UCS 10179 Millenium Falcon: A Performance Evaluation

For those of you who read my past review on the 10179 UCS Millenium Falcon, I will let you know upfront that this is mostly the same information I presented in the growth potential section. I decided to post it here because I believe it will get more exposure AND because in here you will be able to post your comments and feedback on my analysis. So, in summary, if you read my review you can go ahead and skip to go directly to the comments sections and let me know what you think, while if you didn't well, read on!

As you all know, the Ultimate Collector's Series Millenium Falcon is the single most successful investment over the course of LEGO's history, so I feel it is important to analyze some of the factors that helped its good performance, as well as the past and future trends for the set.

First of all, we can go ahead and compare the performance of the set to that of some other comparable SW UCS models:
 

What we have to evaluate in the table above is not so much the CAGR of the sets, since they have been retired for very different time periods, but rather the Holding Period Return (equivalent to % Change Over Retail). In this category, the UCS MF completely crushes any of the other two large sets by more than 100% in each case, a number that is very impressive when you consider the other two have had more time to grow AND had retail prices $100 less than the MF, so they would need to sell for not even close to what the MF is selling now to reach the same HPR. Also as said above, the average HPR for UCS sets is around 300%, so once again the MF is above average by a wide margin.

It is really not that much of a surprise to see that this set has outperformed most others, if not all the sets in the UCS. This is by far the most popular ship of the entire Star Wars universe, and that popularity translates to A LOT of people willing and able to make this set a part of their collection. You can be sure that any hard core Star Wars fan will need to get one of these to be able to say that the collection is complete, there is really no way around it. Another strength the set has going for it is how hard, expensive and time consuming it is to recreate 100%, as we examined on a previous section. Some parts are just extremely expensive, hard to find in the desired quantities, and the add-ons like the box, stickers and the instructions already cost more than most currently available UCS sets.

Now, I want to show you a graph that shows the % increases of each set above over the past two years to compare where the sets have been going in the relatively short term:

You can see in the graph above that the three sets have been experiencing similar trends when it comes to % changes. Logically, the farther back we go in history the larger the % change increase or decrease should be. If we go to where the MF was around 2011 we will see that of the three sets this was the one that grew the most in that period (2011-2013) with a % change of over 100% that, considering it was selling for around $1,000 by that time, is extremely impressive. It seems that over the past year the MF has increased more than the ISD (that has more years retired) but less than the DSII, that it's doing pretty well itself. Again, we have to remember that a 1% increase in the Millenium Falcon is almost double the amount of the same % increase in the other two sets.

With that out of the way, let's see where the Millenium Falcon has been going over the course of the past two years, as well as its sales trends over the past 12 months to figure out if it still is a worthy investment even at current market prices.

Very interesting graph. You see that the Millenium Falcon was selling at around $ 1,300 back in 2011 and in that short period of around 2 years the set has already doubled in value yet again. Those investors that had the foresight to invest in the set even when it seemed to be extremely expensive are now rewarded with a very nice ROI that at the same time is equivalent to a pretty substantial dollar amount. You can also see that the trend of this set continues to move up even in the short term, with it going up almost 6% relative to the past month alone. Of course, there are some fluctuations and periods of time in which the set has taken a dip in value as well, but overall the trend is upward and not the other way around.

Let's add this graph up with the one about sales numbers over the past 12 months:

In the graph above you will be able to see that even at this very expensive price the set continues to sell a very respectable amount of both new and used copies every single month. The lower we have seen over the past 12 months was in the past month of May, with "only" 6 new sets sold and around 7 used ones. For a set with such a high price tag I think that the eBay activity is another indicator of its huge popularity. What's more, as the holidays approach we will start seeing this number rise up again in the same way it did in 2012 (you can see the growth in sales in the graph starting in September and peaking in December). One thing I do want to mention is that as mentioned in one of my recent Blog Articles this type of sets is vulnerable to what I called the December Effect. Let's see the value changes over the past 12 months so you can see what I mean:

Take a look at the December values and you will clearly see that the set dropped to its lowest point in the last 12 month period. In fact, the set lost over 12% of its value between the month of November 2012 and December 2012. This seems to be a constant trend with this very large and expensive sets, as I explained in my article, probably as a result of the collector and AFOL spending most of the money in holiday purchases and gifts as well as a larger supply of sets in the market that occurs in part for the belief that December usually is the best time to sell. If you are interested in more detail you can go ahead and read the blog, but for now I just wanted you to see that for a seller of a UCS MF, December may very well be the worst time while for the buyer it may very well be the best.

Taking all the above information and putting it together leads me to believe that this set's future growth prospects continue to be outstanding. With the release of the new Star Wars movies and possibly other movies dedicated exclusively to the Millenium Falcon storyline the ship is probably going to be in the big screen yet again in the following years, increasing its popularity and therefore market demand even more. Another thing I wanted to mention is that even if LEGO goes ahead and decides to do a re-make of the MF as they did with the currently released X-Wing, I see very unlikely that they will produce a model that is even close in piece count, size, detail and price as the 10179. Even if the model is a $400 set with around 4,000 pieces (something that in and on itself I see unlikely if we take a look a TLG past releases over the last few years), the new model will still be short by more than 1,000 pieces and will more than likely be smaller in size and detail as well.

Furthermore, this set will continue to be the Top Choice for the hard core collector and AFOL, that I think is for sure the audience purchasing it now at over $2,000. Most of those people willing to pay that much for a LEGO set will continue to exist in the future and demand for this set will continue as a result. What's more, every single month we know that AT LEAST six news sets are sold and I would say that at least half of them gets opened and built, in turn reducing the future supply of sealed 10179s.

I really see this set continuing is fast growth for many years to come, and someone willing to take a risk with the expectation of a very big reward should consider putting some money into this set now before it gets even more expensive. What's the limit with this thing, you say? Of course, no one knows for sure, but history has proven that those who though $ 1,500 for a LEGO set was the highest it would go were very very wrong. $ 4,000, why not?