Hi Everyone!I'm taking a break this article (but I'll be back next time) from the trends found in MTGO. Today I'm going to talk about a topic that relates to trends but really is the root of trends, and overall the root of any financial investment. I'm talking about predictability.
The ability to predict what's going to happen with a card price is how we all increase our value in MTGO. We predict that a card will go up, buy it, and hopefully realize some additional value. MTGO investments are exciting to me because everything really relies on Wizards, their policies, and the cards they plan to release or rerelease in upcoming sets.
I decided to talk about predictability today because I was thinking about how Wizards announced last month that the Vintage Masters on demand events were going to end then reneged. When they made that announcement, I thought, what’s wrong with them. They either made the announcement on purpose to deceive, or made a poor decision and changed their mind.
What’s relevant about that announcement is that it created a certain
mentality that Vintage Masters cards will go up in value, then extinguished
that mentality. I know I say it a lot, but I’m a business guy, and I know
business and how business should operate. I personally think Wizards is run by
a bunch of math experts who understand logic, numbers, and game design, but don’t
understand business (they understand well, just not as well as business people
do). I mention this because it makes the MTGO economy behave much differently
than a stock market (stock markets are run by business people). There’s a degree
of risk that comes from the lack of predictability.One other major factor in MTGO investing that has to do with predictability is that Wizards seems to have a problem with expensive cards on the secondary market (at least in Modern it’s no secret). They can release cards at any point that will increase supply of any card online. That’s great for the players who don’t have the cards, but unfortunately, people who do can end up losing a significant investment. Look at Urborg, Tomb of Yawgmoth as an example. It being in Magic 2015 drove the price down to nearly nothing compared to how much it was early this year.
I just wanted to take this article to point out that there are a lot of
external factors causing changes to the ability to predict the price trends (It creates a ray of distortion).
The point of the whole article today was to talk about how it’s hard to predict
what’s going to happen based just on Wizards, not even mentioning what cards
will be sought after by other players. All this seems to me like Wizards is
trying to hurt the people investing in MTGO cards and kill the secondary market
in MTGO (even though they have said they stay out of it publically). 
"All this seems to me like Wizards is trying to hurt the people investing in MTGO"
ReplyDeleteMTGO is NOT an investment, nor should be treated as such, much less "behave as a stock market". If you can make money out of the secondary market, great; telling others that you can and that they should expect to buy cards and make money out of them is very bad advice.
Wizards has good business people, as running the VMA drafts again is:
- Good for *their* business, as they sell packs.
- Good for players of Legacy and Vintage, as the format becomes more accessible.
- Wizards *actually* staying out of the secondary market, as they don't really care if there isn't one, it is not their business! Their business is having players and cards available for events to fire (more money for them) and selling packs. That this goes against the goals of people who want to "invest" money into a non-investment is only an issue to said people.
That people get angry at Wizards by reprinting cards usually means people have probably paid a ludicrous price said card (e.g.: Urborg, a one of in some decks). Listening to this type of attitude has in the past caused huge problems for both players and Wizards, in the form of the Legacy Reserved List.
If you can make money out of MTG/MTGO, good for you. I think most people that are successful at it both put in the time and money, understand the secondary market's dynamics and probably don't think about "investing" but more of what is known in financial markets as "trading" - where you actually don't sit on the item for years on end, hoping things will go your way (forever).
You make some excellent points but I disagree about Wizards' business practices. I think the act of "trying to hurt MTGO investors" is playing a role in the second market. If you dispute that they are trying to hurt investors, then no problem, we disagree on that, but I think they are trying to hurt investors and that is certainly not staying out of the secondary market.
ReplyDeleteI think the secondary market is an integral part of the "collectible card game experience" that is imperative to have a sustainable collectible card game.
I see where the confusion is wiht the term "investor" vs "trader". I apologize if I don't use the same terms as everyone else. I summarize terms like these as "trader" and "long term investor" all fall into the same umbrella of "investor". Hence, all traders are investors but not all investors are traders. Sorry for any confusion. I'll try to be more specific with terms like that in the future.
Thanks for reading and I appreciate your well thought out comment.
Hi Kevin,
ReplyDeleteI disagree on that point, for sure. If Wizards was bent on taming speculation (*not* investors, speculators), they would probably say so by suggesting we would see reprints or more flashback drafts if cards got out of hand. Given that Modern decks are still priced way too high ($500+), it is reasonable to expect that they will keep printing cards. Some people just spend way too much on a card game (e.g. Liliana of the Veil is poised to burn many people), then are shocked when reprints happen.
What Wizards might have done better was be rigid of timelines on set releases and not backtrack, since that allows 3rd parties to best manage the stock of those sets. But again, as they stated, they don't care about the secondary market and there doesn't seem to have been any major issues with backtracking on VMA's availability. I don't recall if they did say it was a very limited release or if everyone was expecting that based on past reprint sets.
You're welcome, happy to chime in.