Pokémon cards are the best collectibles

In 2015, a collector paid $2.4 million for a large self-portrait by Chuck Close, painted in the artist’s pixelated style. In 2017, Close was accused of sexual harassment. In 2020, a portrait of his first wife, of similar size and quality to his self-portrait, sold at auction for just $615,000.

The 2015 collector lost roughly 75% on the artist’s misbehavior. 

This can happen posthumously, too. After a biography of Eric Gill, one of Britain’s greatest sculptors, accused him of abusing his family (including the dog), auction houses refused to sell his work at all. The biography was published 50 years after his death. His collectors lost 100%.

Collectors of Pokémon cards never have this worry — because Snorlax will never do anything to embarrass you.

Pokémon don’t get hurt, either. The collector who paid $1.2 million for a Macklin Celebrini card this weekend is making a large bet that Celebrini, just 20 years old, will stay healthy long enough to break a lot of scoring and assist records in the NHL. 

Collectors of Charizard cards, by contrast, can rest easy knowing that he will never miss a battle due to injury — not a single one — and is at no risk of suffering a career-ending injury. 

He will never retire, either. Charizard is simultaneously the Babe Ruth of the 1920s and the Shohei Ohtani of the 2020s — equally relevant to every generation of Pokémon enthusiast. Forever.

Consider as well that, unlike baseball or hockey, Pokémon is popular nearly everywhere, its  geographical reach rivaled perhaps only by soccer.

Sports is a larger market, of course. But the sports card market may have a demographic problem as younger generations aren’t as emotionally invested in sports teams the way older ones from the monoculture were. No kid sits down to watch a three-hour baseball game from start to finish anymore. Instead, they watch YouTube, play video games, and look at their phones. Pokémon is native to these mediums.

Perhaps most importantly, The Pokémon Company is not out to extract every last dollar from its collectors.

Sports card collecting is now defined by the lottery-like dynamics of manufactured scarcity. Collectors are driven to open hundreds or thousands of packs of cards in hopes of hitting a rarity like the 1-of-1 Macklin Celebrini card that sold for $1.2 million. 

The owner of a 1-of-1 Cooper Flagg “debut patch” card estimated to be worth at least $2 million won the card by paying $515 for the rights to all of the Dallas Mavericks in an unopened box of cards. He watched someone open the box on a livestream.

The rest of the cards from the box were likely discarded. They serve only to establish the odds and pad the price of admission.

Every year, Topps, Panini, and Upper Deck print billions of cards that are more or less immediately discarded by collectors opening packs looking for a rare card.

Pokémon collectors chase rare cards too, but the experience is less financialized.

Fewer of the cards are discarded: At least a few are kept for playing the game. Others might be kept just for the art, because a kid likes a particular character, or because someone’s a fan of the illustrator. 

The Pokémon Company does not turn its packs into lottery tickets by issuing ultra-rare 1-of-1s that promise to make a lucky collector instantly wealthy.

In sports, the supply of even scarce cards is constantly diluted by the hundreds of new rookies introduced to professional sports every year. Each of these get dozens of rookie-card variants: a 1-of-1, -10, -15, -25, -50, etc. — every gradation of scarcity, designed to extract the maximum amount of dollars from collectors. 

No Nintendo-related product would be so crassly financialized as to display the print run right on the front of the card. Pokémon cards are designed with a Japanese sensibility of quality that treats the card itself as an object of design and significance independent of its scarcity.

Similarly, the Japanese grading company ARS puts its ratings on the back of the case, so as not to detract from the beauty of the card. The case is attractive enough to display on a living room mantlepiece. The cards are graded for their overall aesthetics. The company limits the number of cards it grades so as to ensure each gets careful attention.

Cards graded by the US company PSA, by contrast, display its ratings on the front of a utilitarian plastic case evocative of mass production. PSA grades cards as fast as it possibly can, maximizing its profits in the same way the card issuers maximize theirs.

There are a lot of sports cards to grade. 

Since 2016, for example, Topps has sold Topps NOW cards: an irregular stream of releases tied to almost any semi-notable sporting event —  the NBA Finals, the NFL Draft, the Home Run Derby. Each release includes a handful of rare “parallels,” but the odds of pulling one are stacked against you because Topps prints exactly as many cards as collectors order, burying the rare cards in hundreds of thousands of common ones. 

In other words, Topps floods the market with exactly as many cards as the market can possibly bear.

The Pokémon Company, by contrast, keeps its card issuance to a regular schedule. 

Some Pokémon cards are of course rarer than others. The scarcity tiers currently range from common, which you find in every pack, to Hyper Rare. That’s part of the fun. To pull a Hyper Rare card like the Mega Lucario ex, you’d have to open an estimated 1,260 packs.

To pull an ultra-rare baseball card like the Topps 1/1 Chrome Superfractor Shohei Ohtani card, you’d have to open an estimated 389,424 packs. 

The packs cost about $11 each.

Pokémon has ultra-rare cards, as well. But none came from packs. Instead, they’re issued directly to someone who has done something to support the community or further the brand.

The single most valuable card, for example, is a 1/39 — the Pikachu Illustrator — all 39 of which were awarded as prizes in illustration contests. Other rare cards, like the Trophy Pikachu No. 3, were awarded to podium finishers in card-playing tournaments. 

With sports cards, by contrast, the only purpose of scarcity is to sell more packs.

Escape velocity

The Pokémon Company could sell far more — and more expensive — packs if it were as hyper-focused on scarcity as Topps is. But to safeguard the long-term value of the Pokémon brand, it hasn’t.

So collectors are doing it for the company. Onchain gachas put cards from every era into one-card packs, which collectors pay as much as $5,000 to virtually open in hopes of pulling something rare. 

This is a much more civilized way to do scarcity. 

For one, it recreates the thrill of opening packs leaving behind billions of cards that nobody wanted — every card pulled in a gacha has at least some resale value.

It avoids the limitation of desirable cards only being able to be pulled once. Cards are often resold to the gacha, to be pulled again by another hopeful collector.

Onchain is also a better way to trade cards.

Venues like Collector Crypt and Beezie have clean, easy-to-navigate interfaces that neatly present all the information there is to have on a card, in a standardized format, along with a high resolution photo. 

eBay feels like a flea market by comparison.

The fees are also far lower than on eBay. And if you keep your card warehoused with the venue, there's no sales tax to pay, either.

You can trade sports cards on those venues, too, but it's Pokémon collectors that have really embraced onchain gachas and trading, perhaps because they tend to be less set in their ways. 

Pokémon cards were introduced in 1996, which means some of its first enthusiasts are still under 40 years old — Millennials just now entering their peak earnings years.

And their peak nostalgia years, too.

That likely explains why Pokémon cards have outperformed just about everything recently — most AI stocks included. The website Card Ladder estimates an index of top Pokémon cards is up about 350% over the past year (and ~8,000% over the last 20).

Pokémon cards turned 30 this year and their booming value appears to validate Harry Rinker’s rule of 30: that the value of any collectible is purely speculative for its first three decades, after which sustained adult nostalgia either validates it as an asset with enduring cultural value or relegates it to the bargain bin.

Most are relegated to the bargain bin, because nostalgia is strictly generational. One generation's treasures are another's junk.

The booming price of Pokémon cards, however, suggests they have hit generational escape velocity. 

Soon, Millennials will be introducing their Gen Alpha kids to the memory-making magic of Snorlax and Charizard.

— Byron Gilliam