Pokémon cards have become a multi-billion-dollar unregulated industry, and its homeland is now considering clamping down.
The Japanese government has set up a taskforce to look at regulating the trading card market, as soaring prices raise concerns about scalping, counterfeiting and money laundering.
Watanabe Sho from Hareruya2, a speciality card store in Tokyo, has watched interest in the 30-year-old game “skyrocket” in the past five to six years.
Watanabe Sho holds out a Grade B Pikachu card. (ABC: Natalie Whiting)
“To give a recent example [from the store], a well-preserved Pikachu card from the very first booster pack was sold for about 10 million yen ($89,000),” he said.
The six-level store attracts both local and international interest — with many tourists keen to purchase Japanese-language cards.
Pokémon cards — particularly rare ones — have been surging in value. (ABC: Natalie Whiting)
But the surging prices are putting many cards out of reach for fans.
“I think the expensive cards are all pretty ridiculous,” said 20-year-old June, who was visiting the store during a holiday from America.
“I wish they were cheaper because I want to collect all of them.”
The most expensive collectables are often early or special edition cards, but new release sets are also being snapped up and resold at higher prices.
“The new set that just came out in Japan a few weeks ago is already $200 for a box,” said 18-year-old Noble, another customer in the store.
June and Noble on their visit to speciality card store Hareruya2 in Tokyo. (ABC: Natalie Whiting)
American YouTuber Logan Paul set a record this year when he sold an ultra-rare card for $22.6 million.
The card was a Pikachu Illustrator, one of only 40 issued in 1998, and the only one given a grade of 10 — meaning it was in near-perfect condition.
He had purchased it four years earlier for $7.5 million.
People risking ‘financial ruin’ for Pokémon cards
The incredible gains on rare cards have created an alternative asset class, but the market can be volatile and speculative.
Lawyer Fukui Kensaku, from Kotto Dori Law Office, said there was “reckless speculation” in the market, and some “ordinary people” were risking “financial ruin”.
“Another issue is that it’s prone to attracting crimes like fraud and theft when prices are skyrocketing like this in a bubble-like manner,” he said.
Grade 9 Pokémon cards valued at ¥500,000 — roughly $4,440. (ABC: Natalie Whiting)
He pointed to people swapping out cards and repackaging, creating counterfeits, or even straight theft of valuable cards.
While Logan Paul has made plenty in the trade, he also fell victim to a box of fake cards, which cost him almost $5 million.
Mr Fukui said there was also a risk of the trade being “exploited for illicit overseas money transfers, such as money laundering”.
Classic characters featured on a Pokémon card deck set. (ABC: Natalie Whiting)
Government eyes regulation — but there are ‘hurdles’
The Japanese government has launched a parliamentary group to look at the issues created in the trading card market, for games like Pokémon and Yu-Gi-Oh!
It will consider ways to prevent illegal resales and counterfeiting, including authentication methods and improving technology to try to detect fakes.
But its chair, Kihara Seiji, has already warned that the group “must not strengthen regulations to the point of destroying the market”.
Pokémon cards are valued based on their grading levels. (ABC: Natalie Whiting)
Mr Fukui said while restrictions on reselling cards could be legally enforced in some situations, he did not think regulation alone was the answer.
“If we were to pursue legal regulation alone, the first hurdle would be that even if a law were enacted, it would only apply within Japan,” he said.
He believed the parliamentary group would aim to work with industry and resale platforms to take a more “comprehensive” approach, noting international cooperation would be essential.
“The main focus is on ensuring that trading cards become something everyone can enjoy more — in other words, fostering the healthy development of the market.”
The game plays on
At Hareruya2, Watanabe Sho was worried some fans might be “drifting away” from Pokémon because certain cards were now out of reach.
A Pokémon store owner says skyrocketing prices have created a “gloomy atmosphere” among fans. (ABC: Natalie Whiting)
“I think the saddest thing is when people who simply want to buy something … can’t actually buy it,” he said.
The Pokémon Company is trying to combat scalpers with a lottery system, where customers need to apply using official Japanese IDs for some special releases.
“If we can create a situation where everyone can buy at least a little bit, I think this current gloomy atmosphere will start to fade,” Watanabe Sho said.
And in the game of Pokémon itself, a more expensive card was not necessarily a better card, so it remained an even playing field.
“As long as the effects in the game are the same, that’s good enough for me,” 26-year-old player Inomata Shohei told the ABC, during a Pokémon battle.
“But the dedication of the collectors is impressive.”
Fans of the game continue to play on. (ABC: Natalie Whiting)
His opponent in the battle, 21-year-old Kamatake Masamichi, described himself as both a player and a collector.
“Whether you enjoy the art or the gameplay, I reckon, at the end of the day, we’re all enjoying Pokémon cards equally,” he said.
And while he described some of the resale prices as “crazy”, he said there was always the hope that you could buy a regular pack and discover a rare card.
“It’s something to dream about,” he said.
A deck of Pikachu cards being shuffled at a trading card session. (ABC: Natalie Whiting)
AloJapan.com