Insights on International Transactions
Author :        Date : 25-May-09

As technology has developed through the years, the art of collecting in the video game arena has become a global experience.  Our quest for that last game to complete a system library is no longer limited to local garage sales, flea markets and the rare ‘Funcoland-type’ retail stores.  eBay, internet eCommerce sites and enthusiast forums have been the primary channels for these new purchasing gateways.  This contemporary international marketplace provides great opportunities for us collectors, but also is accompanied by a bevy of questions, misnomers and technical challenges.
This article will focus on many of these fronts, but not from the typical collector’s viewpoint as many posts do.  We will be interviewing Eric Krust, a successful video game proprietor based in Japan.

Eric is the owner and operator of Japan-Games.com and specializes in the selling of rare and obscure Japanese games and consoles.  Many of the systems that you see featured in my collection are a direct result of transactions I have had with him over the past 4 years.  He is a trusted ally and has agreed to take part in this interview to share some of his expertise and experience.

Before the actual interview, a couple of possible assumptions might need to be dispelled.  First, I am not affiliated with Japan-Games.com nor is this article intended to be an advertisement.  No – I don’t get any deals or commission or anything like as a result of this writing.  In fact, it will possibly only increase competition for items that he sells that I want.  I asked Eric to do this for the simple fact that I thought his input would be beneficial and a good read for everyone.

OK, enough of my bantering, on to the Q and A…

MG Thanks Eric for taking the time with me this afternoon to partake in this interview.  Let’s first tackle how you got into the video game business, as well as came to be based out of Japan.
EK I think it all started with a copy of Samurai Showdown 2 for Neo Geo.  I was in Japan and tooling around eBay and I noticed the game in auction.  I remember seeing it for sale in a local game shop and realized that people were selling games from Japan.  At that time I was an English teacher in Japan.  My background was in real estate but I took a year off to do something interesting and now it’s turned into 9 years….
MG Are you a collector yourself as well as a seller?  Would you consider yourself a gamer?
EK I’m a gamer but not a collector.  I used to collect but when you have a warehouse full of games it seems kind of pointless.  In a way everything I’ve sold is my collection.  It might be temporary, but there is a sense of satisfaction to have owned so many rare consoles even if I don’t have them anymore.  I do have one collection that’s nearly done with is a piece of software for every console ever released in Japan.  I’m about 90% done…. still waiting to get my hands on a CreatiVision title.  As a gamer I play Xbox 360, usually Team Fortress 2 with my Japanese friends.
MG What are some of your favorite games as well as consoles, both retro as well as today’s current generation?
EK There are a lot of different ways to rank consoles.  In terms of beauty I’d have to go with the Toshiba TVG-610 or the Hitachi VG-104.  For sheer coolness it would have to be the Palcom Laserdisc system.  For collecting I like anything obscure like the EPOCH Atari consoles or the Bandai Gundam PC.  I also have a soft spot for all of the Sega Dreamcast special editions and Xbox special editions from Japan.  I usually play Xbox or SNES/N64.  I have a small amount of games that I usually play over and over again.

In reality I like collecting information more than anything else.  I’d bet that my photo database for Japanese video games is the largest in the world.  What you see on my website now is probably less than half of what I have.  One day my collection will be to have the most comprehensive Japanese video game database on the plant…. if I can ever figure out the right way to do that… ;)

 
MG Thanks for sharing some of your background with us Eric.  Let’s move on to some of the burning questions from the community – international shipping – how costs are calculated and what are are the various shipping/tracking methods available, along with the pros and cons of each?
EK From Japan you can use EMS (3-5 days), SAL (3 weeks), or SEA (3 months).  All have tracking. SAL and SEA don’t offer insurance to all areas, notably the UK, Canada and Germany.  It would be impossible to give all of the information in just one answer but this page will help:
http://www.japan-games.com/wiki/pmwiki.php?n=Information.Shipping.
Cost can vary between Sellers. The fast-changing dollar-yen rate causes havoc with that sometimes.
MG Another hot topic is how to run a system released in Japan at my home – from electrical to television requirements.  Can you break down what is needed for both North America and European nations?
EK The US and Japan have no special requirements.  You can plug in a Japanese console into a US outlet and vice versa without problems.  One thing you should never do is mix and match power cables, though.  Don’t use an American plug in an American outlet on a Japanese console.  Just use the Japanese plug and you’ll be fine.  Both countries are NTSC.  The only issue you’ll have to worry about is region protection.  You can play older RF switch box games by using a regular composite cable and adapter and tuning your TV to channel 96.

European requirements are more tricky.  You will have to use a step-down transformer because the power is different and that can vary by region.  You also have the PAL/NTSC issues with software.

MG We know about eBay, Game Gavel, Craig’s List and the like, but what exactly is Yahoo Auctions?  Why is bidding/participation limited to people with shipping addresses in Japan?
EK Yahoo is the dominant internet force in Japan.  Because of that their Auction system is the dominant force in online auctions in Japan.  eBay tried to break into the market about 10 years ago but never gained traction.

Japan has natural barriers with language and geography.  They have little to no practice using English beyond school textbooks and doing business over the internet is something they’ll naturally shy away from because they won’t ever fully understand the logistics of everything and their society has enough wealth where they can just sell to a Japanese Buyer and not worry about it.  That’s to say they don’t need international Buyers.  To them, selling to overseas Buyers is confusing, time consuming, risky and of little financial benefit to them overall.  They just don’t see the benefit of opening up that can of worms for what amounts to a few extra dollars when they can just sell it to a Japanese person and not worry about anything.

Proxy bidding services act as the middle man where there is something between the Buyer and Seller to facilitate the transaction for a small fee.  That’s really the only way that someone will be able to bid on Yahoo from overseas and actually have it be worth their time.

 
MG I have heard of proxy bidding services?  What exactly is this and how does it work?
EK The function of a proxy service is to complete the transaction in a way that’s familiar to a Japanese Seller.  The overseas Buyer places a bid and the proxy handles the transaction for them.  The proxy will contact the Seller, make payment, receive the item in Japan, then ship it to the Buyer overseas.  From the perspective of the Seller he’s just sold it to a Japanese person living in Japan.
MG What three items do you pinpoint as being the largest contributors to your success as an international dealer?
EK I’m assuming you’re talking about business practices and not actual game related items?  It’s not really rocket science.  Just know what you’re selling, present it accurately and treat people fairly.  Being professional in an inefficient marketplace goes a long way. There’s still a lot of room for that.  About half my sales are through repeat customers.
MG Say I am considering getting into the business of being a reseller of video games and related items.  What would be three critical tips you would have for me?
EK Know your product, test and present the product to eliminate all Buyer fears, then handle the business end of things professionally.  Oh, yeah, and find a cheap source to buy from…. but good luck with that. ;)
MG What about tips for being a successful buyer?  And no, I am not asking you to give away any of your trade secrets, but feel free to do share some if you would like ;)
EK In reality all Sellers are really Buyers.  Without good product then you’ll never really be a Seller.  You need to know what a good deal is and what isn’t.  You need to know a lot about your product because knowing one little change or special model is worth a lot more than others.  You need to know rarity and be able to price things properly when there’s sometimes no other sale to compare it to.  The market goes up and down sometimes, so you need to know what will sell now and what won’t sell now.  Right now the financial crisis is hitting everyone, and the only good things selling are the rare consoles.  A lot of the "standardized" items aren’t selling at all.  That means I’m not buying a lot of those items right now.
 
MG One final question.  Where do you see the video game marketplace in the next 5 years?  Will eBay alternatives like Game Gavel continue to spring up on the internet?  What about locally in our respective backyards – will we see more local retailers in this area?
EK eBay will always be the dominant force. I’ve had a couple of websites for sales in the past but it takes a very, very long time to get it noticed and it takes a lot of money to advertise and keep the site running.  In the end I knew I could just throw everything up on eBay and have it all sold in 10 days.  So, that’s what I did.

There’s always room for niche sites like Game Gavel.  I think they’ll continue to grow.  But in the end no matter how angry people are at eBay, no one can match their exposure.  The other sites might be better, cheaper, more Seller friendly, but in the end it comes down to exposure and if you depend on a steady stream of sales to keep yourself in business it’s hard to break away from eBay.

I don’t know enough about the video game marketplace overall to really comment on the industry as a whole, but one positive thing seems to be the small developers for the newer consoles, games you sometimes see in places like Xbox Live.  The larger software developers have too much overhead that they tend to release the same titles over and over again as a safety net.  The smaller titles with lower overhead can experiment more with being creative.

When I bought my Xbox 360 I never thought I’d spend so much time playing downloaded titles for under $10 that are just fun to play, games like Heavy Weapon, 3D golf, UNO, etc.  I think those games are the heart and soul of gaming and it’s getting a second chance.  When people talk about their favorite games they almost never mention graphics but that’s what the selling point is for newer games.  People don’t play Bomberman 20 years later because of the graphics, they play because it’s entertaining.  There will always be a need for the large companies to make games like GTA IV, but I think it’s equally important to have the smaller shops making more entertaining titles to keep people interested in video games overall.

MG Thanks again for taking the time with us Eric and sharing some of your insights and knowledge with me and the community.  It is definitely appreciated and I can confidently say that we all found it to be very beneficial.
EK No problem.  Glad to help out.  Let me know if you have any follow up questions I can help you out with. Thanks!

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