Jabba's Palace and the April Spike

Back in the summer of last year (2012) LEGO released its new and vastly improved version of one of the most iconic locations of the whole Star Wars universe: Jabba's Palace. The new version included several improved mini and maxi figs, and it was a very good recreation of the "actual" structure. What's more, LEGO apparently had planned to produce the compatible Rancor Pit for a while now, making this set even more unique.

Nothing else was really out of the ordinary about this set. Sale numbers since it really were pretty good and consistent, topping 100 copies sold on most months. Regarding its market value, the set experimented the typical spike in price that comes along newly released set as soon as they hit the market, but right after that it went into the typical downward trend as a result of retail discounting and increased availability. For several months after its release, the market value for the set ranged from $83 to $109.

LEGO investors had mostly positive comments about this set, but it was not one of the most talked about ones considering that its retirement was not expected until at least the end of 2013. What took place in the month of April, however, took everyone by surprise and produced some really crazy figures.

As early as the last week of January, news started being reported negative comments made by some religious groups making the claim that the set released by LEGO had some racist connotations. According to some of these groups, the structure resembled one of the most important structures of the Muslim community and, what's more, suggested that the Jabba character presented some stereotypes that reflected negatively on the Muslim community. We all know that Jabba is not the perfect role model and represents one of the worst criminals in the Star Wars universe, and that is what made some of these groups feel some antipathy for the set.

Fast forward a couple months, specifically to the end of March and the beginning of April. Some news outlets started spreading the news that the backlash suffered by LEGO regarding this set had prompted the company to make the decision to retire it earlier than expected. The religious groups claimed victory, and from there everything started to change.

The news of this supposed early retirement went viral and, as a result, the set in question started being purchased in larger quantities every second that passed. Prices on eBay soared, stores were completely sold out and even here on Brickpicker threads and posts related to 9516 were spreading extremely fast. From experienced investors to casual fans, passing through a more than likely high amount of average Joes hoping to make a quick buck, started hoarding the set a quickly flipping them on eBay for mark-ups of even $80 over its retail price. At one point, the set had completely disappeared from almost every single major retail store in the country, thus making eBay one of the few choices for those wanting to get a "piece of history" or at least to avoid missing out on a set they had planned to acquire later.

Before I continue, I have to say that I actually went ahead and purchased 4 copies of Jabba's Palace on April 2nd, and immediately listed three of them on eBay for around $ 160 (Got them at Target for $87). The three sets sold in less than an hour, and I was able to keep the 4th copy all to myself with the profits, and even had some money left in the end.

That personal note aside, let's now evaluate the numbers of sold sets and the price fluctuations over the past 12 months from Brickpicker's Price Guide:

You can see in the graph above just how significantly the quantity of sold sets spiked during this April event. In the month previous to the craze and the month right after, the set sold closet to 10 times less copies than during April. With over 900 new sets sold, Jabba's Palace easily became the Top Selling set of the month and set a record of monthly sold sets that will probably not be matched in the near future, if ever. Note that a few months ago, during the period when Minecraft was really hard to find it sold over 1,000 in two consecutive months.

Also, a very important fact to note is that the vast majority of these over 900 sets were sold in a period of less than a week, making it even more impressive.

This increase in sold sets had to come with an obvious price increase as well, and that is in fact what ended up happening. Take a look at the graph below where the Market Value of the set is presented:

So, in the month of April the set went up from $83 to $ 124. The spike is very obvious in the graph and one thing you have to remember when taking a look at it is that as the craze died down, the last 3 weeks of the month started seeing a decrease in the price of the set as most large retailers started re-stocking this set at retail price while short term flippers panicked and started dropping prices accordingly. If the trend of the first week had maintained for the rest of the month and the large retailers had not replenished their stock, the set would have probably gone up to at least $150.

Eventually, as always, the fact that LEGO had never said that the set would face an early retirement caught up to the market, and as demand for the set decreased, the price for the set did just the same. You can also see in the graph that the set took a hit as a result, and is once again selling at around $96 on average. Again, if it had not been for the fact that the data for the last three weeks of May get tallied as part of that month, we would probably see an even lower market value for this current 53 day period

So, now that things are relatively back to normal and the set is selling its regular amount of sets per month at close to its average price, what can we expect to see in the future? Well, there are a couple of things that are worth mentioning.

First, we need to keep our mind on the prize and remember that this set was going to be an investment winner whether the April even happened or not. This set is superb and includes some great figures in it that should carry it towards the investment Olympus. Furthermore, historical figures support the fact that Jabba themed sets do pretty well in the secondary market, and as such we can expect no less than the same from this vastly improved set. If anything, this event can give the set a boost in the secondary market product of having some sort of interesting "history" attached to it.

Another thing that we got out from the event is something that LEGO usually does not publish at all: an expected EOL date. In efforts to calm down the hysteria and later to further explain what was going on, LEGO announced that this set is expected to retire by the end of this year, as scheduled. This is one extremely rare case in which investors are handed out this kind of information and can therefore act on that as they see fit. You don't see this very often, if at all.

Lastly, these events just go out to prove how a series of misrepresented statements and the internet can affect the supply and demand for everything, even our loved LEGO. There are a lot of individuals in the market that make decisions based on whatever they see reported on the internet or entirely by hype. This kind of misinformed decisions can result in everything from wasted time to large financial loses, but it also means profit opportunities for those willing to take advantage of the situation and those that really understand the market.

What makes this event even more interesting is that we saw almost the complete opposite happen with the UCS B-Wing exactly a month later. In that case, a deep discount depressed the value of the set substantially and we'll have to keep an eye into how that affects it in the long term. For more info, read this outstanding Blog article by Quacs on the subject.

Jabba's Palace April spike was certainly an interesting phenomenon, and how it affects the set's performance in the future is something we will probably be analyzing once it goes EOL later this year into early 2014.

Thanks for reading.