MTG Financial Fundamentals: A Look Back
Today is August 31st, 2011, and the Dow Jones was up 53.58. Apple Stock showed relative weakness today, reflecting investors’ hesitation upon the announcement of Steve Jobs’ retirement. Gold closed at $1831.70 an ounce and silver at $41.77 an ounce. I discussed none of this information on Twitter today, and the websites I visited and articles I read had little to do with Wall Street.
Instead, I continued my study of a different financial market: that of Magic: The Gathering. For a sustained period of time now, twitter is abuzz with tweets, websites are populated with articles, and forums are congested with posts all relating to the thrill of Magic card speculation. A few interesting statistics: Jonathan Medina, one of the most well known MTG financial gurus, currently has 3,296 Twitter followers. Over at The Source, a MTG Legacy forum, there’s an entire thread within the “Community” page dedicated to financial complainers and speculators alike; there are currently 131 pages of posts in this forum, eclipsed only by the Pimp Legacy Deck thread and the Awesome Altered Card Art thread. It is the recent influx of speculators into the collectible card game that has created the fluctuations in prices that have made the pastime so intriguing. [Disclaimer: As my first article on MTG Finance, I decided to provide some historical perspective from my point of view. If you’re here to simply read about which cards I think are key to pick up in anticipation of price jumps, feel free to jump to the bottom.]
This article looks to answer a short, yet perplexing question: How did this all begin? When I first started playing Magic in 1997, the internet was still a fledgling, unavailable to many including myself. The values of Magic cards were procured in one of three ways:
1. Inquest or Scrye Magazine
2. Calling the local hobby shop
3. Making it up
Everyone who has played magic since the mid 90’s has a story relating to number 3 on the above list. For me, it was Craw Wurm, Scaled Wurm, and Sengir Vampire. We traded the Wurms at 1$ and the Vampire far higher. Dual lands? Never heard of them! Who wants to open a pack and have the rare be a land?! You can’t win games with those! The nostalgia of those days are fun to reminisce about, despite now realizing the foolishness that took place regarding card values. So what’s changed?
There’s not one single catalyst. The internet has played a significant role. Once information is available to the entire MTG community, everyone can read about the best decks and build accordingly. This may account for some price increases, but it still does not explain the whole story, for people were “net-decking” long before massive amounts of people “speculated” on cards. For that, we need to fast forward in time. The creation of Star City Games and their namesake series of tournaments has been a tremendous driver. Let’s dig deeper into my theory.
Star City Games has created themselves an empire. What started as a gaming shop has evolved into one of the most influential establishments in the MTG community. The seed started with the idea of a circuit of tournaments, with live coverage available to everyone via the internet, turning Magic into a spectator activity. From these tournaments emerged frequent winners; those winners in turn earn themselves respect from the community. They begin to write strategy articles, talking about how some cards are stronger than others, metagames, etc.
Now we’re getting somewhere. Star City Games now has nonstop access to the latest deck tech from some of the best players. They can therefore anticipate what cards will see additional play, and price cards accordingly. Certain cards go up in value, and Star City Games can profit from this. Especially as they drive the popularity of the game up further, causing prices to rise even more. Hence, dual lands, for example, go from $10-$30 up to $60-$120. Pure profit.
But when thousands of dollars can be made, it’s nearly impossible to avoid grabbing the attention of many players. They begin to see the opportunities; one needs to only be a half a step ahead of everyone else, and there is money to be made. Enter the speculator. They begin to anticipate what cards may go up in value and acquire a great number of these cards, much like Star City Games does. With information so readily available on the internet, the practice of anticipating price bumps is easier than predicting the stock market. As speculators boast their successes, more people are intrigued by the concept of making money doing something they truly enjoy, and the population of speculators increases. These speculators often buy far more than one playset of a given card, all in anticipation of making value.
This leads us to the present. Someone mentions a deck can use Amulet of Vigor to its benefit, and people buy 100+ Amulets of Vigor on the internet overnight. The card goes from a crap rare to a $2.00 card just like that. And this phenomenon is happening over and over and over again. It may ultimately be a problem. Wizards of the Coast must know this is happening, and they must realize that people are using these cards in a way they did not intend back in 1993. But as long as people are willing to buy cards at these hyped prices, speculators will continue to feast on the impatient and the anxious. Something similar happened that I vividly remember from my youth…they were called Beanie Babies. You know what happens once people realized the Beanie Babies were useless? The bubble burst. It almost seems inevitable that this will occur in the world of MTG, so speculate wisely.
My future articles will likely be more in tune with MTG financial trends, financial reviews of new product, etc. For those who are more interested in financial recommendations and couldn’t care less about my historical perspective, here are some recent pick-ups I’ve been making.
• Foil Zendikar Fetch Lands: Have you noticed SCG recently increased their price of Scalding Tarn and Misty Rainforest? They also increased their prices on the foiled versions. But guess what, eBay hasn’t adjusted to these higher prices very quickly. Wait patiently, and you can find foil fetches selling at SCG buy prices.
• Birthing Pod: It’s just about too late on this one. All over the place I’m reading about this card for both Standard and Modern. If people at your local shop are still trading these at 3-4$, pick them up. SCG has a price tag of 8$ on these and I don’t see that dropping.
• Lotus Bloom: This card hasn’t been tweeted about as much, but it has quietly gone from a 3-4$ card to selling for 10$ on SCG. It’s hard to predict what combo deck will be strongest in Modern, but many of them run this card to set up for a turn 4 win. I’d keep an eye on this one.
My short sale of the week: Liliana of the Veil. It’s pre-selling at SCG for $34.99, and that may seem like a decent price for a 3-mana planeswalker with interactive potential. But look at the statistics. There has been 1 planeswalker ever to go on pre-sale and continue to rise in price for an extended period of time: Jace 2.0. Unless you think Liliana will be a mainstay in Standard, Modern, Legacy, and Vintage like Jace 2.0 was, I’d hold off until after the price settles if I were you.