It turns out that authenticating and grading Pokémon cards is big business — like, really big business. Certified Collectibles Group (CCG), one of the biggest companies in the business, has been acquired by private equity firm Blackstone Group at a valuation of $500 million. Everything is totally normal, folks.
The sale follows a boom in demand for grading of Pokémon cards amid the pandemic. A lot of people seemingly had extra time on their hands to dust off their trading card folders, hoping they might have a highly rare Pokémon card worth thousands or tens of thousands of dollars.
Booming market —
CCG grades more collectibles than just Pokémon cards, but those have become one of its biggest markets of late. Personalities like Logan Paul have helped bolster the market for grading cards, as he’s been able to make millions of dollars buying mystery boxes containing Pokémon cards that ended up being worth tons of money. Twitch streamers have even gotten in on the hype.
A figure who goes by the name King Pokémon has helped. Real name Gary Haase, the 67-year-old has over the years managed to amass a Pokémon collection with an estimated value of over $10 million. Celebrities eventually began to take notice, sliding into his DMs to talk Pokémon and try and get involved in the scene.
Blackstone —
All of this has helped bolster demand for grading of cards — a mint condition card is worth much more than one with scuff marks on it. But $500 million for a company that merely authenticates cards — it doesn’t own them — seems a bit absurd. Apparently Blackstone thinks CCG can keep the momentum going, and that it’s not a pandemic-induced fad.
Some in the community won’t be happy about CCG’s sale to Blackstone, however. The firm has become something of a supervillain over its business acquiring homes around the United States only to make them permanent rentals. It’s able to pay about asking price knowing it’ll generate consistent revenue from them for years to come. But that makes it harder for regular people to buy a home and begin generating wealth of their own.
Being one of the most well-known grading card companies out there, it’s likely Blackstone hopes that CCG can control the market. If buyers come to view CCG as the de-facto place for grading, it will be able to decide the rules. It feels a lot like 2008 when investment banks paid credit ratings agencies to say their junk housing loans were actually good so they could sell them to some sucker.
There’s of course, another downside to all of this. Which is that trading cards are no longer an innocent game but a way for adults to try and make money by scooping up as many cards as they can and then never using them to actually play a game.
