Hidden economies: The secret world of virtual pet collectors

More than three decades after it was launched, Tamagotchis have built a dedicated following

Tamagotchi economy and virtual pet collectors
Tamagotchi economy and virtual pet collectors
  • Entire economies have emerged around collectibles like the iconic Tamagotchi, an electronic pet that first emerged in the 1990s and now been rebranded and reborn.
  • At first, the electronic pet lived its life in a small pixelated screen but newer models have color screens and new apps aimed at younger aficionados. Still, the original allure of the self-contained life-like electronic pet has created a devoted following.
  • Along with a devoted following, Tamagotchis are also at the heart of their own hidden economic phenomenon and interesting stores of value with traders and price wars that have seen some models fetch thousands of dollars.

Not long ago, a ‘Tamagotchi for hackers’ raised over $4 million on Kickstarter, a crowdfunding site. The Flipper Zeo, an open-source, multi-tool in the form of a dolphin virtual pet, had more than 31,000 backers five days before the campaign ended.

As a tool, the device acts like a swiss army knife for hackers but it keeps users interested by expecting them to make Flipper the dolphin happy. If users go too long without using it, Flipper gets mad and reminds the user to meet his hacking needs.

The device was inspired by the pwnagotchi project, a program that taught people how to hack WiFi networks using a Tamagotchi inspired artificial intelligence (AI). The thinking behind the pwnagotchi project was that the Tamagotchi is “a cultural touchstone for many Millennial hackers as a formative electronic toy from our collective childhoods.”

Turns out that nostalgia is a powerful motivator, and not just for user interfaces.

Brands like Lego, Coca Cola, Pokémon and KFC have long used nostalgia to great effect to kick off marketing and rebranding campaigns. Its trickle effects can be seen in not just the mainstream markets but underground economies as well.

Tamagotchi, the original virtual pet from toy corporation Bandai that was first launched in the 90s and became a toy phenomenon, has also drawn on nostalgia to create and maintain a presence for decades.

Tama history

Originally a pixelated electronic pet that required its owners to keep it alive through basic functions like feeding and playing with it, the Tamagotchi has evolved and become more complex.

After the initial wave of popularity (and production) died down, Bandai revived the franchise in the mid-2000s with the Tamagotchi Connection. The series boasted connectivity to other units and, eventually, to computer software and a website. Later releases even had ‘jobs’ for the characters.

Colour screen releases started emerging in Japan starting in late 2008. Though there was a Tamagotchi IDL series that was translated and released in Asia Pacific markets, the color screen models were largely absent from Western stores until last year.

In May 2019, Bandai America announced the launch of the Tamagotchi On, an English version of the Tamagotchi Meets line in Japan. The series had a unique gimmick, users could breed and raise unique Tamagotchi characters based on genes inherited from the previous generation. It also had an accompanying app where users could play in and find suitors with desirable traits (genes) to marry.

“The new experiences and social connections raises the fun-factor and provide users with endless hours of entertainment,” said Tara Badie, Senior Director of Brand Strategy at Bandai America. “We wanted to keep aspects of the original Tamagotchi gameplay but make it more relevant for today’s users by adding a colored digital screen, new ways to connect and millions of different characters.”

A year later, Bandai released the Wonder Garden On, a truncated version of a Meets model in Japan.

“Last year when we launched Tamagotchi On, we were overwhelmed by the support from consumers,” said Badie. “It’s amazing to see those who remembered the Original Tamagotchi from the 90s pick-up the Tamagotchi On as well as watch young users fall in love with having a virtual pet.”

The economics of electronic pets

In 2019, Bandai claimed that the Tamagotchi franchise had sold over 82 million units globally after 22 years in the market.

As the disposable incomes of millennials grew and they started families with kids of their own, corporations like Bandai started reviving brands and images to strike an emotional chord with this new generation of game players.

In something of a surprising turn of events, it was not just the new releases that experienced a sudden boost in demand.

Prior to the current revival, the virtual pets were sold and traded in collector forums like TamaTalk and Tama-Zone. How much they were bought and sold is virtually impossible to pin down, as is the total dollar value of all these transactions.

“They were all private transactions, we (admins) didn’t get involved,” says Ra, a collector and YouTuber who has been involved in running both forums.

But the numbers are not small. The now-defunct Tama-Zone forums generated more than 302,000 posts from 2006 to 2018. According to Tamagotchi Topsites, message boards dedicated to the toy have amassed more than 15 million unique page views (and counting!) collectively.

With the emergence of social media platforms, the fan base has migrated to specialized groups to discuss, share and procure these virtual pets. Commercial platforms like eBay, Yahoo Japan Auctions and Taobao have become popular platforms to discuss and trade these toys.

Ra is now more active on Facebook than in the forums of old.

“Facebook groups, in particular, are what changed the sales format. Traders (a Tamagotchi buy/sell group) gets dozens of new members and sales every single day. And the admin role is a lot more involved, trying to enforce the group rules to make it as safe as possible for all parties,” says Ra.

Social media groups draw a mix of older and newer fans alike.

Eric Fields, one of the administrators for the Tamagotchi Collectors group that boasts around 6,500 members on Facebook and more than 2,000 on Discord, was among those that experienced the initial craze for the virtual pets.

“In mid-1997, I was 13 years old and I remember seeing information about Tamagotchi on our local news. The broadcast mentioned the craze would be coming to the U.S. soon, which prompted me to call Toys R Us almost daily to ask if they were getting any. Finally, the release day came I was in my grandparents’ car parked outside TRU waiting for them to open. I remember my first model was the transparent blue shell with yellow buttons,” says Fields. “I played with my Tamagotchi for about a year until I lost it. I couldn’t convince my parents to give me money for another so the interest in Tamagotchis faded.”

It actually wasn’t until a few years ago that he discovered that the virtual pet franchise was still going strong.

“In late 2016, I was shocked to see Bandai was still making new models (the M!x had just launched) and even more shocked to find a large online community focused on them,” said Fields.

By 2018, Fields had amassed “a little over 300 virtual pets”. He has not kept count of his collection since then.

He isn’t the only member of the “90’s kids” generation to jump on the v-pet bandwagon over the last few years.

“I was not allowed to have Tamagotchis when I was a kid. A few years ago, someone got me a Tamagotchi M!x as a gift and I instantly fell in love,” says Hong Kong-based collector Yvette Lam.

She dove deep into the hobby and quickly found a whole new world and more than 350 units to add to her collection.

“I then started collecting other models and custom shells half a year later,” said Lam, who has an affinity for “beautiful Tamagotchi shells and cute characters”.

Customized shells featuring either intricately painted artwork or cast in resin to create unusual colors or designs have become popular among collectors. It turns out that there are popular ‘Tama-artists’ around the world, from Japan and China to the US and Russia.

Lam says she enjoys finding “rare and coveted pieces”.

Active micro-economy

And the craze has also spawned a micro-economy among creators that sell customized cases, stands, charms, and even programmable characters that can be raised on the devices themselves.

The highlights of Lam’s collection are four units of the Tamagotchi Conan ID, of which only 100 were made for a giveaway in the 3000th issue of the Shonen Sunday Manga Magazine. Those particular models have gone for upwards of US$3,500 in recent sales on auction sites. A new Tamagotchi sells on Amazon for about US$20.

“My other rare ones the Tokyo Train Suku, which go for up to US$775 per unit. These are the most expensive ones,” said Lam.

Other popular models like the Devilgotchis, a Japan-only release in 1998, have also gone up in value. These regularly go for US$300 each and are particularly sought after for Halloween hatches when fans communities run themed hatches.

Bandai’s other virtual pet franchises have been no less lucrative. Units from the Magical Witches series have sold for up to US$775 and ‘digivices’ from the still popular Digimon franchise frequently double or triple in price just months after release.

Rare Digivices have fetched up to US$2,000. Ardent collectors have also placed ‘bounties’ for rare and highly sought after models in collector circles and e-commerce sites.

Even some knock offs have risen in value. A China-made model known as the “Tamagezi” became popular amongst collectors but had its sale and production halted after Bandai threatened legal action. Prices for the Tamagezis subsequently rocketed up to the US$250-300 range for a few years until a second version was released in July 2020.

Gaming the system

But not all virtual pets are necessarily worth a fortune. There are still many that struggle to earn double-digit price tags.

The value of what a device is worth often boils down to a mix of individual perception of supply-demand, budgets and the history of previous transactions on e-commerce sites.

“Unfortunately, pricing factors are convoluted, even to me. Tamagotchi pricing can be manipulated easily and quickly when you least expect it. For example, there is the Limited Edition Argos Music Star that was always desirable and sold fairly high (around US$100) until one time an eBay auction went crazy between two bidders and jumped to US$600+,” says Fields.

But this is where things get murky.

“This auction inevitably was canceled as the buyer didn’t pay and it was speculated that at least one of the two bidders was a shill bidder. However, the damage was done and screenshots of the high price of the winning bid spread across the groups and ingrained into everyone’s mind that the Argos edition is in fact worth this much,” says Fields.

“Ever since that auction, the Argos has been selling for US$200-400 depending on condition. You could argue that this is now the true and accurate value since people are willing to pay for it.”

Relying on platforms like eBay as a point of reference can be problematic, especially for new collectors. Not only do they give a distorted view of an item’s value, but purchases also end up raising the price points in the overall collector ecosystem.

“A common occurrence is that someone new will join the hobby, not realize eBay listings are mostly overpriced and purchase several average Tamagotchi models for twice as much as they normally sell for among collectors. These sales show up in the “Sold” history of eBay and encourage new sellers to also list their Tamagotchi for the same price,” says Fields.

“As I mentioned earlier with my Argos example, they definitely have the potential to manipulate the prices. Many of the prices on eBay are overpriced, or underpriced (these sell quickly) because the people listing them for sale usually don’t know the value.”

Members of collector groups have been doing their bit to stabilize the prices.

“As far as helping to manage the stability of the market, we do have some members that put together a price guide two years ago. A lot has changed in two years and the community has grown by thousands, so not all of the prices are as accurate as they once were, but it serves as a great baseline for new members to discern whether a Tamagotchi being sold at $20-plus is its normal value versus $200-plus,” says Fields.

Responsible pricing and sustainable transactions based on the guide are encouraged but, ultimately, it’s still the prerogative of the collectors and the sellers to list pieces their desired price point.

Collector groups have also been active in naming and shaming sellers that have scammed or scalped fellow fans.

Nonetheless, the growing accessibility of e-commerce has only served to enhance the collector community.

“Overall though, these e-commerce platforms are a net positive once you’ve learned how to spot overpriced listings. If it wasn’t for these sites, finding a Tamagotchi might be too inaccessible and the community would be incredibly smaller than it is today,” says Fields.

Next-gen players

The current crop of ardent collectors consists mainly of those who grew up with memories of the Tamagotchi phenomenon in the era before toting some kind of device anywhere and everywhere became the norm. The question now is whether Tamagotchis have a place with kids who already have much more advanced devices in their smartphones.

“It will hold up well. It is just not the same playing on an app. Tamagotchi is much more than raising a virtual pet,” says Lam, who also collects related merchandise like stationary, cases, watches and charms.

To stay fresh and relevant, Bandai has also been pulling a ‘Lego’ (a near-mythical refresh of the brand) with its branding by partnering with popular intellectual property (IP) franchises.

In the last two years alone, there has been a rash of collaborative Tamagotchi releases featuring Gudetama, Pokemon, Pacman, Evangelion, Demon Slayer, Fate and Hello Kitty. And it’s likely that Bandai is hoping that reaching out to new audiences through these franchises will draw in a new generation of Tamagotchi fans.

“The concept of a virtual pet can easily be written into a mobile app, but to many of us a core factor to making a virtual pet feel like it’s a life form is to have it exist in its own dedicated housing. When it’s on your phone there is a detachment there, because you already associate your phone with games or applications. When it is in its own device though, there’s a tiny bit of magic there that can help fool your brain into enjoying it as a creature,” says Fields.

Still, he believes Bandai also made a great move with the phone app for the new Tamagotchi Meets/On series and hopes to see that idea expanded on in future releases. Online features and communities have certainly enhanced virtual pet collecting and raising experience for many.

“Through research, we’ve learned that 67 percent of users play their Tamagotchi on a device with a friend and that 96 percent of all Tamagotchi users love the device so much that they’d likely purchase a new version,” says Bandai’s Badie.

But ultimately, it would be their unique concept as ‘pets’ that give these virtual toys an edge.

“I’d say the fact Tamagotchi are designed as interactive creatures will encourage people to form some sort of attachment early on,” says Fields. “I think this attachment contributes to people staying in the hobby longer until they eventually get involved in the community and before you know it, they have a Tamagotchi Instagram.”

*The author is an avid collector and has a Tamagotchi Instagram @pixelpetplayer