6:19modern art, has absolutely exploded in
6:21value over the last, you know, 50 years.
6:25A long time ago, people had art as like
6:27furniture, right? It was just something
6:29they had in their house. Maybe it
6:30demonstrated their taste, maybe it
6:31showed that they had some money because
6:33they were able to hire someone to like
6:34paint their family. You know, at a
6:36certain point, maybe some artists became
6:39more well-known, and so you might know
6:41what a piece on someone's wall is, but
6:42like now these are like financialized
6:45instruments that are worth millions, and
6:47in some cases even billions of dollars,
6:49right? And that didn't happen overnight,
6:52but it was not something that was
6:53readily apparent and not something that
6:55has existed since the beginning of art,
6:57right? So, these markets can grow and
6:59change incredibly quickly. So, what are
7:01some characteristics of successes? Well,
7:03the first is that I think they have
7:05non-collectible use for the most part.
7:07Cars, you can drive them. Watches, you
7:09can wear them. Shoes, you can wear them.
7:12Money,
7:13you could technically take it to the
7:14bank and spend it, right? I think they
7:16capture art, culture, or preferably
7:19both. Um part of the reason I think that
7:20that piece of American currency is so
7:22interesting is that Congress at the time
7:24thought it was sad that most Americans
7:26would never make it to like an art
7:27museum to see the great works of art.
7:29So, they decided they were going to put
7:30works of art on currency so that every
7:32American could see that. I think part of
7:34the reason why collectors covet that
7:36particular piece is because it does
7:39capture art and it captures culture. It
7:41captures a moment in time, it captures a
7:43moment in history, as well as being like
7:45aesthetically beautiful, right? You
7:47know, having a long track record for
7:48success, watches have been popular for a
7:51very, very long time. People have been
7:53collecting like ancient coins for a very
7:55long time. Art has a track record of
7:57success that, you know, is at least 50
7:59years, in some cases, even longer than
8:01that. So, you know, when you have
8:03something that is well-established,
8:04people are going to trust that it will
8:06store its value and not just sort of
8:07disappear overnight.
8:09Things that have fixed population where
8:11no more will be made. So, this is
8:13really, really crucial, right? Because
8:14like the thing that makes most
8:17collectibles different from the ones
8:19that went bust is that if you take like
8:22a '67 Mustang, right? Like no one's
8:25making more '67 Mustangs, right? The
8:27total number that are ever going to be
8:28made were made, they were used, and if
8:32you want one,
8:33it's just whatever is left, right? So,
8:35the inability to print or create to
8:38demand is part of the reason why there
8:41is like inherent scarcity that can drive
8:43prices up. And then finally, they're
8:45recognizable as expensive, right? If you
8:47drive down the street in a classic car,
8:48people know it. If you're wearing a
8:50Rolex, most people know that, right? You
8:52know, if you walk into somebody's house
8:54and they have a Picasso on their wall,
8:55like most people, even if they can't
8:57pinpoint that it's Picasso, will look at
8:59it and think that looks expensive to
9:00them, right? So, if it's something that
9:03is recognizable as expensive, that
9:04creates an incentive for people to own
9:06it cuz it makes them feel good. Okay, so
9:07let's go through and discuss the
9:09characteristics of failures and
9:10successes and apply them to trading
9:12cards to see where they line up. So, the
9:14first is, marketed as collectibles from
9:16the beginning. Yes, trading cards were
9:18always marketed as collectibles from the
9:20beginning. This is a characteristic of
9:22failure that absolutely is 100% in the
9:26TCG space.
9:27The next one is exist only to be
9:29collected. So, I'm going to say no on
9:30this one because like the fact that
9:32there are games to be played, I think
9:34does create a genuine amount of demand
9:37that wouldn't exist if they were just
9:38like picture cards. I compare like the
9:41One Piece TCG or like the Pokémon TCG to
9:43like, you know, top Star Wars cards or
9:46even sports cards in some sense, right?
9:48Like there's no inherent utility to them
9:50other than to be collected and I do
9:53think that gives them a slight
9:54disadvantage compared to a lot of TCGs.
9:57Uh third would be extreme hype and rapid
9:59price growth. Yep, we've got that. We've
10:02had that at several different points in
10:03our history, right? You know, I think
10:05it's easy to forget that when Pokémon
10:07first came out it was incredibly hyped.
10:09Prices went up a lot and then the market
10:11completely cooled, right? People went
10:13off, they did other things in many cases
10:15for many, many years. You know, there
10:16were people like me who collected in the
10:1890s like in the early 2000s when I was a
10:21kid and didn't pick it up again until
10:24like the 2020s,
10:25right? Now, thankfully it survived all
10:27of that time and there were still people
10:29who were doing it, but these
10:30collectibles ebb and flow, right? So,
10:32the question is can they survive the
10:33downtime or are they going to be killed
10:35when the hype ends? So, the next
10:36characteristic is manufactured to
10:38demand, right? If they know that
10:40something is popular while they're still
10:42manufacturing it, then they're likely to
10:44overproduce it, right? Like incentives
10:47of companies are to make as much money
10:48as possible and so if they know
10:51something is popular, they will probably
10:53print because they want people to buy
10:55it, right? So, most collectibles that
10:57end up standing the test of time are
10:58ones that like had a fixed production
11:00run back before they were collected and
11:03so they're inherently scarce because all
11:05that's left is what survived from that
11:07period of time. So, you know, trading
11:09cards, unfortunately for the most part,
11:12live in an era where we are printing and
11:14they are collected at the same time they
11:15are being printed, uh which can lead to
11:17overproduction. And then finally, we
11:19have genuine demand being very, very
11:22niche. I don't think that the demand for
11:24this is very, very niche anymore. there
11:26was a time where collecting cards like
11:29may have been considered niche, but like
11:31now collecting cards is pretty
11:33mainstream, but even more importantly
11:35than that, like, these IPs have grown
11:37incredibly mainstream, right? Whether
11:39it's Pokémon or whether it's One Piece
11:42or Magic, Riftbound, people are familiar
11:45with these IPs, right? So, they're no
11:46longer niche. It's more a question of
11:48like, what are you most interested in?
11:50So, I'm going to go ahead and say that
11:51this does not apply to TCGs. So, let's
11:54look at the characteristics of success.
11:55So, the first is non-collectible use.
11:57Yes, we've said this before. I think
11:59that the TCG players, because you play
12:00them as a game, have non-collectible
12:02use. That's helpful. You know, do they
12:04capture art, culture, or both? I would
12:07argue that most TCGs actually do capture
12:09both. They're going to capture some
12:11aspect of popular culture.
12:14They are going to capture a version of
12:16art that people find appealing, whether
12:18it's like the original art from a manga
12:21or whether it's like a creation from a
12:23new up-and-coming artist that people
12:25really like, like a Shinji Konda or
12:27Akira Egawa or Peach Momoko or someone
12:29like that. The fact that you're able to
12:31capture both of them in a small package,
12:32I think, is a really really big point of
12:35success for TCGs. So, I'm going to go
12:37ahead and give this a yes.
12:39You know, do they have a long track
12:40record of success? So, this is going to
12:42be a yes and a no. And the reason it's a
12:45yes is primarily because of Pokémon,
12:47right? Most people have heard at this
12:49point that like Pokémon over the last 30
12:51years has exceeded the S&P 500 in gains.
12:54Um now, what they don't tell you is that
12:55most of those gains have occurred in
12:57like the last 5 6 years. So, it's not
12:59like it was like moving along steadily
13:02in a positive direction for its entire
13:03history, uh and it stayed that way,
13:06right? It was up for a while, then it
13:08was down and flat for a while, and then
13:09it boomed. But, I think the point
13:11remains that Pokémon came out over 30
13:13years ago. Magic came out even longer
13:15ago than that. And both these games are
13:17still kicking and still have a large
13:19audience of people who actively
13:20participate and want to collect them.
13:22And so, you know, while it's not as long
13:24of a track record as some things, I
13:26think that 30 years is pretty good. And
13:28so, I think that's some evidence that
13:31there will be staying power for these
13:32TCGs. So, I'm going to give them a yes.
13:34But, on the other hand, I'm also going
13:36to give them a no because it really
13:37varies from game to game, right? So, you
13:39know, we have Magic and Pokémon, which
13:41have proven a long track record,
13:43Yu-Gi-Oh! as well. But, we also have a
13:45bunch of new games that have come out,
13:47and we have no idea what's going to
13:49happen with them, right? We have
13:50Restbound, we have Lorcana, we have Star
13:52Wars Unlimited, we have the
13:54um new uh Cyberpunk TCG that's coming
13:58out, right? Like, even the games that
14:00have been around a few years, and the
14:02games that have proven that there is
14:03demand for them, like, they have not
14:05stood the test of time yet. So, while
14:06the category as a whole uh has proven
14:09that it can do it, that doesn't
14:10necessarily apply to every single TCG.
14:12So, the next characteristic of success
14:14is that no more will be made, right? So,
14:15this is the opposite of overprinting.
14:17Like, there is no way to overprint them
14:19because the fixed amount that has been
14:20printed is all that is going to be
14:22printed. And like, this is a mixed bag
14:24for TCGs cuz on the one hand, you have
14:27the new TCGs that are 100% going to
14:29print to demand, right? Uh and then you
14:31also have the newer sets from the more
14:34legacy TCGs that they may print to
14:37demand on. But, then you have the
14:38vintage stuff, and that is like fixed
14:41print runs, right? It's really unlikely
14:42that they're going to reprint them, at
14:44least in their original capacity.
14:45Obviously, like, Pokémon for its 30th
14:47anniversary is like reprinting a bunch
14:49of cards with a stamp on it. It's not
14:51quite the same thing, but it does, you
14:53know, have a little bit of a similar
14:54effect, maybe. Um so, I think this one
14:57is mixed as well. So, I'm going to say
14:59yes, like, for vintage, no more will be
15:01made, um but also that like, they're
15:04still going to be able to print the new
15:05stuff, and so, that is a greater risk of
15:08being overprinted.
15:09And then finally, is it recognizable as
15:11being expensive? I think the answer here
15:13is absolutely yes. We've gotten to a
15:15point where people know
15:17uh the cards are valuable, right? If
15:18Logan Paul can wear a Pokémon card
15:20around his neck, and everybody knows
15:22that it's a multi-million dollar card.
15:24You know, somebody pointed out in the
15:25comments, which I thought was really
15:26astute, that like part of the reason why
15:28Mangas probably have a premium is
15:29because if you look at them from far
15:31away, no matter who the character is,
15:32you can always tell it's a Manga, right?
15:34So, somebody puts it in their case that
15:36has a window and it is always a flex,
15:38right? Because you always know that it's
15:40a Manga and so it shows that you have
15:42taste or status in the same way that
15:44like a Rolex would. Um and so whether
15:46you like that or whether you don't like
15:47that, I think it's undeniable that in
15:50society these are becoming recognizable
15:52as expensive. So, what's my conclusion?
15:53I would say in general that I think TCGs
15:55will survive, but not all will thrive,
15:58right? I think TCGs check enough of the
16:00boxes of the successful collectibles to
16:02be able to survive into the long term.
16:05However, like given their increasing
16:07popularity, there's going to be more and
16:09more contenders that come out. I don't
16:11think that there is space for like many,
16:13many, many successful TCGs long term,
16:16right? But I do think that we will
16:18continue to see TCGs being an important
16:21part of like the collectible space, as
16:23well as the top end cards being
16:25considered legitimate assets in the same
16:27way that we consider like a watch or a
16:29painting or a coin to be a collectible
16:32asset. Now, I fully recognize that that
16:34is sort of like an unsatisfying answer,
16:36right? To say that like, "Yeah, I think
16:38it's going to survive, but probably not
16:40everything." without diving into like
16:42the specifics of what I think are going
16:44to survive and what the characteristics
16:45of those things are. I want to let you
16:47know right now that I am planning on
16:48doing videos on that. Two of the next
16:51videos that will be coming are going to
16:52be looking at specific TCGs and how they
16:55compare against one another and which
16:56one of those I think are most likely to
16:58survive and the characteristics of
16:59successes. But then I also wanted to do
17:01a video where I compare the TCGs against
17:05the category of collectible that I think
17:06it is most like to see what we can learn
17:09from the history of that collectible.
17:10So, if this wasn't the satisfying
17:12conclusion you were looking for, there
17:13will be much, much more. So, that's all
17:15I have for today. I hope you found this
17:17interesting. You know, I am bullish on
17:19TCGs long-term. I am bullish on One
17:21Piece in particular long-term. But, I do
17:23think the important thing to keep in
17:24mind is just the like these are
17:25volatile, right? They do have some of
17:27the characteristics of the collectibles
17:29that failed in the past. So, I think we
17:30want to be mindful of that and make sure
17:32that we're comfortable with the amount
17:33of risk that we're taking on. So, you
17:35know, as always, if you agree or
17:38disagree, please hit me up in the
17:39comments. If you like the video, please
17:40give it a like if you haven't already.
17:42Would appreciate a subscription. Uh, you
17:44know, if you're looking to purchase any
17:45cards, we have our TCG player and our
17:47eBay affiliate link, which helps us out
17:49a ton. So, with that, as always, I
17:51appreciate your time and I will see you
17:53in the next one.

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