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    Re-Make Impact Evaluation (2nd Edition): Jabba's Palace #9516


    Welcome to the 2nd Edition of the Re-Make Impact Evaluation section. For those of you who read the 1st Edition, the purpose of this article is already clear, but if you are new to my blogs, I recommend you to at least read the intro section of the first Impact Evaluation dedicated to the Sopwith Camel.

    As you all probably know, 9516 Jabba's Palace set was the focus of investor and collector's attention a couple of months ago when news about its possible early retirement were spread through the news networks. In those crazy days, the set saw a huge spike in price as a result of panic buying and short term flippers that has since faded out. Now that everything is back to normal, I think it is important to remember that this version of Jabba's Palace is actually the second one released by LEGO, since back in 2003 the 4480 Jabba's Palace was introduced.

    The older version of the Palace is obviously inferior to this current one, with a lot less detailing and lower quality minifigs. Back then, LEGO was still in the early years of what I think as of a huge jump in set design and quality, so the inferiority of the model is actually not that surprising. The older version included only around 200 pieces, but despite its small size and not great detailing the set actually performed great in the secondary market, with its highest point in the last 12 months reaching $ 170.

    Let's now take a look at how the set has behaved since the newer version was released around mid-year 2012:

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    So, you can see on the graph that the trend for the old 4480 set has been negative for most of the time. We also have to consider that 9516 was made available in July, but that its official announcement was made some time before that. From the data, we see that over the past year alone 4480 has lost around 28% of its value, and currently sells for around $131. You may ask, how can we be so sure that the newer version is the cause of the sudden drop in value?, well there is no way to be completely sure without a very in depth analysis, but I can at least tell you that between the beginning of May 2011 through April 2012 the set lost only around 6 % of its value, while in the past year or so (May 2012 through April 2013) the set has lost that 28% we mentioned earlier. There is clearly some relation between the announcement and release of the new version and the sharp decrease in value of the old one.

    Of all of the sets I have been evaluating for this section, this one of the sets that has experienced such a large drop in value following the new release. It will be interesting to see if it continues to drop further in the following months, but it is very clear that most investors would be better served by selling some of their stock just in case the 4480 continues this downward trend.

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    FCB - I see something a little different in your graph.  I see values of the two sets tracking roughly in step with each other until a major system shock: the Jabba's Palace early retirement scare.  At that point, Jabba2 spiked and Jabba1 plummeted.  I think the bigger takeaway for me is that these sets rose and fell together until that erroneous EOL, at which point that values of the two converged.

     

    It's a really interesting graph, and I appreciate the analysis!

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    I see what you mean. There are just several factors at play here, but considering where the old set was two years ago I have to believe that the re-make seriously impacted its growth. Then, we had that early retirement scare that messed up things even more.

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    Another clear example of the re-make effect here.  Both lines do track each other fairly closely and that would be driven by retail discount determining the 9516 price, to which the demand for the 4480 is tethered. As the price drops for the 9516 on the shelves it pulls the price of the 4480 lower. It's not a simple straight 1 to 1 relationship but the correlation implies causality.  Most notable indeed at the end point where the hysteria caused that spike.

     

    I recently sold my used 4480. The newer one is such a clear case of the newer model being an improvement.

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    We're about to watch the Sail Barge reissue effect in "real-time". Has anyone been keeping track of the two UCS X-Wings?

     Maybe Grolim has, but I think we need to get at least a few more months of data before trying to see the impact the new one had on 7191, if any. I will be definitely follow their performance over the coming months.

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