Investing in collectible items has proven to be historically risky, but eBay has made a business out of the collectors’ hobby.
Turning a hobby into a lucrative investment is a dream come true, but like many investments, it comes with risk. That said, the world is full of so many incredible pieces of art, fun pastimes, and weird kitschy knick-knacks — and there’s a market for them all.
Comic books, vinyl records, porcelain babies whose eyes seem to follow you around the room — people are buying them and selling them on trading sites like eBay. Or sometimes, collectors will buy them and wait for the future when the item may be more valuable.
Whether or not these items will actually become valuable is anyone’s guess. And there is no shortage of folks out there guessing. Speculation has dealt some drastic blows to the collector’s economy in the past, from the comic book bust of the mid-90s to the Pokémon cards in Happy Meals.
But the most well-known example of our time has to be the infamous Beanie Babies craze that captured the attention and wallets of collectors starting in 1993. Years later, the cute little bean-filled critters — some of which used to sell online for thousands of dollars — aren’t worth much of anything.
Beanie Babies did cause a major shift in the collector’s market, though. The buying and selling of the toys helped eBay (EBAY) – Get eBay Inc. Report explode. In 1998, the company went public with a share price of $18, which jumped to $53 in the first day of trading.
Since then, eBay has become a household name in online bidding for rare items. And after a post-pandemic slump in revenue, eBay is looking to court more millennial and Gen-Z users by offering crypto payment options and honing in on more evergreen markets.
‘Magic: the Gathering’ & Pokémon Endure
In Hasbro’s (HAS) – Get Hasbro Inc. Report most recent quarterly earnings call, Hasbro’s CEO Chris Cocks said that its Wizards of the Coast brand saw a 15% bump in sales over the last year. What’s more impressive still is that most of that revenue came from one intellectual property in particular.
‘Magic: The Gathering’ is a fantastical, detailed game played by over thirty-five million gamers across the world. Some individual collector’s cards are valued at six figures — and at the moment, there are only really two trusted places online to find, buy, or trade a collectible like that.
TCGplayer is an online marketplace that specializes in trading cards. People who collect and play popular card games like ‘Magic: the Gathering’ can use the site to hone their collection — with a small fee to the site for the service. The site trades other popular cards as well, like Nintendo’s (NTDOF) ‘Pokémon’ and Konami’s (KNMCY) – Get KONAMI HOLDINGS CORPORATION Report ‘Yu-Gi-Oh!’. TCGplayer is one of two sites with enough of this media to make a real marketplace; eBay is the other.
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Ebay Acquires TCGplayer
Now it seems there will be one mega-destination for this popular trading card hobby. Ebay has purchased TCGplayer for $295 million, giving the online auction-house accesses to the site’s “tools, infrastructure, order fulfillment, and cart optimization” features.
The deal is expected to close in the first quarter of 2023. Though some fans of TCG’s setup may be afraid the platform will be subject to change, CEO Chedy Hampson assured his Twitter followers that TCGplayer would be run independently of the major e-commerce site.
In a press release, Hampson elaborated further.
“This new chapter allows us to continue operating independently within eBay, while also benefiting from their decades of industry experience and resources to deepen the connection between hobbyists and their communities. With eBay’s support, we will advance our Purpose, and expand our tools and services to improve the collecting experience online and in your favorite local hobby store.”
While the merger is clearly going to be very beneficial to both eBay and TCGplayer, the response from collectors hasn’t been as enthusiastic.
In the past, more competition for buying and selling collectibles means more variety in price and quality of products. This merger will make parent company eBay the ultimate destination for collectors and card game players, which could be yet another weathering factor in the volatility of collectibles. But for eBay stockholders, this could account for some good change in the future.