Tuesday, August 27, 2013

Bots: costs and initial strategies

So far in this series of Magic Online bots, you have learned the economic fundamentals of the digital card game. We have also reviewed how to create a bot store that automatically manages your collection so it gets benefits for you. If you decide to start this quest and build your own store, it is important to know some marketing strategies that can determine a great success and a better relation between cost and benefits.

Initial costs and maintenance for Magic Online bots

You should not create a Magic Online stores without wondering how much the initial and maintenance costs will be. Besides, you have to take in mind ​​the benefits you will get from each store depending on what cards it will have in stock. First off, you must know that for every digital store on Magic Online that you are creating, it will have the following rough expenses:

 Magic Online account $9.99
 Compatible computer with CPU Intel x86 ~$400-$1200
 Windows 7 Professional OEM license (allows a Windows XP license) ~$125
 Virtualisation software (optional) $40-$70
 Energy consumption for a PC of 100W with fee of 0.2$/kWh ~$15/month
 Investment on initial stock $100 or greater
 MTGO Library account and software FREE
 MTGO Library renting fee 2.5% or Lite/Pro license

Except the Magic Online account, all prices are estimations and may vary depending on where you live. With Magic Online version 3 you should use Windows XP as it consumes fewer resources than their successors. The problem is that official licenses for this windows can no longer be officially purchased. The only way is to buy Windows 7 Pro OEM and request a downgrade to Windows XP (this is supposed to be valid until 2014), although I have not checked this because I use my old operating system licenses.

Additionally, you can see that there are some initial fixed costs and others for maintenance. To decide how much you should spend on the computer I will write a sepparate article, because I think it is a very important topic to ensure the smoothness and scalability of your future chain of Magic Online bots.

On the other hand, you can check that I have highlighted the possibility of buying virtualization software. These applications allow you to run more than one operating system on the same computer, and they are the basis to have several Magic Online bots on the same machine. Although there are some companies that offer free versions, sometimes you may prefer to use the payment option in order to gain extra performance. Like the selection of PC, I will make a comparative analysis for a future article that will allow you to choose the program that best suits your needs.

Previous suggestions to plan the setup of your Magic Online bots

As you have seen, the initial cost of a Magic Online bot is relatively affordable. For this reason it is very important that you plan the growth of your business based on the resources you have. Below I give you some tips that may save you some time and money.

  1. If you have an older computer, certainly this is the cheapest option in the short term to start testing bots Magic Online. Of course, this PC will probably have high energy consumption problems, it will be outdated and with limited hardware expansion capabilities. These factors reduce the capacity expansion of a bots chain in the long term, but it would be useful for you to take some practice with bots at almost zero initial cost.
  2. You might also have the Windows XP license of any old computer you no longer use because probably your current PC will be updated at least to Windows 7. However, if you are planning to setup several stores this initial cost increases linearly. Therefore, you should only create the stores you really need or you will be losing money.
  3. For virtualization software, there are some free programs but with the disadvantage of being slower than the payment option. For this reason you should choose it depending on the number of stores that you are going to install on your bots machine. 
  4. You will need an initial investment for each store. The greater the value, the higher the growth rate of stock but you will also spend more money. If you make a large investment on each of your stores they may evolve rapidly, but if that investment is low in the short to medium term, then you will spend more money on the maintenance of your Magic Online bots than the benefit obtained, because initially the flow of customer will be low.

The relevance of having a strategy for the future expansion

From the tips mentioned above, I will give my recommendation assuming you want to create a chain of Magic Online bots for the long-term. Everything will mainly depend on how many tickets/cards you are willing to invest for the initial stock of each of your stores. In this way, you have two options:

  • Low initial stock (~$100 per store): In this case you should have 1-2 stores. The main one should have a Pro license (buy/sell any card with unique prices) with 2.5% renting fee and buy/sell cards just from the latest expansion available in Magic Online. This limitation is very favourable because that set will be the most drafteable one, so there will be huge quantity of cards at a very good buy/sell rate. If you choose to have a secondary store, it should buy cards in bulk through a Lite license (all rarities at same prices) also with a renting fee of 2.5%. This second store must buy the cards cheaper than the main one, and it should be configured to refill the main stock because clients are more interested on pro stores that are always full of stock. As new sets are becoming available, your store should accept them to slowly go expanding your business. 
  • High initial stock (~$500 or more per store): For these quantities the store should not have many problems to grow quickly (obviously with a good marketing). With amounts between $500-$1000 I would start buying/selling standard, and from there I would include Modern and even Legacy. The Professional version is required for these types of stores, but it would also be a good idea to have one or two Lite stores to maximize profits. Use the monthly license fee or better when you move amounts greater than 90 tickets/day (these licenses cost 63 tickets/month or less), and 2.5% commission per transaction otherwise. One strategy that can combine any of the above options is to use, for each store you are planning to create, two stores instead: one that exclusively buys cards and another that only makes sales. As this alternative would double the computation costs of your computer and limits you to create new stores, this strategy is only recommended whenever you have a high traffic of customers. Thus, you avoid your Magic Online bots from being always busy (remember you can only trade cards with one customer at once, so if a customer is waiting for trade he would probably go to another store).

Final thoughts

Although the growth stock of the strategy (a) is slow in time, it is also safer and with a relatively low initial cost. Therefore, this solution is favorable for those who cannot afford high investment and for those who will not spend much time maintaining their Magic Online bots.

Unlike (a), in case (b) the growth is much faster but you have to be careful and keep the prices updated. If you have cash, your stores will be targeted by customers who hope to also make some profit with the most expensive cards. The problem is that those cards leave your store/s without tickets and until sold you do get zero benefit (in fact it is a temporary loss state). The main problem is that those cards can vary greatly over the cheap price and generate losses due to these fluctuations. Thus, with this strategy you must be much more aware of your store to avoid short term buys/sells that may provoke loses.

Now that you have a long-term idea of ​​how you are going to expand your chain of Magic Online bots for profit, in future articles I will comment more technical aspects related to mount your stores, such as the required hardware and software.

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