We host the first of a series of articles from our friends blog http://www.mtgeconomist.com , a top blog dealing with mtg and mtgo economics.
You can read the original article here:
http://www.mtgeconomist.com/en/economia-de-magic-online-parte-3/
In this article I will talk you about the fundamentals of the Magic Online economy. With this information you will have an idea of how to perform your purchases/sales of cards and the reasons that justify the price of a card. This comparison will not only be related to digital cards, but also between the value of an online and a physical card.
The main currency on Magic Online economy
Certainly there is no official currency on Magic Online. Since the beginning of the game the material was bought from the Magic Online official store, which can be accessed within the game itself. The only options available for sale are: boosters, pre-constructed decks and Event Tickets. These tickets allow you to enter at Magic Online tournaments where you can win prizes, and each of these items costs $1 plus taxes.
Due to the price of the tickets and their intrinsic value, soon people started to use them as the main currency. Their market price depends on factors such as the amount available on Magic Online, the number of drafts/limited queues to be launched, and recently also the high value of the mythic cards. Today their market price is slightly higher than $1 each, and it is unlikely to rise much more because if their value is very close to the official price ($1 + VAT) people would directly buy them from the store.
The evolution of prices
A particular feature of the Magic Online economy is that the price of each card evolves very fast. The reason is that the trades of cards can be done immediately without shipment delays, something that cannot be avoided on the physical market.
For this reason, the digital market behaves much more likely the real stock markets, and price changes are motivated by reasons like fear or speculation. However, in the Magic Online economy itself predictions can be made without being a financial guru. The important thing is that you must have a lot of experience in the game and know the cards, so you can correctly analyze the new sets and their possible interactions with the old cards in different game formats. In this way, you can overtake the market and buy a card that will be probably played (and, therefore, will rise in price) cheaper.
Giving a value to a Magic Online card
You might think that digital cards should have almost no value at all. After all, it is something that you can not own physically. In fact, your collection is not even stored on your own computer, but on a remote server managed by Wizards. However, if you look at the price of the cards at Magic Online, you can see that their value is not so different from the printed version. Normally, the digital market value is lower but sometimes happens exactly the opposite.Why does this happen? Like I stated for the physical market, the value of the cards depends on many factors. Some of them are the same in both the virtual and real world, but others are specific to the Magic Online economy. Moreover, the effect of each factor is usually much larger in
the digital version because the changes happens instantly. Below I summarize some of them:
- Tournaments and prices: like the physical format, when a major tournament is announced for a certain format, the cards increase their price and then they stabilize again after that tournament finishes. Besides, when there are announces of drafts for a certain set the prices also get lower in anticipation of higher stock and less demand. And so on…
- Reprints: Due to high speculation and the fast changes at Magic Online economy, the announcement of a reprint for a card makes its price collapse, especially if the card has a high economic value.
- Banning/Restriction: When a card is forbidden for using on certain constructed formats, its price usually gets lower because noone is able to play with it.
- Rarity: Although this is not a general rule, the rarest cards usually are more expensive and their foil version also have a higher value than normal ones.
These factors are may apply to both, the physical and digital market of Magic. However, there is another factor that, togeteher with the tournaments one, may have the highest impact on Magic Online economy: the redemption option.
What is redemption and why is it so important?
This option was introduced since the beginning of Magic Online to give extra value to the digital cards. Although nowadays the impact of this option on the Magic Online economy is smaller, it yet has a considerable weight.
The main advantage of this option is that you can buy digital cards in Magic Online at lower prices than the same printed cards. Likewise, you only apply the shipping costs once for receiving the cards in your house. Thus, it may be a very profitable option for collectors or even if you just want some very expensive cards of a specific set.
The main problem of redemption is that the big sellers flood the market with a huge amount of collections, lowering the price of both redeemed sets and those collected by opening boosters. For this reason, Wizards has recently increased the price of each collection requested the $5 to $25 (shipping not included). Although it is still an affordable price to individuals who wish from 1-4 sets, this new value limits the benefits obtained by directly selling the redeemed collections.
In my opinion, the redemption is one of the best options offered on Magic Online, and is also an excellent regulator of the economy. I could write a whole article dedicated to this topic, but I think I have offered you the basic information to know the fundamentals of Magic Online economy and how redemption works. In the next chapter I will discuss the profiles of players you can find on Magic Online. This analysis will aid you to better understand the market movements of digital cards.
Great article. I knew the redemption cost spike was going to have an affect on a lot of folks, I just wasn't sure what that effect was going to be. After only just starting my bots a few months ago, I've just about enough cards to look at redeeming a few sets; still not sure if it's worth it as I won't keep the cards for myself, but was going to just sell them to put the money back into my bot(s).
ReplyDeleteCheers,
Jimmi
Hi Jimmi,
ReplyDeleteFirst of all my apologies for late reply.
I think there is still some margin benefit when selling a redeemed set with the current price ($25 per set plus shipping & customs if outside USA). However, it mainly depends on the difference among the physical and online price.
Some sets are quite expensive at Magic Online and others have a high difference with the physical set. Check that out and also take into account that physical sets may be more difficult to sell than online cards. Thus, in the meantime those sets are not tickets for your store but a passive income.
Hope it helps! :)