(((Disclaimer: Apparently Martin Shkreli was trolling hard BUT this doesn’t mean something like could happen to this TCG/CCG or other.)))


This writing is intended as a case study in what is happening in the popular collectible card game, Magic: The Gathering.


In Magic: the Gathering –from now on MtG- you are a wizard casting spells to attack another wizard, but in a world filled with magic, is there anything more powerful than magic? Yes, acquisition power, as Tony Montana once said, “First you got to get the money, then you get the power…”

In MtG you have to acquire trading cards either by trade or buying to make your deck of cards more powerful than your opponent’s. Trading is referred as when you trade a card for a card, or various cards, which amount to the same monetary value. Buying refers to trading cards for currency for its current value at the moment. When you are buying MtG cards you are buying an unregulated asset which value is affected by the use given by the players at the moment. Technically, when you buy an MtG card you are buying a stock for which you don’t receive any dividend.

There are two markets in which you can buy MtG cards. The primary market which would be if you have a store for selling the cards and you acquire the cards at cost value to sell at an MSRP to the MtG consumer. The secondary market which would be when the store or any other vendor sell the cards sell the cards to the MtG consumer. As you can see the typical MtG player, consumer, don’t have any access to the primary market unless they run a store.

The MtG secondary card market fluctuates as a stock market would. Some card spike in price and blow out of proportion to just collapse after a while, some of them rise steadily maintaining a long term value, and some keep fluctuating while time passes. People inside the MtG community have studied these patterns over the years and how speculation can drive process up and down. The community uses the hashtag #mtgfinance on twitter to find and share relevant news on the market.

(From this point forward I will use the website TCG Player for showing card prices since its the standard car market. If its not on TCG player then I will use ebay)

Recently the community was stirred up by a buyout –when someone buys an entire supply card- of the cards Moat and Lion’s Eye Diamond, which ended up doubling the price of each. The person responsible of the buyout was Craig Berry which his 9 to 5 job is, you guessed it, buying out and selling MtG cards, as reported by the site MTG Price. In in an interview realized by said site he stated that price spikes are going to happen what he just do its accelerating the process of which these happen. As reported by MtG Price people ended calling Berry the Martin Shkreli of Magic, after the Big Pharma CEO who threatened to spike prices of a much needed medicine.

The buyout story went viral beyond the MtG and the actual Martin Shkreli took notice of what was happening. The day after the story was published the same Shkreli took to reddit and published an entry called, Advice for a new and wealthy player. Then he took on twitter and started to shake up the MtG Finance community with various tweets.

Now, the ongoing discussion on the thread varied from whether he is serious to more other aspects of the game that are key variables in forcing prices up or down. What are the driving forces which can take a piece of cardboard, as the Black Lotus card, to have a secondary market price of more than $20k? Yes, that’s 20,000 dollars, sometimes more.

  • The Reserved List: This list states that the cards in it will never be reprinted in any physical format for player use. The list was incorporated by Wizards of The Coast –makers of MtG- in 1996 to build trust between the company and collectors, so cards would preserve or rise in value. At the time it was a tactical and strategical plan.
  • Printing: A normal MtG set, released every 3 to 4 months and it gets printed thousands of times creating a substantial offer but there are occasions in which Wizards of The Coast decides to make a special edition set as in the 3 Master sets (Modern 1, Modern 2, and Eternal) which are printed in limited quantities and its only printed once as compared to a normal set. These sets are officially said that are for players to experience what is to play with some staples but at the same times these kind of printing regulate the price of some cards making them either cheaper or more expensive. An example of this can be the card, Force of Will, the original printing of this card can go up to $151 but then this card got reprinted as promo, in foil, for judges of MtG, that card can go up to $514 after June 17 in which its price dropped from $800 but this card was reprinted in Eternal Masters a limited edition set which creates more normal non-foil cards which are up to $129 and the foil of this set since the print is more limited than the judge promo can go up to $699 and these value are still slowly fluctuating.
  • Rarity: Rarity is a scale used to determine how much a card will be printed but it also denotes the power of a card inside a limited format. The current rarities in the game are common, uncommon, rare, and mythic rare. These rarities are distributed ideally in “Booster Packs” as following 11 commons, 3 uncommon, and 1 rare or mythic rare. In the best case scenario, concerning rarity not foils, a box of magic would contain 366 common cards, 108 uncommons, 31 or 32 rares, 4 to 5 mythic rares since the odds of getting one according to mtgsalvstion.com is 1 every 8 packs. To put things in perspective let’s take into consideration the current set, Shadows Over Innistrad. This set contains a total of 297 unique cards covering the whole spectrum of the rarities mentioned before the rarities in this set are distributed as following 105 commons, 100 uncommons, 59 rares, 18 mythic rares.
  • Formats: Formats are the different ways to play the game. When playing the game one of the first things you do, if you don’t know anyone that play is go to whatever store sells MtG and buy one of the pre constructed deck which are produced with the intention of teaching the player how to play, these are called Intro Packs and they are usually made for a format called Standard. Standard is what we call a rotating format, this means that the only cards usable in this format are the cards of the current 3 blocks, which as of 2016 is made out of 2 sets. Previously, this format was made of 3 blocks of 3 sets and a Core Set – a set made for starting players –. To make things clear this format rotates every 3 blocks made of 2 sets. But what does this means. This means that a player made deck will rotate faster than previously since blocks are shorter and there is not a core set any more. This causes a price spike in card singles very rapidly in the secondary market and as fast as they went up they come down in price, this causes a lot of heavy speculation on card will be used in the meta-game which drives price to spike very rapidly. For example let’s take the card Tamiyo, Field Researcher for the set Eldritch Moon, which releases officially in July 22, when this card was announced it spiked in $38 and now it’s sitting on $40 at the highest. Modern is what we call an eternal format, the cards used in this format are cards released from the 8th Edition Core Set of MtG forward except for the cards in the Modern Ban List. The cards are used constantly for certain type of deck in this format are what is called a staple. For example if you wanted to build a Jund deck you would need a Tarmogoyf a creature card which has had 3 printings since its original release in the set Future Sight, this card it normal non foil version can go up to $250 and its foil version its sitting roughly in $1099, the second printing of this card was in Modern Masters which its normal printing goes up to $215 and its foil version goes up to $412, then the final printing was in Modern Masters 2015 and its price is currently sitting at $209 for the non-foil and up to $423 the foil. Another format is called Legacy in this format every card in the history of magic is legal except for those in the Legacy Ban List. This is the format that is directly affected by the previously mentioned Reserved List. The most powerful cards and possibly the most important known as the Power 9 are in this list, cards so powerful that their use is restricted. One of these cards the Black Lotus which highest price in the Secondary Market since it cannot be printed again go up to $29,999 on ebay

Making a deck is making a strategy to overcome any challenging deck, so it doesn’t matter how powerful the card is if it doesn’t add to the strategy it becomes redundant or dead weight, and here where the path cross between cost and value meets. If a player want to play certain meta-game the cards he acquires, unless he was lucky enough to get them from Booster Packs, will vary from a few dollars to possibly tenths to hundreds of dollars, for example the price of the previous deck called Jund.

Why pay hundreds or possibly thousands of dollars for a pack of card board? Fun? Competition? Or as the landscape we see now, having a non-taxable investment un-regulated fluids asset? For me, I pay what I pay to play for fun, I play for what the Head Designer of MtG, Mark Rosewater, thinks, which I do believe, and the game aims for. But is that the reality? What does the average MtG person plays for?We the community have never seen the statistics because ad for any other company this research is private.

For one side we have the casual community, players that play as me, just for fun. The casual player looks for way to create entertainment in their way of playing. Contrasting we have the player that plays competitive, a player that needs the most powerful deck to overcome their opponents. For one side we have development teams creating fun entertaining cards that can be used in competitive play, and in the other side we have a whole circuit of which pit players to duel for a monetary prize. On one side you want players to have fun but in the other side you want them to battle to see who the best is.

WoTC wants the player to be competitive but they don’t regulate the secondary card market, a.k.a. the market where you find the cards to make a stronger deck to overcome your opponents. Now, I can see a common argument arising, Why the player don’t buy the boxes where the packs come from. As stablished before only regulated agents (stores) can buy directly from WoTC, the players would need to buy the prices at MSRP from the store which is approximately $100 or less if the store decides to. But let’s say a player needs a Gideon, Ally of Zendikar a card with a mythic rare rarity so you have a 1 to 8 chance of getting it, the cards sits at a max of $39.99. Should the player pay $400 for these 4 cards OR would you buy the 4 copies at $160? Statically and financially speaking the second option trumps the first.

They want the players to collect but they established a non-reprint policy or The Reserved List to regain the trust of the collectors of that time and not only that they have revised it 2 times -2002 and 2010- more after the establishment in 1996 to add more cards. Taking into consideration the previous revisions of the least they have been made after periods of 6 to 8 years. Now, only 2 points in the time line on the list don’t make a trend and the last revision was 6 years ago so what can we expect in the next 2 years from a corporate decision regarding this list? But what part of the game does this game affects? It’s called the legacy format, the legacy format it’s the most expensive format of MtG in general. The staple cards are not getting printed, the supply isn’t meeting the demand and this is making the prices to spike more with each passing day.

Why should the average player care? WoTC have already set the precedent for The Reserved List and by all means this doesn’t mean that the cards that haven’t made it to said list will never get to them. On the contrary cards that are making themselves more noticeable and which value is creeping up are viable targets for this list. This means that possible staples of the various formats run the risk of falling into it. Now, if WoTC will keep on adding cards to the list this would mean they need to reprint some cards so there’s enough supplies of them so they prices don’t spike up in a unreasonable manner. I just want to add that there have been 3 major sets dedicated to reprints since 2014. This is just my opinion, this is just speculation that there MIGHT be a revision of the list soon, but in my opinion that would hurt the game more that it would benefit it.

The decision of abolishing this list is not something the corporation would take lightly since it would set a future precedent in the relationship between consumers and the company. The company, WoTC, should analyze what he’s ultimate goal is and who he should be catering, if to the collector which is probably no more than 10% of the player base, the actual players of the game, or the vultures that control the secondary market.

From where I originally come from other games such as Pokémon TCG or Yu-Gi-Oh are slowly taking over magic because the inexpensive entry cost to competitive as compared to MtG. In my opinion, this doesn’t mean that MtG is dying but that players, especially those who like competitive play, are looking games that are easier to afford, to this day MtG remains the biggest, longest running, but most expensive card game. A game that I enjoy very much but the financial flaws to it need to be said, maybe one day we’ll see a reform but until that gets here, I’ll be playing at some stores with some people.

 

 

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