Hello everybody, and welcome back to Insider Trading! As you may have noticed, this week’s article is a free article, and not a premium one. That is because I am about to deal with a community-based piece regarding the recent rise in prices for a lot of high-level tournament cards, mostly centered around the Legacy format. This series will be in three parts; part one (today’s article) explains how we’ve gotten to the point where Force of Will costs $50 and Tarmogoyf is on the brink of $100. The next two articles will expand on this topic, in a constructive manner.
Magic is undergoing an unprecedented amount of growth. You can verify this through virtually any metric you can think of! Just to name a few off the top of my head, all of the following are significantly up: total amount of product sold, amount of tournaments run on Magic Online, tournament attendance at the FNM through Grand Prix level, level of forum traffic to Magic websites.
Hasbro released their Q4 earnings report, and Zendikar has been confirmed as the best-selling Magic set of all time. Zendikar Prerelease and Release tournament attendances were up 25% from Shards of Alara Prerelease and Release tournament attendance. FNM participation is up, and you can see that U.S. Grand Prix attendance, on average, is approximately double where it was three years ago (to the point where multiple 2010 Grand Prix in the U.S. are expected to break 1500 players, and Barcelona will likely break 2000 players).
Why has Magic suddenly become so popular? I couldn’t state anything with 100% certainty, but I can throw out some pretty educated guesses:
1) Duels of the Planeswalkers: One of the top X-Box download games of the past year, Duels of the Planeswalkers exposed hundreds of thousands of X-Box gamers to Magic: The Gathering through an affordably-priced ($10) game. A lot of people followed their interest in the X-Box version of the game into the paper version of the game; others who had previously played Magic years (or even a decade) previous rekindled their interest.
2) M10/Top Down Set Design: The first set that really blew expectations away on this “new wave” of Magic interest was M10. A big part of M10’s success was the introduction of new (and relevant) cards into the core set (rather than making it one big set of reprints), hand-in-hand with two very important design philosophies:
a. A return to large-scale top-down design: Wherein card names/themes are designed before the actual mechanics on the card itself, so that the card’s name/mechanics evoke one another.
b. Front-loading the set with good cards (reprints and non-reprints): It seems that Wizards is realizing that the Core set can have a preponderance of good Rares (and Mythics), in that while Royal Assassin or Coat of Arms might not have a huge value to a tournament value, there are lots of casual players who would love to get their hands on these cards. There didn’t need to be a lot of “bulk rares,” especially when the set size is down to 53 Rares/15 Mythics (not a lot of space to waste!)
3) Power Creep for creatures and single-target removal: For a long, long time (and I mean a decade-long), Wizards has been trying to shift Standard play towards creature-based win conditions. Partly this began because of the multitude of combo decks that showed up during Urza’s Saga era (Academy Decks, High Tide, Memory Jar) that drove people away from tournaments (and Magic) in droves. There has been a definite power creep in creatures over the past few years, since Ravnica, but ramping up with Lorwyn — once upon a time a vanilla 4/4 for GG2 would have been a tournament contender, and now it wouldn’t even see Standard play.
At the same time, Wizards has given people improved tools to kill creatures in one-for-one spell exchanges: Lightning Bolt, Terror, Terminate, Doom Blade, Path to Exile, Deathmark, and many others have been appearing over the past three-or-so years, and are on par with any single-targeted creature removal ever printed in Magic’s history.
One valuable lesson Wizards has taken to heart is that most players hate having their spells countered, and are not big fans of control-on-control or combo-gone-wild metagames (which isn’t to say that there aren’t players who DO like this — but they are in the minority). This was touched upon in a recent article on the Wizards website, but it bears repeating: Psychologically, most players respond better (as in, have more fun playing Magic) if they have a creature die to Lightning Bolt, rather than having it be countered by a counterspell — even though the end result is the same — because in the Lightning Bolt scenario, they at least got to play their creature to the board.
Meanwhile, the power level of many spells has been taken down a notch. Most notably among these are card-drawing spells, counterspells, and land destruction. These haven’t disappeared entirely, but they are probably at their lowest level of power (as far as new variations being printed) in Magic’s history. Card-drawing spells are being less-aggressively costed. Counterspell itself now costs a base three mana (Cancel, the ability to outright counter a spell) and mode-specific countermagic is in the realm of one and two mana (Flashfreeze, Spell Pierce, Negate, Dispel). Land Destruction more-or-less now starts at four mana.
In short, the gameplay elements and mechanics that the majority of players enjoy are being pushed (creatures, single-target removal spells, nifty-combo effects that aren’t completely broken), while the mechanics that have cause the most frustration to players are being lessened (Countermagic, Land Destruction, Mass-removal, broken combo elements).
4) Better ancillary products (Duel Decks in particular): Wizards has released a goodly number of “new” products over the past two years — just to name a few, we now have Duel Decks, From the Vault decks, Premium decks (Slivers), revamped Fat Packs and Intro packs (formerly theme decks), Planechase, Premium packs (Shards block foil packs), among others.
I want to single out Duel Decks in particular, because these have been great mass-market and hobby-level products. At an MSRP of $19.99 (I believe), every Duel Deck has been a great value for the consumer — to date, you have gotten more in singles than the cost of the two decks. Moreover, these are great tools for pick-up-and-go gaming — two decks that are designed to play against one another with massive replay value. As a gift to a friend, or just a “hey, I want to buy a product that lets me just start playing against a friend,” Duel Decks are the best Magic product currently on the market (even more so than Booster Packs). The revamped Intro decks (once they are up to 60 cards again, starting with Rise of the Eldrazi) will similarly do well, as they have a close price-point to the Duel Decks.
While not every product has been a hit, Wizards is aiming products at multiple markets that were previously neglected: People who want prebuilt decks to play against friends, without the hassle of having to track down cards one-by-one (Duel Decks), multi-player products (Planechase, a shift towards templating in regular sets to encourage multiplayer, and the upcoming Adversary product), and collectors (From the Vault)and Foil collectors (From the Vault and Premium Shards packs).
From the community response, the overall launch of these products has been received with a great positive attitude. Yes, some of these products were flops (foil Shards packs), but the positives of stuff like Duel Decks and Planechase have far outweighed the negatives of the couple of attempts that have fallen short.
The important thing is to note that none of these extra products are ones that are necessary to compete in Constructed Magic. These are all optional products, and so unlike when Wizards released an obscene number of cards between Time Spiral and Eventide (for Standard play), there are now fewer cards you need to buy for tournament play (three set releases a year, all of which are smaller than the ones just a couple of years ago, plus some singles out of a Core Set), but more overall Magic products being printed (see above). In the end, everyone wins — Wizards sells more Magic products, previously underserved customers get products geared towards their market, and nobody (except the extreme completionists) feel like they “have” to buy everything in order to keep up.
5) The Rise of Legacy: For a long time, Vintage was the de facto format for people who wanted to play with all of the cards they had accumulated over the years. Several factors conspired against the long-term growth of Vintage, including card cost, card availability, and perception (real or otherwise, perception is reality) that Vintage is not a very interactive format.
Wizards of the Coast developed an off-shoot format (called 1.5, which was basically a stepchild of Vintage) into Legacy. Previously, 1.5 was Vintage except all of the restricted cards were outright banned. With the transition to Legacy, the format was given its own banned list (independent of Vintage), and over time interest in Legacy has grown.
Grand Prix: Legacy attendances have outperformed expectations, at every step over the past three years. StarCityGames.com has encouraged the growth of Legacy in the form of tournament support — last year, we ran a handful of $5,000 Legacy tournaments. This year, we are giving Legacy an equal footing with Standard on a $200,000 tournament circuit.
Why are we throwing so much support behind Legacy? We believe it’s a great format — if you take a look at the last two years worth of decks (Top 8 at both our events, Grands Prix, and major Legacy events overseas, primarily in Europe), you’ll see an extremely diverse metagame where new decks are still being developed with every new tournament, old decks frequently receive new facelifts, no one deck or strategy dominates the metagame, and play skill is heavily rewarded. Most of all, Legacy is fun! From a financial standpoint (including card sales and card buying), we would be making more money by running back-to-back Standard series at our StarCityGames.com Open Events. But we want Legacy to flourish as a format, because we believe that Legacy, if nurtured, will be a healthy, thriving format that people have a lot of fun with, and don’t have to have the worries of rotation that accompanies Extended (over time, more and more cards become “unplayable” as Extended only covers the last seven years of cards).
And here’s a little secret that I’ve been allowed to share: We aren’t the only ones who believe in Legacy. The players believe in it to! Of the four Constructed formats (Standard, Extended, Legacy, Vintage), Legacy is now the #2 sanctioned format in Magic, ahead of Extended! Standard is the king by a high multiple, but Legacy has overtaken both Vintage and Extended in popularity, according to DCI data.
Well, that’s a lot of preamble, isn’t it? But I think it’s important to note many of the major factors that have gone into Magic’s rapid growth over the past year. There are some other factors (Prerelease / Release tournaments being moved primarily to the store level, stabilization of Magic Online, better promotion for Grand Prix and Pro Tour level events, tighter control on spoilers to better build excitement around new set releases, the growth of independent high-dollar tournaments), but the big ones (in my opinion) each got their own section, above.
Now it’s important to note that there has been a major global economic downturn over the time period in which Magic is experiencing unprecedented growth. At a time when overall discretionary spending is way down, spending on Magic is on the rise. Here’s a few of the reasons I have for this:
1) Magic is cheap: A lot of times, people get fixated on the Jaces, Tarmogoyfs, and Black Lotuses of the world as the indicator of Magic’s costs. I’ve said it before, and I’ll say it again — casual players (people who rarely play in tournaments, except for maybe prereleases) are largest customer base for Magic, by volume. If you take a look at the thousands of Magic cards out there, you’ll see that the vast majority are low cost ($0.10 – $0.25 each), many products — official and unofficial – allow the acquisition of a lot of cards at once for a low cost (Our 1,000 card collections, Duel Decks, Intro Packs, $0.20 bulk rares, the upcoming Deckbuilder’s Toolkit). If you’re just looking to play Magic, just to play, you can do so for under $10 very easily. Entire formats (pauper) are based on this premise.
2) Magic has great replay value: To this day, employees at StarCityGames grab up Duel Decks and battle each other during their lunch breaks. Some of these decks are over a year old, but they are still as playable as they were when they were first released. If you wish, you can play the same deck thousands of times over the course of years (use sleeves please!) without ever incurring an additional cost above and beyond the initial cost of that deck. Even in competitive Constructed, where there is a barrier of entry higher than kitchen table play, you can generally play the same deck for an entire season without making major changes that cost you money past initially putting the deck together (and one of the high points of Legacy has been that since the cards never rotate, the initial investment you make holds value over time).
3) Magic is a great group activity: Group gameplay has grown significantly over the past couple of years, especially thanks to the EDH (Elder Dragon Highlander) format. There really isn’t a version of Magic that is solo play, when it comes to playing with the physical cards. Whether you’re getting together to playtest with friends, play a group chaos game, have a booster draft/cube draft, or attend a Grand Prix, Magic offers an opportunity for social interaction that many other hobbies don’t, on this large a scale.
4) Magic is fun: As a game, Magic is fun! Lest this sound like some sort of mindless propaganda, it is important to note that during a time of economic downturn, people want to be able to find something that brings them a measure of happiness and distraction to have good times while some bad is happening. If Magic wasn’t fun to play, people would be looking for other activities.
When we were going into a global recession towards the beginning of last year (January, 2009), Pete Hoefling (he who owns StarCityGames.com) gave me a simple instruction: I should keep an eye on the buys that were being submitted to the company, and let him know if I noticed a significant surge of people selling off their Magic collections due to the state of the economy. I never had to do such a thing; over the last year, I have seen no overall noticeable increase in people selling out of Magic, despite the M10 Rules changes, the economy, the rising cost of cards, or other reasons therein (beyond what we’d normally see).
I do have one caveat there, and it is important: I have seen an increase in people who are pure collectors selling off their collections. These are the people who have one of every set ever printed, or one of every Booster Box/Theme Deck/Fat Pack ever made, and whose primary motivation for being in Magic is to own one (or four, if they are going for playsets) of everything they choose to collect.
This is very important to note, and I’ll come back to this next week. The paradigm of Magic has been shifting more and more towards players and less and less towards collectors over time. Magic is a Collectible Card Game (CCG). Over time, there has been a shift towards the majority of people valuing Magic as a Collectible Card GAME and not a COLLECTIBLE Card Game. There are still people who buy Magic primarily to collect it, but they are a distinct minority compared to people who buy Magic primarily to play it. The number of people in the first category
Why are the number of collectors shrinking?
1) I’ll point back to an article I once wrote about Vintage and proxies: A lot of people form a bond with their cards when they play Magic. There is something visceral about the act of playing with a real Magic card, and proxies take away that connection. Collecting is basically the same: you aren’t actually using your cards, and they just sit on a shelf, or in a display, and your use for them is done. Completed your Arabian Nights set finally? What’s do you do with it now that it’s complete, other than just have it sit there? I’m not trying to degrade people who collect — but I want to explain why, when there’s an economic downturn, it would make sense that the people who aren’t having an active use for their cards (collectors) would be selling off on higher numbers (the cards are sitting on shelves, and aren’t being played with), while players are not selling off their cards in higher numbers (they are using their cards).
2) It is harder, over time, to break into Magic as a collector. Ten years ago (2000!), there were what, fortyish fewer sets that you needed to put together, if you were just starting out collecting sets? With each year that passes, it becomes more and more daunting to “start from scratch” as a collector — and so the people who are starting out as collectors are fewer than the people who are getting out of primarily purchasing Magic for collection reasons.
If I can tie together the point of everything above: Magic is more popular than ever, there has been growth in the player base (casual and competitive), Legacy and EDH in particular is growing in popularity, and the people who are pushing the growth of Magic are players (as opposed to collectors).
The price of many Legacy staples have doubled over the past two years, and there has been an especially sharp increase over the past six months. EDH and Legacy share many of the same characteristics (you can play with the majority of the older cards), so I’ll lump them together here:
1) If there are (AT LEAST) twice as many (at least) players playing formats that require older cards as two years previous, and…
2) There are no extra cards entering circulation to meet the demand for these cards, then…
3) Isn’t it just simple logic that supply is not equal to demand, and therefore card prices are rising?
This is a very simple economic model of Supply < Demand = Higher prices. There are no additional Dual Lands in circulation than there were two years ago; no additional [card name="Force of Will"]Force of Will[/card], no additional [card name="Tarmogoyf"]Tarmogoyf[/card], no additional [card name="Wasteland"]Wasteland[/card]. If [card name="Wasteland"]Wasteland[/card] is a four-of for Legacy, and twice as many people want [card name="Wasteland"]Wasteland[/card] than wanted it two years ago (and again, I think the number is higher than twice the demand; I am just using 2x for the sake of argument), doesn't it make sense that the price wouldn't be the same $12.50-$15 that [card name="Wasteland"]Wasteland[/card] was selling for in 2008? This goes as well for [card name="Tarmogoyf"]Tarmogoyf[/card], which has the twin pull of both Extended and Legacy (and was pushing $50-$60 before it rotated from Standard the first time around).
The same is not the case for Standard. Contrary some beliefs, the presence of $60 cards in Standard has not made Standard overall more expensive to play. It does mean that some individual cards are hitting price levels that previously did not exist in Standard — but plenty of cards were hitting the $20-$30 level over the years in Standard (Cryptic Command, Figure of Destiny, Mutavault, Thoughtseize, Urza’s Rage, Arcbound Ravager, Umezawa’s Jitte, Tolarian Academy, Mox Diamond, Cursed Scroll, Chrome Mox, Vindicate, Ravnica Dual Lands), and there are much, much fewer cards hitting that high of a price point in Standard than previously existed.
When Wizards switched to the Mythic Rare/Rare rarities, I said that likely one of the benefits would be that since Magic packs would be opened in greater numbers to get the Mythics, the overall price of Magic rares would be driven down from previous points. This is exactly what happened! The most extreme case was M10, where the majority of just-reprinted rares from 10th Edition (Coat of Arms, Underworld Dreams, Birds of Paradise, Hypnotic Specter, Traumatize, Twincast, PIthing Needle, Elvish Piper, to name a few) have halved, thirded, and quartered in value from any previous printing, as people were opening M10 to get the new cards (Baneslayer Angel, Vampire Nocturnus, the M10 Dual Lands), and were flooding the market with the regular rares. Outside of M10, there are fewer rares (non-Mythic) breaking the $10 mark than any time I can remember in the history of Standard.
If the two most popular decks right now for Standard competitive play are Jund and Vampires, I’m not too concerned about Jace and Baneslayer hitting $60 — Jund has few cards over the $10 mark, and Vampires has a cheap alternative to M10 Vampire Nocturnus thanks to the prelease foil for that set.
Where I am concerned with is the increasing cost of acquiring cards to play Legacy. There have been many arguments about whether Legacy costs more or less than Standard in the long term (paying a higher price for cards up-front, versus having to worry about rotation and card value depreciation due to rotation), and I don’t want to rehash that argument here. What I do want to say is that as things are going, Legacy is becoming more and more expensive to play, and if prices keep trending the way that they are, cost as a barrier to entry will become a very serious problem. This is one of the major hurdles that has hurt Vintage’s growth as a format.
I am very invested in making sure that Legacy is affordable to play — for the health of the format, I would rather have it cost less to get into Legacy, and have more people playing it, than to be charging $90 for Tarmogoyf, $300 for The Tabernacle of Pendrell Vale, and $8-$10 for key staples that are in Tempest-through-Coldsnap sets. As much as people say that we, as a company, have influence over the market — I think that oft times this influence is vastly overstated. I can’t just snap my fingers and start charging $10 for Wasteland and $30 for Tarmogoyf — we would be bought out by our competitors in three seconds flat, who would then charge the price for those cards that the market is willing to bear. At current rate of acquisitions, there aren’t enough copies of these cards that are being reintroduced (through collections and singles being sold) to meet demand. I can debate about whether or not it’s financially worth it to crack unopened boxes of Future Sight that still exist just to get Tarmogoyfs, but there really isn’t a significant supply of unopened Future Sight boxes out there to make a dent; and once the ones that do exist start getting bought up, everyone will raise their price on Future Sight Boxes to meet the price of Tarmogoyf.
So, how can the price of Legacy cards be brought under control, for the long-term health of the format?
Next Week: The Cost of Cards — Finding a Solution (Part 2 of 3)