Pokémon Explained

ILLUSTRATION BY ADAM WAITO

Luke Winkie

Consider the Charizard. A burnt-orange dragon with a set of turquoise wings and an inflamed tail. His Pokemon card was notoriously powerful — equipped with 150 hitpoints and a sheen, holographic background — making it an enviable piece in countless middle-school hallways throughout the late ‘90s and early 2000s. Six years ago, a mint condition copy of a rare Charizard variant might fetch a cool $9,000 at auction. Not bad, but not equivalent to some of the true blockbusters in the collecting industry. (This dragon could never hold a dragon-lit candle to Honus Wagner.) But something massive did shift in the last year. Recently, that same Charizard card sold for over $220,000, as Pokémon has enshrined itself as one of the many hot spots in the ongoing card renaissance.


The evidence is everywhere. Last month, a sealed box of first-run Pokémon cards sold for over $400,000. YouTuber and amateur boxer Logan Paul is making videos showing off his $2,000,000 Pokemon haul. Hustle guru Gary Vaynerchuk has dedicated a suite of content to his newfound obsession with Blastoises and Venusaurs. For some, it might start to feel like if you're not putting your money in Pokémon right now, then you're playing the game wrong. 


The market usually follows its own insular logic — baseball cards accrue value because of their longevity and scarcity, the price-tag slowly ratcheting up over time. So it's surprising to see these same skyrocketing valuations take root in what remains a mass-produced children's card game that peaked almost 30 years ago. It wasn't long ago when Pokémon cards, while still treasured, never touched the holy grails of collecting. What's behind the boom?


First things first, there are certain universal caveats pulling the strings. The world remains mired in the coronavirus pandemic, and that has led to a general sense of precarity in regards to the stock market. Those factors have motivated a wide swathe of investors to put some of their money in places other than stocks. Sports cards are hitting historic pricing highs, as are vintage NES games and cryptocurrency. In that sense, Pokémon is just another benefactor in the alternative assets’ rising tide.


But even within that context, Pokémon cards remain stridently unique compared to their peers. Simply stated, the Pokémon market explosion is coinciding with the steady maturation of the world's millennials. The children who spent their youth tearing open booster packs in hopes of finding that erstwhile Charizard to furnish their three-ring binders finally have the disposable income to make their dreams a reality. Collectibility so often finds its lifeblood in the astral forces of nostalgia, and this playing field is no different.  


"When it comes to sports cards, people tend to look for rookies, because their price might go up the longer they have a career. But in Pokémon, people always have a favorite," says Luis Ruezga, host of the Pokémon Cards and Coffee podcast, which focuses on the ebbs and flows in the hobby's market. "Someone has a favorite character, or a favorite energy type, so you base your collection off of those things. You'll collect one of every grade of Blastoise or whatever. That will be there for a while. There will always be people who want their favorites in their collection."


Ruezga is right. Some of the highest-priced sports cards to come down the pipeline in recent years bear the faces of young stars like Luka Doncic and Giannis Antetokounmpo. Those two are great players, but they're also both in their 20s — nobody with buying power has grown up with them yet, and purchasing their likeness has far more to do with the profit implications than any emotional ties. Naturally, Ruezga tells me that the big-money items in Pokémon all belong to the first vintage set that was unveiled back in 1998. The Pokémon within that catalogue will be familiar to anyone who came of age at the end of the Clinton administration (i.e. Pikachu, Bulbasaur, Squirtle),  all of whom were bolstered in the culture by video games, movies and television shows. Hundreds of Pokémon have been added to the roster in the intervening years — currently, the number stands at 898 — but it is that original roster of 150 that attracts the most dollars. 


"A year ago, a Charizard would be the same price as a low-end Mercedes, and now we're past the quarter-of-a-million threshold. It's priced a lot of people out," says Ruezga. "Modern cards are attracting a lot of people who are getting into the hobby, or people buying up boxes with the hope that they'll be a lottery ticket someday."


Thus far, Nintendo (the current license holder for Pokémon cards) hasn't pivoted to appease buyers who are jumping on the scarcity train. In fact, Ruezga notes that, due to Covid, there's a huge print shortage for new cards right now. Sports card barons, like Upper Deck and Panini, have taken measures to juice up the rarity of their product. A box of Panini Hoops Trading Cards retails for $350. A Giannis card, emblazoned with a cutout from his jersey, sold for $1.8 million. It's the only copy in existence. Pokémon, on the other hand, exists in an entirely separate category. "When you look at these crazy numbers in the sports market, you're looking at an artificial scarcity," says Charlie Hurlocker, Pokémon expert and a consultant at the Certified Guaranty Company. "We don't have an equivalent like that in Pokémon." No matter how much money is dumped into this space, don't expect Nintendo to start printing limited-to-5 Pikachu inserts anytime soon. No matter what happens, Pokémon will be a trading card game first, and a collectible second.


Hurlocker even notes that some of the rarest Pokémon artifacts on the market are promos that were distributed to tournament champions or raffle winners. The most famous of these is "Pokémon Illustrator" — a ceremonial card featuring an image of Pikachu wielding a pen — which were handed out in a drawing contest at a comic convention in Japan. (It's believed that only 39 exist.) Those cards don't necessarily scratch the same wistful, liberatory itch as a Charizard — no kid was desperately hoping to find a Pokémon Illustrator in the late '90s — but Hurlocker tells me that value derived from pure scarcity is still a worthy principle to at least keep in mind in the Pokémon business. 


"There's always been a question of whether someone should invest in cards that are expensive for their popularity, or their rarity. I think people should diversify in both, because both have their merits in different ways," he says. "A lot of money that's driven into the industry comes from the ubiquity of conversation. The question becomes, if all of the Illustrators are dumped in the market at the same time, would they carry the same price if all of the PSA 10 first edition Charizards were dumped into the market at the same time? I'm inclined to say no, just because the breadth of demand for a Charizard is much higher. But in the current market, and you're blessed to choose between one or the other, I'm a bigger fan of going with the rarer card, even if it's niche."


Of course, Hurlocker also encourages anyone interested in Pokémon to not overthink their initial investments. This is a wild new sector of collecting, nobody knows exactly what prices will and won't stick. Your best bet is to stick to the things you love. Grow up loving Mewtwo? Or Geodude? Then jump in. The horizons are bright. Pokémon is red hot again. Time is a flat circle.


"You need to find cards you like and buy them," finishes Hurlocker. "If you're coming from a place of an investor, you're not going to be able to anticipate the demand of collectors if you have no experience collecting. I encourage people to participate before they try to make money, because you need to have the experience in order to make the right call with your money."


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